KUALA LUMPUR: Local shipowners can take steps towards reducing emissions across their fleet in the short term by increasing the energy efficiency of their vessels.
This would be vital for the local operators to participate in the decarbonisation initiative, despite the financial constraint of replacing its entire vessel with fuel-efficient or retrofitting its existing fleet.
PricewaterhouseCoopers (PwC) Malaysia partner, South East Asia (sustainability and climate change) leader Andrew Chan said shipping companies could capitalise on digital technology, leveraging ship-to-shore data feed technology to monitor the onboard operations against an ideal baseline.
"This allows key operational decisions to be made in real-time to achieve optimum efficiency while reducing carbon emissions," he told the New Straits Times recently.
He said using alternative fuel sources, which are significantly less carbon-intensive, such as biomass and liquified natural gas (LNG), would offer significant reductions in carbon emissions.
"This can be done without the need for a complete overhaul of current engine setups," he said.
Chan said modifications to ship operations would also improve energy efficiency and reduce emissions.
For example, he said a slow steaming vessel at a significantly reduced maximum speed is proven to save money and fuel.
However, he said decarbonisation efforts might need to be accompanied by relevant metrics mapped to targets.
"The quality and availability of ESG data will continue to inform investment and policy decisions, especially when it comes to government support for the shipping industry.
"This is due to the increasing appetite of investors for the environment, social and governance (ESG) performance and its demonstrable impact on financial performance."
PwC saw various avenues for the government to support the development market demand and supply of low or zero-emission ships.
It said the government could assist the shipping industry in assessing local and regional market demand, price points and feasibility of transitioning to such vessels.
"This feasibility study will be crucial in helping the government determine the costs in providing the above support commensurates with the potential economic benefits," said Chan.
This would facilitate the government's efforts to improve its fiscal discipline and reduce its budget deficit.
Additionally, he said the government can reduce the cost of clean power sources and fuel for green vessels and work with suppliers to secure an adequate supply of clean fuel.
"This can be done through a combination of tax incentives, grants and financing. The Maritime and Logistics Scheme, which was first announced in Budget 2021, can be expanded to support decarbonisation objectives, and its scope could include the development of infrastructure to support more sustainable seaports."
Chan said the government could also play a critical role in bringing together various stakeholders from vessel owners, operators and agents to clean engines, power and fuel suppliers to coordinate the development of a sustainable maritime transportation system.
This includes defining a suitable domestic emission trading scheme for the shipping sector that supports transition financing.
Meanwhile, he said establishing government-to-government (G2G) agreements on a low carbon footprint would create more consistent ESG expectations for local ship operators and the different countries they operate through.
"Supporting the upskilling of the workforce to utilise new technologies and behaviour to operate vessels more efficiently.
"The current Green Technology Financing Scheme to include infrastructure and green fuel development for the shipping sector."
The availability and scale of fuel sources and stations would be a factor in how quickly the transition occurs, added Chan.