Welcome to Coffee Time, a podcast series on markets and economies from dBS group Research. I'm Tamar Beck, chief economist welcoming to our 88th episode. Pretty Auspicious number. Uh today's guest is dr lin liu, who will talk about efforts to bring a critical part of the global economy, which is international shipping.
Uh an academic by training Dr Lewis presently on leave from Princeton University where she is Theodora D and William H. Walton, third professor in engineering in 2017, she co founded and Luca Technologies, a startup, developing wireless smart window solutions to increasing energy efficiency of buildings and improve occupant comfort.
Since 2021. She has been here in Singapore shaping and leading the Global Center for Maritime decarbonization or GCM D. You will hear that acronym several times in this podcast. T C M D is a nonprofit set up to help accelerate international shipping transition to a low and zero carbon future. We've done quite a few podcasts on climate change, but this one is very sectoral, very specific and I'm really excited about it. Dr lin liu. Welcome to Covid Time.
Hi, thanks for having me.
It's a pleasure to have you tell us about GCM D.
Yeah, I prefer to go with the acronym G cmd because the full name is indeed a mouthful. Um so as you said, G cmd is a nonprofit, we're about 14 months old. We were set up at the recommendation of this international advisory panel for maritime decarbonization that was convened here in Singapore. Um that that had basically chief executives of shipping companies, battery companies, etcetera. To think about what we can do
here to really um move the sector forward. And so the I. P. Met over covid and recommended the setting up of um a coordinating body uh to look at action oriented things that we can do to accelerate decarbonization for international shipping. Um This recommendation was put forward um in april last year and that was accepted. Uh Six industry partners came forward and said they would start, so they are our
founding partners essentially and they provided $10 million apiece. And then Singapore's Maritime and Port Authority came in and match that with $60 million and that formed the first tranche of our fund for G C M G. So G CMd sits right at the private and public interface. Um and really our mission is to help the international shipping sector eliminate g emissions and we do this by doing three following things.
One is to shape standards for future fuels, uh the other is to finance first of a kind projects and then the third would be to pilot low carbon solutions uh in real world operating conditions. And the reason we can do this is because um you know, we are a group of engineers and scientists, we have domain and technical expertise, we can scope projects, we have the flexible funding that our founders have provided us with and subsequent partners have provided us with.
We are an N. G. O. So we're neutral convener so we can bring the stakeholders across the supply chain. Um and even beyond the ecosystem together to work on these pilots and then finally with mph as our partner we have access to regulators and so we can begin to think about putting sandboxes together so that we can actually do these meaningful pilots. So that's in a nutshell. Woogie cmd is oh
this is so exciting. Um the ability to have that kind of flexibility and be in a coordinating role. Um and that sounds like a role of a lifetime Lynn. Um but let me step back for a second and ask the most obvious question, which is why do we need to solve for maritime decarbonization and how large are the States?
Ah that's a really good question. I mean um so 14 months ago I knew nothing about shipping, right? And so to me shipping was um sort of you know out of out of sight out of mind and I'm sure that's the case for lots of people. We think about shipping when we think about O. R. Perhaps we think about shipping when we think about our Amazon boxes coming outdoors. Um but shipping is really integral
to the global supply chain. So tomorrow do you know that shipping is responsible for 90% of the global trade? So it touches 90% of the global trade, right? Um and it's responsible for 3% of global carbon emissions. Um and just to put things in perspective, 3% may not sound like a lot, but 3% makes it um a the sixth largest emitter, if you will from a country perspective, um shipping is regulated by a single entity called the International Maritime Organization or the IMF.
Um and so shipping submissions is actually counted um separate from individual countries carbon inventory. Right? So it has its own carbon emissions. That's why I can tell you it's 3% and that 3% is comparable to that of aviation. So why is this such big stakes? Well, because it's such an integral part of the global supply chain, essentially our scope one emissions is always gonna be somebody else's scope three emissions. So the cargo owners, the consumers,
they can't dick carbonized if we don't dick carbonized. So that's how linked we are in in in terms of the global supply chain. Right? So it's really important for us to think about decarbonization shipping so that the whole world can be carbon eyes.
Yeah. So speaking of International Maritime Organization, so I understand, you know, there are these certain targets that they have said. So tell us a bit about those targets and your overall thoughts, we're gonna go into specific label your broad based thoughts on how do we go about addressing these targets.
