S6 Ep24: Paul Hexter, President, Waterfront Shipping

In this conversation, Paul Hexter lifts the veil on some of the practical challenges that Waterfront Shipping experienced since the first seven methanol dual-fuel vessels joined its fleet in 2016. He emphasises the central role of onboard teams and shipowners in solving technical teething issues around pilot fuel and lubricating oil, and in helping improve the technology from the first to the second and third generations of dual-fuel ships.  Today, 19 of the company’s 30 deep-sea tankers are able to use methanol as fuel. Paul reports that the company has run its vessels on conventional methanol and some bio-methanol for over 245,000 hours to date, and that the fleet is currently operated on methanol ‘quite often’ in the current fuel price environment.   He also outlines his vision for the transition to green methanol, revealing that Waterfront Shipping is already using some bio-methanol as fuel to ensure compliance with FuelEU Maritime regulations.  While Waterfront Shipping does not currently have more vessels on order, the company aims to stick to methanol dual-fuel technology for future newbuild orders.  Asked about trends in the alternative-fuelled orderbook, which show that LNG has overtaken methanol in newbuild orders since the second half of 2024, Paul argues that ‘there is definitely room for multiple alternative fuels in the market,’ and highlights that methanol ‘makes a lot of sense’ as a fuel option, given that it doesn’t need cryogenic treatment and pressurisation and few modifications are needed to existing bunkering infrastructure and processes. He also comments on the IMO member states’ decision to postpone the Net-Zero Framework by a year. While many owners may defer newbuild or retrofit decisions amid the uncertainty, he points out that the industry as a whole remains supportive of a transition towards more sustainable fuels, and believes the delay might give companies a chance to further evaluate their options. 

The CEO of green analytics firm GENA Solutions examines the impact of the one-year delay of the IMO Net-Zero Framework on renewable fuel production projects, and on future ammonia and methanol volumes available for shipping. Podcast highlights While it is still too early to measure the full effect of the IMO Net-Zero Framework postponement, Vitalii explains why he has no doubt that the pipeline of renewable fuel projects will be impacted, with likely cancellations and a slowdown in new projects being launched.   He anticipates that the uncertainty around the adoption of the first GHG pricing mechanism for shipping will make shipping companies more reluctant to sign binding long-term offtake agreements, without which many project promoters will struggle to secure financing and reach a final investment decision.  Vitalii notes that renewable methanol projects are likely to be particularly affected, as more than 80% of total global demand for the molecule was expected to come from the shipping sector before the MEPC extraordinary session. He expects a mixed picture, where projects that have already secured offtakers for their future production are likely to continue to progress, while others may require more time to attach financing or attempt to reorient their production to aviation or the chemical industry. Even though FuelEU Maritime will maintain some maritime demand and the Net-Zero Framework could still be adopted next year, he warns that some projects will ‘inevitably’ be cancelled as a result of the delay.  He remarks that the scenario is ‘quite opposite’ for renewable ammonia projects, as only about 10% of global consumption in 2030 was expected to come from the maritime sector. While GENA Solutions has revised its projections for the renewable methanol capacity available by 2030, down from 8-14 million tonnes to 6-13 million tonnes, its predictions for ammonia capacity have remained unchanged at 5-10 million tonnes.  Vitalii also compares prospects for renewable methanol and ammonia with other alternative fuels, such as bio-LNG and biofuels. He predicts that the delay to the Net-Zero Framework will shrink the market for all renewable fuels, but will disproportionately affect projects that require higher risks and investments, as well as long-term commitments from shipping companies.  Finally, he reflects on the countries and regions that will be most affected by a potential slowdown in offtake agreements and rise in project cancellations, and on whether governments should jump in to bridge the gap while the fate of the global IMO regulation remains uncertain. 