Yeah. So, um so I M. O. Has set targets for decarbonization. International shipping and the target is to reduce carbon intensity by 40% by 2030 relative to 2008 levels, and then to reduce total g emissions by 50% by 2050. Now, you'll notice that these targets aren't exactly pairs aligned because power
um targets call for net zero by 2015. Nonetheless, these are very ambitious target for shipping because in order for us to get to these kinds of targets, um basically we're looking at low carbon and zero carbon fuels that are currently not available today. Okay. Um so that's that's just the target side of things. So how how am I looking at this? Well, I think um you know, um shipping went from using wind as propulsion
to coal to generate steam to oil. And now we're looking at sort of the fourth incarnation of what we should be using as fuels, right? Um just the industrial revolution alone, if you look at sort of um what um really helped um economies develop, that uh industrial revolution took place, and that energy system that was built took more than a century. Um and now we're talking about a completely different energy infrastructure and we'd like to build this in 30 years.
Um That's a really, really tall task. It's a challenging task. Um It's saying this is not meant to cripple one, but it's just to put things into perspective, right, in terms of how long it took for us to kind of embrace oil and gas, and now we're saying, okay, forget about oil and gas. Let's think about renewables. And by the way, let's do this in 30 years. Um so in order to think about this energy transition, I think we need to chunk it up into pieces.
We need to think about near term solutions. We need to think about medium term solutions and then we need to think about long term solutions. It's easy to just kind of look at the long term solutions because there's no question where we'd like to end up, but it's
not obvious how to get there right. Like I said for shipping, the long term solution is really the zero carbon fuels, the green pneumonias, green methanol, etcetera that's needed um for us to to to be able to sail without admitting G. Um so, so I think what we need to do is to keep an eye on the ball on the long term solution and work hard on that. But in the meantime, do what we can with what we have now to start bending the curve. And so what it means is
we need to simultaneously work on near term solutions. So that include a but it includes technologies that can reduce fuel consumption, like, you know, wind sails, like whole cleaning robots, like air lubrication, but also look at um low carbon fuels that are
available today. So biofuels perhaps even liquefied natural gas now they aren't without their set of issues, but I think done right and used properly, they can reduce our carbon footprint in the meantime and then the in the medium term, I think we need to think about things like shipboard carbon capture um carbon capture provides the runway for green fuels to scale for green fuel costs to come down. And so we
need to think about mid term solutions as well. So basically to chunk up the energy transition and think about solution in three buckets um most importantly, I think um you know, we can't do this alone, right? Um um
just talking about fuels, right? I think if you think about shipping fuels is really outside the sector, so we need to think about um sectorial collaboration and partnership, but we also more importantly need to think about cross sector collaboration and partnerships as well in order to really uh get moving and move the needle and and I think finally we need the carrot and the stick.
So having a price on carbon certainly will help. Um and and also having regulations and having these targets so that we know where we're headed and that you know, these policies are enforced. So all those things need to come into play if we're going to get to those targets that we just talked about.
Right, okay, we are gonna unpack some of these because some of the stuff you said, we can't just, you know, just use the word you have to explain to us in greater detail. So um first technologies than solutions and then I want to talk about carbon capture. Alright, so starting with current and frontier technologies, you sort of touched
upon them and I'm really tantalized by them. So what is a little greater detail about some of the technologies that you think are promising now and then the frontier stuff that you know almost sounds like science fiction, but we'd like it to happen.
Well let's not call it science
fiction, It
happen, it's a matter of time, it will happen. So we don't want to call that science fiction. Right? So we can talk about the near term solutions first. I mean near term solutions are things that are currently available today that when install you can shave emissions by, I don't know anywhere from 1 to 10%. Okay, it doesn't get you all the way there, but you can start shaving emissions. So those are things like
wind sales that you can put on board. Um in fact just a couple days ago I saw, so my office is at, so I look I I overlooked the Panjang terminal ports. Um and I saw one of our partnership, so this is an ocean network express container ship that had this white thing at its bow, so at the front of the ship and I couldn't quite figure out
what it was. So I Ask your friends at, oh any and they basically said Oh it's a wind deflector and so I looked it up and it turns out that this wind deflector is essentially like a visor on trucks or even on motorcycles. And it basically reduces drag and by reducing drag as it sails, you can reduce fuel consumption and it reduces fuel consumption by about 2%. Right? So these are the kinds of things one can do in the interim.
This was a large container ship. Yeah,
yeah, yeah, yeah. So, so these are the kinds of things one can do right? Um there are operational measures one can also do. So for example, this idea of just in time. So basically you can sail more slowly and when you sail more slowly, you use less fuel so that you get to the ports just in time as opposed to going fast and then getting to the ports and then having to wait at the court for a berth space or whatnot. Right? So these are the
kinds of things one can do again. It shapes um fuel consumption and so it nets out carbon emissions by between 1 to 10% depending on what we're talking about in terms of fuel. Uh current fuels, low carbon fuels are available are things like biofuels. Now, biofuels are not at scale. So we understand that, but you know, if you can deploy some of it, you can reduce your carbon footprint. So the concept of drop in um is important.