In this special episode, we analyse the implications of the IMO Net-Zero Framework postponement with representatives of the shipping industry, Pacific Island States and environmental NGOs who attended the extraordinary MEPC meeting. John Taukave, researcher at the Micronesian Center for Sustainable Transport, describes the outcome of the extraordinary MEPC session, where a majority of IMO member states voted to adjourn the meeting for a year, as ‘very heartbreaking’ and ‘a huge disappointment’ that will bring an additional year of climate impacts for Pacific Island communities. A technical support and advisor for the Vanuatu delegation during the meeting, he describes the pressure, including at the highest level of government, that many countries came under from the United States, which opposed what it described as a carbon tax and threatened possible retaliation against states that would support it.  John also looks ahead to the next steps, vowing that Pacific Island States will continue their outreach work and the development of proposals to build support for the adoption of a first global GHG pricing mechanism for international shipping.  Simon Bennett, Deputy Secretary General of the International Chamber of Shipping, also expresses his disappointment at the outcome of the MEPC session, which he says fails to provide shipowners with the certainty they need to make major investment decisions.  Asked to analyse why the IMO Net-Zero Framework went from having the support of a majority of countries in April to a majority voting to postpone it six months later, he emphasises the importance of avoiding ‘blame games’. Although ICS had supported the proposed regulation to ensure a level playing field for the global industry, Simon acknowledges that the agreement’s complexity had caused concern. He argues that ‘a way has to be found’ to account for the reservations expressed by many countries.  Simon also reflects on what the outcome of MEPC means for IMO’s role as shipping’s global regulator. He warns that, if member states opt for an ‘explicit’ acceptance procedure, as was suggested by the United States, it risks creating a precedent that would make future regulatory updates more difficult.   Blánaid Sheeran, Policy Officer for Climate Diplomacy at Opportunity Green, insists that the IMO Net-Zero Framework is not dead, but delayed. She highlights that there is now an opportunity for regional and national players, as well as corporations, to take leadership on maritime decarbonisation.  While acknowledging that current geopolitics may make it harder to reach global climate agreements in the short term, she points out that politics is ‘ever changing’, whilst ‘climate change is not politics; it is science, and it is facts.’  Asked about the development of implementation guidelines, which began immediately after MEPC, she reports that those discussions have so far been constructive, with member states showing a ‘collaborative spirit.’ She expresses her optimism that a consensus could be found in the next year, before delegates have to adjudicate again on the proposed GHG pricing mechanism for international shipping. 

As countries prepare for a decisive vote on the IMO Net-Zero Framework, the EU Commission expresses confidence that the first global pricing mechanism for greenhouse gas (GHG) emissions from international shipping will be adopted.  Podcast highlights In this conversation, the EU Commission’s Director of Waterborne Transport, Fotini Ioannidou, explains why she remains confident that the IMO Net-Zero Framework will be adopted by a ‘large majority’ of member states at an extraordinary session of the organisation’s Marine Environment Protection Committee (MEPC) in mid-October.  While acknowledging that pressure from the United States, which includes possible retaliation against countries that will support the proposed global GHG pricing mechanism, is ‘serious’ and will weigh on countries’ positions, she does not believe it will be sufficient to destroy what she describes as ‘the commitment of the global community to deliver this first-of-its-kind global decarbonisation agreement.’ Asked what ‘plan B’ would look like if a majority of countries reject the Framework, she insists that there is ‘no credible alternative’ to the deal and there won’t be an opportunity to negotiate another one. She warns that, should MEPC fail to adopt the global regulation, the consequence would be regulatory fragmentation that would raise administrative burdens and costs for shipping.   Fotini also responds to calls, from the industry, for the EU to align its Emissions Trading System (ETS) and FuelEU Maritime regulations. She assures that the review process for both legislations will start ‘without delay’ as soon as the global framework is adopted to avoid a double regulatory burden for shipping companies.  Looking ahead, she also remarks that the next phase of negotiations on the development of guidelines is ‘likely to prove as difficult’ as were the talks that led to the agreement on the Net-Zero Framework itself. She singles out guidelines on rewards for zero or near-zero (ZNZ) fuels as ‘a priority among priorities’, which she says will be critical to provide clarity for investment in new fuels and energy sources. 