So that's the idea of taking some biofuels and dropping it into marine fuel so that you can reduce your carbon footprint some now of course it's important to know where your biofuel comes from because its origination um would affect its carbon footprint reduction. Right? And then it's important to know how much you have in there so that you can properly calculate your g emissions abatement.
Um you can use liquefied natural gas um provided that there's no methane slip upstream, provided you're not leaking methane because methane is an even more potent greenhouse gas um you can reduce carbon emissions by about 20%. So these are things that we need to think about. I don't think we should a priority cross anything out at this moment because we need to do whatever we can with whatever we have now
to really bend the curve on carbon emissions. So these are the kinds of things we can do sort of now,
just a second on the biofuel one, is that concept or is it actually happening in the world?
It's actually happening. So I mean there are there have been lots of trials that have been done and you can commercially purchase biofuels, there's a green fuel premium associated with using biofuels and so then you need to justify this green fuel premium or you need your customers to be able to pay for the green fuel premium. So in fact what we've done um earlier in the years, we've spoken to our stakeholders, this is typical of how we scope our pilots.
So we spoke to about 200 stakeholders across the supply chain and we asked them, why aren't you using biofuels? Biofuels are available today? Why aren't you using more biofuels? And repeatedly, the pain point that has come up is, well, the supply chain is actually quite opaque. So we don't quite know what we're getting, we
don't know what we're paying for. So what we've done is we've basically scoped a pilot with 13 vessels bunkering, meaning refueling at three different ports on three different continents. So Singapore Rotterdam and Houston with different kinds of biofuels with the goal of bolstering the supply chain integrity. So we're gonna use a tracer technology, we're gonna go all the way up stream to the biofuel producer and we're gonna put that into the biofuel, it's a tag and flag so you know
where it originates from. So you know, its carbon footprint at the beginning and then you follow it down the supply chain. And so then you can have assurance on the quality on the quantity on the abatement potential and that should give confidence to the purchaser um to justice
by the green fuel premium that 11 is purchasing, Right? So, so that's sort of the idea to bolster the integrity of the supply chain and we're doing this for biofuels for now because biofuels are, is available today, but looking forward when green fuels become available, they're not going to be available at scale immediately. So again, this drop in concept of mixing green with gray is going to be important. And again, there you want to know how much of the green is.
They're the quality of the green, the carbon footprint of the green fuel um so that you can justify the green fuel premium. So we think this framework is going to be extensible to future green fuels as well.
That's really interesting. So now on the lng part you talked about the risk of methane leakage and so on. So walk us through a little bit about the potential actual practice and what kind of solutions do you have in mind to deal with the leakage issue?
Well, I mean, I think um so the leakage, of course the engine um leakages something within the sector and that's something that engine manufacturers are working hard to address. And in fact I think um done right. Um um the engines actually have very very little slip or leaks and so the the large portion of the leeks actually
happened upstream right at the wellhead etcetera etcetera. Um so there, I think you need constant monitoring technologies to know that you're not leaking methane um and and I know there are satellite companies etcetera that are looking at this. Again, this is out of this is out of our sectorial scope. So um we haven't kept track too much except to say that it's important um for upstream to manage the leak and manage the slip along the way.
Very interesting. Okay, so I'm not going to use the word science fiction anymore. Frontier technology. So these are the intermediate solutions. Where do you see the most exciting? The biggest potential on the frontier side is
Yeah. So, I mean, so these would be the zero carbon fuels. Right. And and so these would be um, they're also called E fuels because E stands for, you know, from electrons. And so the the implications, you have enough renewable electrons to generate green hydrogen and use that green hydrogen as a feedstock to produce either ammonia. So that's called the green pneumonia or e methanol, ethanol has one added step of complexity in its production in that methanol still has a carbon.
So in order for the methanol to be zero carbon, you need either a biogenic source of captured carbon or you need direct air captured carbon to make that methanol in order for the methanol to be zero carbon. Okay, um or it could be any kind of synthetic fuel, like a synthetic diesel etcetera, etcetera. So the idea is it originates from renewable electrons. So those are the fuels of the future. And those are the fuels that would um, in the long run allow shipping to completely de carbonized.
But these fuels aren't available, like, I mean take ammonia for for for a second. Um, there's very little green ammonia to be to be spoken off today. Right. Um and so so we need time for the infrastructure to scale. We need time to build up that supply chain. We need time for the production to scale up so that these fuels are available um to the shipping community. But I mean, there are lots of end uses for ammonia. I mean like fertilizer to Right? And so um yeah, so, so
so I think um time we need time. And so that's why in the interim one needs to think about the near term solution as well as the mid term solution, which is carbon capture, which I understand will come back and talk about in a little bit.
You wanted to go right there? Yes, I wanna I've heard you in other forum talk about carbon capture and I've heard some challenges to the notion of carbon capture as well. So I went up and read a little bit. So there are certain climate activists who argue that, you know, carbon capture is expensive. It's energy intensive. It's risky to store and risky to dispose um walk us through the potential as well as the risks around carbon capture.