Cruise company Carnival Corporation unpacks the learning from its experience spearheading shore power in this new episode of the First Movers series. Podcast highlights Marcel explains how a combination of geography, available renewable electricity supplies and community support led Carnival Corporation to develop shore power in Juneau, Alaska, back in 2001.  Nearly 25 years later, he acknowledges that the use of shore power across the fleet of 90 ships remains relatively small, given that only 33 of the 800 ports where the vessels call (about 4%) currently offer shore power.  Nevertheless, he argues that the investment in making vessels capable of using shore power, which runs into the millions per ship, was worth it.  While he recognises that shore power does not make sense for all ports due to insufficient grid capacity or a lack of maritime traffic, he argues that the investment would make commercial sense for many more ports. He points to the importance of leadership from port authorities in driving initiatives like shore power, and shares his view on why deployment has been sluggish in the past two decades.  Marcel also responds to the wider debate about sustainability in the cruise sector. He points out that by improving energy efficiency, the company has lowered its greenhouse gas (GHG) intensity per passenger by 41% compared to 2008 levels and peaked its total emissions in 2011 despite growing its business by 37%.  However, he emphasises that the transition to alternative fuels depends on many factors outside cruise lines’ control, such as the availability of new fuels at an economically viable price. Describing hydrogen and ammonia as currently unrealistic for the sector, he explains why the company has opted for the LNG pathway, with 10 LNG-capable ships in its fleet and 8 more expected to be delivered by 2033.  Finally, he reflects on how Carnival Corporation’s experience with shore power development revealed the importance of a long-term vision and collaboration to achieve progress on decarbonisation.

In this episode, we examine the potential of ammonia to take off as a marine fuel, by considering trends on both the production and demand sides.  Although numbers of ammonia-fuelled vessels are lower at present than LNG or methanol, Sofia sees clear signs in the global orderbooks that ammonia is gaining momentum as a marine fuel.  She believes that the market is likely to first emerge among ammonia carriers, and in regions where infrastructure is already being developed for receiving ammonia as an energy vector, including Japan and parts of Europe.  With future low-carbon ammonia production expected to reach nearly 50 million tonnes by 2030, she highlights that the bulk of that production isn’t earmarked for the maritime sector. Instead, she notes that the lion’s share of investments is for projects using ammonia for energy production and to decarbonise land-based industries.  Sofia urges shipping companies to get involved where potential ammonia production, infrastructure and import ecosystems are already emerging, by joining clusters to co-invest and share risk with other industries. While she is confident that technology developments will meet the challenge of ensuring safe, leak-proof ammonia fuel and bunkering systems, she argues that the bunkering industry needs to step up to ensure operational readiness for ammonia bunkering.  She also insists on the importance of developing robust protocols for verifying and certifying the lifecycle carbon footprint of different ammonia production sources. Finally, she explains why the adoption of the IMO Net-Zero Framework, which is scheduled to take place in October, will be essential for the development of a market for ammonia as a marine fuel. 

The Executive Director of the Norwegian Shipowners’ Association, Helene Tofte, unpacks some of the main reasons why the country seems to have a head start on the energy transition – from the impact of ownership structures on individual companies’ willingness to invest for the long term, to the presence of industry clusters to foster collaboration on new technologies.  Data from the Norwegian Shipowners’ Association shows that 90% of its members have invested in emissions reduction technologies, including battery and hybrid systems, wind propulsion, and shore power.  Moreover, about 15% of vessels owned by the Association’s members today are powered by alternative fuels, compared to 2% of the global fleet. The orderbook reveals a similar trend, with 72% of newbuilds on order from Norwegian owners set to run on alternative fuels, compared to the global average of 27%.  Helene explains how Norwegian shipowners make business cases work for those investments in new fuels or technologies, and whether those decisions are already paying off in commercial terms.  She also lifts the veil on the challenges faced by the country’s shipowners. While the level of state support for decarbonisation makes Norway the envy of other owners elsewhere in the world, she argues that there is a need to ensure that enough funding is allocated for energy efficiency measures, and not solely for cutting-edge net-zero projects.  Finally, she reflects on the importance of the IMO adopting its Net-Zero Framework in October, but also of the EU harmonising its regulation, to create a level playing field globally.  About the Norwegian Shipowners’ Association The Norwegian Shipowners’ Association (Norges Rederiforbund) is a trade and employment organisation representing Norwegian-controlled companies in the shipping and offshore industry. The Association has 128 members, which control a 450-strong offshore fleet, including wind- and subsea vessels, as well as 240 ships on short-sea routes and over 700 vessels in the deep-sea segment. In addition, 50 mobile offshore units are part of its member fleet. 