I mean, the short answer is what you said is all true. But then again, what technology doesn't have a drawback, right? I mean, even the fossil fuel that we use today has a major drawback. And that's uh that's that's it's used basically has caused irreparable damage to our environment and yet we use it. Right. I mean, so I think we need to go in with eyes wide open, understand the pros and cons and then try to accentuate the pros and then eliminate or mitigate
the cons. Right? And so so I think that's how I think about all technologies and carbon capture and sequestration in particular. So the idea of carbon capture is um you're going to take um C. 02 emissions out. Um And so there's point source carbon capture and that's basically carbon capture of flue gasses. Um um and so they're the sio two is is more concentrated because it comes from flue gas, whether it's, you know, a power plant or you know, a cement plan or a steel plant. So this is on land,
let's talk about on land first. Um and um while the technology um overall is still sort of in the demonstration stage, these point source carbon capture technologies would be the most mature amongst them. And I think, you know, I mean depending on which report you need, it's about $100 a ton for you to break even okay for such technology. So yes, it's expensive.
Um the other technology that's sort of not as far along is something called direct air capture and that's you'd have to capture carbon and and basically separate carbon dioxide out from atmosphere. And because it's less concentrated, it's just gonna be more energy intensive and it's just gonna cost more And they're, the cost is between I mean I've heard numbers between $250 a ton to upward $1000 a ton. Okay.
Um um For shipping we're thinking about carbon capture on ships because you know as you burn fuels you're generating carbon dioxide and it comes out of the funnel if there's an opportunity to capture that carbon dioxide um then you're really releasing less into the atmosphere. Um We understand that there's no economies of scale. I mean essentially we're putting a small chemical factory on individual ships right? Nonetheless as long as we're thinking about sectorial
emissions and we want to reduce sectorial emissions. This is something I think shipping needs to think about. Um So um um what are what what is involved in the process? Well it involves capturing carbon dioxide first and then once you've captured that C. 02 you need to store it on board ships. So you need to liquefy it and then store it on board shifts and then you need
to get rid of it. Um And so there is a reverse bunkering process or an offloading process that one needs to think about and then one needs to think about off takers, what do you do with that carbon dioxide once you've captured and you've offloaded it. The last thing you want to do is to release it back into
the atmosphere. And so we think this is sufficiently interesting and important to the sector that we've actually two weeks ago just launched another pilot um looking at ship world carbon capture, and here this is going to be the largest carbon capture a pilot to date. It adds Scale because we want to do everything to the extent possible um under real world conditions, under commercial and operational conditions.
Um so we've identified standard bulks um medium range tanker, and we've identified the medium range tanker because um similar sized vessels contribute about 17% of shipping emissions. So it's a big sector that we can influence if we can demonstrate this technology to be done correctly. And so the idea is to capture carbon dioxide at a 30% capture rate on this medium range tanker um over 500 hours of operations. And then to liquefy it on board. So there's a lot of energy demand associated
with liquefying it. And so the part of the pilot is to address the energy demand
side of things. Um And so we're looking at waste heat um we're looking at d tuning the engine perhaps to generate a little more waste heat, so that net net, you know, while the engine is suboptimal, maybe net net when you consider the energy system on the vessel itself, that it would be more productive use of waste heat to use the waste heat to run the scrubber for carbon capture and then um and then we need to demonstrate offloading
that carbon dioxide. Um and then and then we've identified an off taker to take that carbon dioxide. So it's an end to end pilot um from capture to um to in this case it's a utilization as opposed to storage. Um but I don't want to poo poo. The challenges beyond beyond capture and storage. Um I think the challenges that you had referred to um when you hear about the activist talk,
it's about storage and disposal, right? And so sequestration is really important and um as long as carbon capture is going to be part of the portfolio of solutions, one really needs to think about trans boundary handling of C. 02 because where you collect, even on land where you collect is not necessarily going to be where you store simply because the reservoirs aren't there? Um So one needs to think
about trans boundary issues. And currently trans boundary issues are very challenging because who wants to take your weight, Nobody really wants to take. There are risks and liability and loss and damages that are associated with um with taking somebody else's C. 02, right? So an international framework needs to be in place to be able to help move this along. Um But I take I take inspiration and I'm encouraged by a couple of commercial
contracts that have been announced. So there is a commercial contract between uh Norway and the Netherlands where it's going to be captured in one country and it's sequestered in another country and this commercial contract is backed by the relevant ministries of both countries. There's another commercial contract between Denmark and Belgium.
So I mean I think we need to look at these kinds of examples and learn from these kinds of examples and see how we can extend this on a global basis so that you can actually capture in one region and then store in another region. Right.
Very interesting. Lynn can you help me sort of visualize the process? So there's a tanker like the way you made me help me visualize the drag sail in the tanker that you saw in. So there are these big funnels and a big maritime vessel and there will be little filters in front of the nozzle of the
no no no. So so there will be funnels and then basically the the emissions are then channeled into another scrubber. And this is essentially a small chemical factory. It has a mean solution. So it's a basic solution and when the basic solution meets carbon dioxide which is acidic nature, it's going to absorb the carbon dioxide into the amine solution. And so then now you have a solution amine solution that has the carbon dioxide in it, it then has to go somewhere else where it gets really
and this separation is very energy intensive. And then once it's separated, the amine solution is recycled and it can capture more carbon dioxide. The captured carbon dioxide is isolated and then it can be either liquefied into C. 02 tanks or there are technologies that are being explored to actually um solidify it into calcium carbonate for example, then
it's easier to transport. Um So basically it's a recycled loop of solution that absorbs on the one end and then D's orbs the C. 02 on the other side, if you will.
Sure, and tankers are large. So I'm assuming space is not going to be a huge issue, even if we were to set up these little chemical factories on top.
Well to the contrary, space is always going to be an issue. So in fact, I am. So this tanker that we've identified, it's a standard imperil what happened to be bunkering in the waters of Singapore. So we had a chance and so we boarded it to look at where we would put the C. 02 tank because we um you know,
we're in the engineering design phase right now. But preliminarily I think we've identified that we need to 300 cubic meter C. 02 tanks to hold the C. 02 because for every ton of fuel you burn you generate three tons of C. 02. Um So there's a lot of C. 02 that needs to be stored onboard. And so we were looking for space to store this and we've identified sort of space to be able to store this and and part of um I mean, the tanker, so so the different ships
have different space constraints. Right? I mean, so tankers still have deck space where you can put tanks, but a container ship, for example, does not have deck space. And so one would have to think hard about where you would put the tank, right? Um so I think different segments are going to have different challenges and therefore different solutions.
So shipping is very interesting in that way, because it's very heterogeneous and so the solutions by nature is going to be very heterogeneous as well, you
know, I'm just hoping and praying that among the various listeners of this podcast, there are some budding engineers out there who will be sort of riveted and inspired by all the unsolved problems in this industry and we want to put their minds to it because this is getting me very excited for. Sure. Yeah,
I mean, I'm excited to, you know, I mean, maybe I shouldn't say this, but I will anyway, I feel like I'm I'm I'm using more of what I learned as a chemical engineer now than I have when I when I when I was teaching. Um because when I was teaching and doing research, I was very focused on. Um and and my team is still currently working at Princeton, right? We we developed solar cells and so we're very focused on specific fundamental questions that we're trying to answer. And
so um um it's it's not these engineering principles per se. Right? And so so it's sort of the kinds of things I learned as an undergrad that I'm applying um to to the kinds of problems that I'm seeing today in shipping.
Okay, so since you mentioned solar cells and your own research, I have to go on a tangent and ask you, why don't we see solar cells on top of ships?
Uh Well, I mean, I think you can, and in fact, um there was a demonstration ship called The Energy Observer um that was here that docked here and it's basically a catamaran um that is zero carbon. Right? So it's got solar panels, it's got wind sails, it's got basically an electrolyzer that produces hydrogen for at night when the wind doesn't blow in, the solar panel can't generate
electricity.
Um it's a catamaran, but you know, it's it's for experiments. Um and for demonstration that you can actually sail without without without without fossil fuels. That said, I mean, that's a small catamaran. Right? And so for these deep deep sea going ships, it's it's just very challenging. You may be able to put solar panels to provide some auxiliary power. The question is always going to be the trade off, right, what space? And so surface area are you sacrificing and how much power are
you generating? And so when you do that equation, I think um frequently you'll find that it doesn't quite make sense or shipping for these big ships to think about solar panels. Um
I wanna switch the discussion a bit toward the taxes and levies around carbon. So what are your thoughts on carbon taxes? Especially in Singapore is a big issue. You know, recent budgets have talked about progressively raising carbon taxes in this country. We're discussing issues related to border adjustment tax coming out of european union. Um so in the context of maritime and in general, where do you stand on carbon taxes?
Yeah. So, um at the so I should say at the outset that, you know, G Cmd were not a policy think tank. Right? And we we try, I mean, um so we are technologists, so we we try to look at solutions that said, I mean, I think it's really, really, really and I'll add two more really, really, really important
to have a price on carbon. Um and and and I think the specific market based measures with which we apply a price on carbon um were um sort of we have less of an opinion about if you will, I think what we have an opinion about is that it needs to be fair. Okay. And I think um shipping has a tremendous opportunity
in this regard. Um so I join shipping because, you know, shipping is a global industry and so it's regulated by a single body, which means that if we can agree on a single market based measure or if we can agree on a set of market based measures, it can be applied through globally. So then this doesn't create any um any distortion to the market. It doesn't create any unlevel playing field, right?