In this episode, GCMD’s CEO Prof. Lynn Loo unpacks the learnings from two landmark pilots: ship-to-ship ammonia transfers in the Pilbara and a demonstration of an end-to-end value chain for onboard captured CO₂ in China. She describes how safety risks, including toxicity, were managed during the first ship-to-ship transfer of liquid ammonia between two gas carriers, which was carried out in Western Australia. She also shares technical and operational insights from the pilot, which aims to provide guidelines for other ports to conduct trials and ultimately strengthen their confidence to develop ammonia bunkering capabilities. Asked for her views on how and when this might unfold, she explains why she sees large bulk carriers on the iron ore corridor between Western Australia and Northern Asia as probable frontrunners – and why containerships are unlikely to be first movers on ammonia as a marine fuel even though they have been first movers on other fuels and decarbonisation measures.  Lynn then discusses the results from another pilot that saw 25 metric tonnes of liquefied CO2 that had been captured on a ship being offloaded, transported, and used as feedstock in the production of low-carbon calcium carbonate. Demonstrating this possible end use for captured CO2 was a major first step, she highlights, adding that the next trials will focus on lifecycle assessments and solving some technical challenges.  She also emphasises the importance of building trust in existing decarbonisation options, such as biofuels and energy efficiency technologies, to accelerate their uptake by the shipping industry. She outlines how GCMD is currently working on projects to improve biofuel traceability and validate the fuel savings delivered by energy efficiency technologies.  Finally, she reflects on how the financial, operational, technical, and safety risks of the energy transition can be managed through a cross-sector collaborative approach. 

In this episode, BV’s maritime head details why he believes that shipping needs ‘radical ideas’ to achieve its decarbonisation targets.  Speaking after the publication of his second book, titled Toward a sustainable blue economy, in which he calls for ‘a revolution in how we finance, fuel and operate the global fleet’, Matthieu de Tugny outlines what this looks like in practice.  He offers some avenues to reinvent the current economics behind investment and funding decisions in shipping, which are generally geared towards proven technology – often conventional fossil fuels – and tend to incentivise shipowners to ‘sit back and wait’. Describing green financing as a ‘structural enabler’ of decarbonisation, he shares his views on the impact of initiatives such as the Poseidon Principles and the Sea Cargo Charter, and explains what more can be done by regulators to give a competitive advantage to first movers and bring more certainty on broader infrastructure and supply chain investments.  Matthieu de Tugny also shares his advice for owners of smaller fleets or vessels operated on tramp trades. Whilst acknowledging that those companies are unlikely to become early adopters of new fuels such as ammonia or methanol, he emphasised the importance of incremental progress delivered by efficiency improvements or transition fuels such as biofuels. He reflects on how classification societies are set to be transformed by shipping’s decarbonisation transition, helping mitigate risk around new fuels and technologies and taking on a more advisory role.  Finally, he shares his views on the potential applications of artificial intelligence (AI) to optimise the performance and maintenance of fleets, and explains why he believes that training could be the most important challenge for the industry going forward. 

In this episode, we meet the new CEO of the Methanol Institute to hear his gameplan for the development of methanol as a marine fuel. Alexander Döll explains why he is confident that renewable methanol production will be able to meet shipping’s demand. With 240 projects for blue, bio- or e-methanol currently under development, he expects ‘real volumes’ to be available by 2027 or 2028. He discusses the role of China as a first mover, representing 88% of renewable methanol production today, and outlines how he anticipates production and bunkering infrastructure to scale up in more shipping hubs in the short, medium and long term. He also reacts to the latest figures in the global orderbook for alternative-fuelled ships, which showed LNG overtaking methanol from mid-2024, arguing that methanol isn’t losing momentum as a marine fuel option. He reports ‘genuinely encouraging’ results from the practical experience of bunkering, crew training and using methanol as fuel on ships since the entry into service of Ane Maersk in early 2024. He also addresses reports from Maersk of maintenance problems with their methanol dual-fuel engines, which he says were ‘completely expected’ at this stage, and reveals that a solution has been found by the engine manufacturer. Reflecting on the energy transition more broadly, he emphasises that a multi-fuel approach will be needed, and explains why he believes that shipping should stop thinking of the transition as a race or a competition between fuels.