As opposed to electrification. And the power sector where I came from, when I was looking at energy systems there, it's very fragmented. Um forget about talking across state boundaries. I mean, even regionally, you have different um different commissioners that are working and different regulators. And so they're to pass a carbon policy becomes a little more challenging right here. I think there's a tremendous opportunity because shipping is a global industry. So we should
definitely think about um um market based measure. And there's tremendous conversations that are happening at the I. M. O. Now and just yesterday um in one of our trade journals, uh you wouldn't know this because you probably don't read our trade journal. Um The International uh Chamber of Shipping had announced that it submitted a proposal to to the I. M. O.
Um called the Fund and reward scheme. And so the idea is that, you know, um ship owners are going to contribute um a flat amount based on the carbon emissions, their annual carbon emissions. And this amount then gets pulled together. And this amount can be used to incentivize first movers by paying for the uh paying for the green fuel premium, right? And so so I think these kinds of things
I think can work. Um we just need to make sure that it works across the sector, i. E globally for shipping as opposed to sort of regionally because I think regional patchwork type policy can really hurt the industry because it can create unlevel playing field.
Absolutely. Um, Lynn earlier, several times you mentioned certain pilots that GCM D is doing, you know, initiatives and partnerships. Um so I think we talked a little bit about the ammonia bunkering study. Um and you also talked about the sailor, wind assisted propulsion. Anything else that you know that is taking a lot of your time these days in terms of initiatives and partnerships?
Yeah, so, I mean, so we talked about the biofuels, right? The framework for, for supply chain integrity. We talked a little bit about the shipboard carbon capture. Maybe I'll take this opportunity to tell you about the ammonia bunkering study that was done. Um I'll start by, I mean that was our first that was our first study. And so we actually commissioned that study two months into our founding, that was how important the study was. And we knew we needed to do this. And again, I mean, this is
with an eye on future fuel. Right? So ammonia is a future fuel. Um, ammonia is super toxic, right? It kills. Um and so if we were gonna use it as a marine fuel, we need to have a good handle On how to manage and handle it safely. Um so if you look across the value chain for ammonia, certainly there are people who are trying to produce ammonia at scale and that cause um and within the sector, you know, the first engine will be built 2020 for 20, time
frame and then the first ship will be available. And so we asked ourselves, well, where's the gap? How can we plugging the gap and what can we do to kind of accelerate the eventual adoption of ammonia? And we identified safety as being one of them. How do you safely bunker,
ammonia bunkers and refueling ammonia. So the idea of moving molecules around safely um and so we said, we said we were going to do an ammonia bunkering pilot um and then we quickly realized, oh we can't actually do an ammonia bunkering pilot because there are no safety guidelines. And if there are no safety guidelines we can't generate a regulatory sandbox to do the ammonia bunkering pilot.
So we took a step back and we said, okay, we'll do what commission a safety study and so that's what the safety studies about its to identify the, you know, um and define the envelopes, the safety envelope, the operational envelopes um so that we can do a bunkering pilot um buried in there is also a competency framework development because um it's not enough to just come up with the safety guidelines. Um you need to train the seafarers so that they
can handle ammonia safely. And so the competency framework is
buried in there as well. Um so I'm happy to report the study is on track, so it will be done by the end of the year and then we would be ready to share beginning of next year and so we're in the process of scoping what that pilot would look like and how we can use these guidelines um with the help of the regulatory authorities of course and they would have to eventually approve and ultimately approve uh the guidelines and then approve a sandbox for us to do this pilot.
Um so so again, it's it's it's demonstrating how we can safely move the molecules around because um it's with that, that I think bunkering can happen. Right. Um so
great stuff. Well, good luck with that. Well, we'll look forward to the announcement toward the end of this year, early next year. Yeah, absolutely. Um you mentioned earlier about Scandinavian countries being fairly progressive in some of the frontier issues really to carbon capture and sequestration beyond that. I mean, which countries are the leading beacons right now in maritime de conversation?
Um Well, I mean, I think I'd be remiss if I didn't mention Singapore. Right? I think, look, I mean we were set up in record time from the time that we were, you know that the recommendation was put forth to the Singapore government to the time we were
set up was a matter of four months, right? I mean it's incredible how so supportive the ecosystem here is and how um how focused we are on the decarbonization agenda and and I mean I think um this is to be expected because Singapore is such an important maritime hub, so um I'll give you a couple of stats, I bet you didn't know this. So Singapore is a bunkering hub, bunkered more than 50 million tons of fuel last year and global bunkering is about 250 million tons. Yeah, it's bunkering
volume in. Singapore is greater than the bunkering volumes of the next nine largest bunkering hubs combined, That's how much Singapore bunkers and um ships today, um irrespective of where they go, they generally bunker at more than 50% of the ship's bunker only at one port. So Singapore sees lots of ships, meaning that if Singapore can figure out how to decarbonization shipping here, it's gonna have a huge impact
on the maritime sector. Right? And that's why Singapore is looking at a multi fuel future, it needs to be ready with different kinds of fuels because we've just said that, you know with different ships and different segments of ship, different size of ships, they're gonna need different kinds of fuels, they have different solutions. So, so, so I think it's important um to to sort of look ahead that way. So, so I think, I mean Singapore is very, very progressive
in that sense. And of course the M. P. A. Had just launched the maritime blueprint. Um and so it talks about different measures of how it's gonna dick carbonized both on the portside on the infrastructure side and and then of course on the ship's side of things. Um so we mentioned Norway, um you know, it's got green coastal shipping programs, it's got lots of pilots going. Um they are a very good partner of ours in terms of, you know, looking at shipping and decarbonization, shipping.
Um uh the M. P. A. Here had just signed a green corridor agreement with the port of Rotterdam. So Netherlands is another place to look to a port of Rotterdam is another big and important ports. And so this green corridors idea is again to to harmonize standards at both ports to be able to incentivize and and kind of accelerate decarbonization between for for ships that sail between these
two ports. Right? And then finally I would say Japan, I think Japan, you know, has done a lot of trials to look at different bringing in different hydrogen carriers, both for their power sector and for the shipping sector. Um and so they are very progressive in that sense as well. And um there are my opinion, there are lots of learnings to be had um and sharing to be had with Singapore because like with Japan, sorry, because like Singapore, Japan has very little
natural resources. Right. Um so if we, as we move to a renewable energy economy, like we need to import our energy. And so how do we think about this? So there are lots of, I think exchanges that can be had, you
did not mention the U. S. Or china?
Um Well, I mean um the U. S. Is not a big player in shipping. Um um and so I think from a from a sectorial perspective, I didn't mention us because it's not a friend shipping. Um and and um china certainly has uh is building its fair share of ships. And so I think in that sense, I think um working with the shipyards is very important because they are the ones that are gonna be responsible for putting on retrofit, uh technologies hardware on on the ships, they're gonna be the ones that are
going to install new engines on the ships. Right? And so I think in that sense they're important too
Sure because you know, at the very beginning of the podcast, you said that, you know, 90% of global trade is on on the waters and I think of China, you know, the largest exporter in the world, but I suppose it also depends on, you know, who actually owns that shipping line and where the sort of the responsibility of the regulatory uh sort of the window goes in.
Um so, so yeah, I suppose, you know, countries like Singapore, you know, which are big entre ports, you know, it makes sense for them to take the lead into, so to speak. Um Lynn in a recent interview, you were talking about the CMD and you said something to the extent that you know, you've got a role to play but not just in providing funds but also in providing value adds. So curious about this this role of G. C. M. D. As a neutral convener of sorts.
Yeah, I mean um yes. So I'll come back to the ammonia bunkering study um to illustrate this. So with the ammonia bunkering study um Typically when one does a study like this, it takes a couple of years to get a safety study done. Um because one typically does it serially meaning that one does the study then consults with industry to kind of
refine the study. When the study is done, you submitted to the regulatory authorities who then kind of say, well you're deficient in this, this this and this go back and do more And that iterated process takes a couple of years. We didn't want to wait a couple of years because we don't have time to wait. And frankly, I'm impatient. Um so what we did was we were pretty heavy handed about this study, we assembled at the get go 22 industry partners across the supply chain.
And we when we um selected after technical evaluation D. N VSERv wrong and Singapore Maritime Academy to do the study, we told the trio that they needed to work with these 22 partners that these 22 partners have experience dealing with ammonia, They have knowledge they need to work with them. And then alongside, we worked with M. P. A. And had mph help us set up a regulatory working group.
Um and so these discussions are happening in parallel and the consultations are happening in parallel so everybody has kept abreast of the progress. Okay? So that if there's anything deficient that we need to address or there's any concerns from a regulatory standpoint, we address it at the get go. And so by doing so we've been able to kind
of shorten the study down to about eight months. Um and we're hopeful, I mean at the end of the day it still needs to be approved but we're hopeful that it would be approved relatively quickly um for that reason. Right. And so this is sort of how we can value add as a neutral convener, we can bring people um both from the private sector and then the public sector together um we can convene um we can bring nominally competitors together to work together
um in another example. So um so in in in the biofuels trial, I mean we brought 13 vessel owners and charters together to work together on this pilot. Right? Um so so again, I think where we value add is where there's tremendous complexity when it's simply to pilot a single solution by putting it on board ship and it's sort of a one player, one solution,
one solution provider, one player type thing. I think there are lots of other players that can add value that way, but we can add value where there's tremendous complexity and where there's a lot of stakeholders because we can bring people together and we can provide the transparency where the transparency is needed uh to move, does that make sense?
Absolutely. I think this is an important role for you to play in addition to just, you know, funding pilots, but it helps, you know, results on these complexities and knotty issues around that. But Lynne the other big constraint is funding uh you know, green financing. So as you know, we have dbs are, you know, very big champions of green financing and green loans um but I don't think, you know,
the financial system has solved this issue yet. So tell me a little bit about your experience and sourcing green financing from both the bank and non bank sectors.
Yeah, okay, well just to put things in perspective to Dick carbonized shipping, the number that's been thrown around is you need $3 trillion.80 percent of the $3 trillion is going to be spent on land infrastructure. Right. So, so think about it to Dick carbonized shipping, you need to spend money on land infrastructure right there in itself is already a hard problem because the money actually flows out of the sector.
Um, and then of course this land infrastructure, well, what are they, they would be storage terminals for new fuels, they would be, you know, bunker facilities for new fuel, etcetera, etcetera. Um, and so these are first of a kind projects and I'm sure you've heard plenty because I've certainly heard plenty. These are not bankable. These are not bankable. So there's plenty of climate action money out there, but they're really
for things like solar projects, wind projects. But these first of a kind projects, it's really hard because they are not bankable. So, um, we're thinking hard about how, you know, um, we can distribute risk with organizations that can best tolerate these different kinds of risks. Right? And I think, you know, GCM B has a special role to play here because we can help the risk technology, we can help lower the risk on the operations side
of things. We can even open dialogue with regulators. So to lower regulatory or policy risk to, um, and then is there an opportunity to crowd in monies from different sources with different tolerance of risk to, to be able to start moving on these kinds of projects. Right. And G CMd is fortunate in that we have a small war chest that we can also put money in, but let's face it compared to these numbers that we're
talking about GCM these money is chump change, Right? And so we need to see how we can crowd in this money and and what it means again to do things in the 30 years that we want to do things in. It's really, we can't afford to wait to do things sequentially. We need, we need to be able to invest in fuel production facility before they're off takers. We need to invest in zero carbon emission ship before fuel production is at scale. I mean, these things just need to happen in parallel.
And so um folks like you need to help us think about how to do this. I mean, I know nothing about finance. I just know that we need to kind of mobilize these so that we can crowd in the resources to be able to get going quickly.
Yeah, like I said, I don't think finance has solved
this yet. It's another of those, you know, big issues and in terms of risk underwriting or public private partnership, uh and the cost of capital associated with these things as well as the risk mitigation, it's, it's a big area, we will have to revisit this in a couple of years timeline to see, you know, whether my part of the industry is being a good partner to your part of the industry in pushing this forward um lin you used the phrase multi fuel future earlier.
Um I think having talked about a bunch of, you know, sort of narrowly defined points earlier, maybe as a final question for this podcast you just lay out for me, let's say the 2030 vision that you have for a multi-fuel future.
2030 is hard man because I think a lot of these um I think a lot of these green fuels aren't going to be available at scale to us until about mid 20 thirties. So I suspect um there's still gonna be a lot of um a lot of ships running on fossil. Um And I think to the extent possible we should look at um you know um where we can do biofuels um where we can again do L. N. G. Responsibly. One of the things we're looking at is L. P. G. Um um and that lowers carbon emissions too and doesn't deal
with methane slip. So could that be an opportunity? So that's something that we're still kind of trying to understand and wrap our heads around. Um and then um to the extent that green fuels are available, I mean if you look at these reports they basically say in order for us to hit Paris targets. So net zero by 2050 you need to have 5% of the fuels being green fuels by 2030. And so we need to crowd in that 5% green fuels uh to get going on this. So um yeah um it's challenging.
I'm really glad that you are sort of you know waited in reality that you see that, you know, just because I gave you this eight year, you know, window to sort of expand the vision that everything's gonna work out, but you're being very, very realistic and I appreciate that very much these are, you know, generational existential issues, but we have so much work to do in in cracking the code. Um, lin liu thank you so much for your time and insights,
thank you for having me again. I mean I think I'll, and by saying that you know, it's, it's really important to be grounded and understand what what is happening on the ground and how fast we can move. But that's not to be despondent. Right? I think we need to roll up our sleeves and get going and we need to double down is what it comes down to. Thanks again, absolutely
appreciate your call to action. I also thank our listeners for listening to this very interesting episode of copy time podcast was produced by Kendall bridge from Spice studios, Jz Sharma and violently provided additional production assistance, copay time is for information only and does not rip
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