Is zero emissions shipping even possible

Is zero emissions shipping even possible?

Oil analyst turned green soothsayer, Thina Margrethe Saltvedt, discusses how innovation and turmoil is fertile ground for the shipping industry.

Oil analyst turned green soothsayer, Thina Margrethe Saltvedt, discusses how innovation and turmoil is fertile ground for the shipping industry.

It must be a sign of the times when Norway’s leading oil analyst, a woman no less, who, in a distinctly male-dominated business, changes gears completely to become a sustainability expert at the region’s largest bank.

Oil’s days are numbered.

For Thina Margrethe Saltvedt, 46, becoming a senior advisor in Sustainable Finance at Nordea Bank in January 2018 was both a personal and professional choice.

“I worry about climate change on a deep, personal level,” says Saltvedt. “The environmental changes we’ve seen are really scary. But we still have time to do something about it. And professionally, the sustainability industry is very exciting because there are so many problems still to solve, and so many new technologies, solutions and ideas to develop.”

Saltvedt has spent the last decade analysing the now very mature oil markets, their swings and moves. Before Nordea, she held a position with Norges Bank within the Financial Stability area. With a background ballet, Saltvedt holds a Doctor of Philosophy (Ph. D.) degree in Economics from University of Manchester Institute of Science and Technology (UMIST), United Kingdom. She is one of only a few female energy analysts in the world.

In her new role, Saltvedt aims to look at the macroeconomic or big-picture issues.

She believes that for the green and sustainable revolution to really take effect around the world, it will be crucial, first and foremost, to make the technologies profitable. This is already happening in the automotive industry as batteries become cheaper to manufacture.  

“I mean a car is basically a small computer these days,” says Saltvedt. “In general, shipping is taking cues from the automobile industry but is still lagging a little behind waiting for the first mover,” she adds.

This could be because energy supplies from oil, gas and coal have historically had great political consequences between the haves and have nots in the world. But theoretically, since everyone has access to solar, wind and water, the question of accessibility will be based more on the availability of technology and not the actual resource.

“The world hasn’t yet reached a tipping point with regard to sustainable technologies (my best bet at the moment is 2025 at the earliest), but the changes that are happening to the energy sector are faster than anyone thought possible,” acknowledges Saltvedt.

“Future winners will be those that grapple with the technology early on. That much we can say for sure,” she says.

The domino effect

“If one is to learn from the past, a trigger of some sort is required to make companies and authorities develop new solutions to a problem. The sky high oil prices in 2008 for example meant that fishing boats could no longer fish which led to a push to developing new sources of energy. Today, the problem is climate change, which the UN says is the biggest problem facing mankind, and we all know the effect of this.”

While slower to adopt change compared to more consumer-based industries, the shipping sector is facing its own cargo-load of imminent green issues. The first issue is the IMO’s 2020 deadline for lowering sulphur and NOX emissions which will require a major rethink by shipping companies to find alternative fuels and technologies.

“Fuel scrubbing technology has been developed and batteries have been successfully used in some coastal ferry applications, but the industry in general seems to be waiting to see what the next guy will do,” admits Saltvedt.

Shipping’s future

That said, it cannot be denied that shipping as a market has its own unique characteristics - ships cost millions to build and operate unlike personal cars - but to truly develop green shipping will require a new way of looking at what shipping really is.

“With 3D printing technology, maybe we won’t need shipping in the future as much as we do now. What are the world’s transportation requirements for goods and logistics in the future? Goods can already be moved from a train to a ship automatically without human involvement so maybe more automation is key. Maybe doing this will lead to new business models just like it did with the auto industry. Who knows?”

But Saltvedt says one thing will certainly put the screws on the shipping industry.

“Credit rating agencies like Moody’s and S&P 500 are planning to include climate risk in their credit risk rating models of companies and countries so there is an incentive to find alternative and greener modes of shipping,” she concludes.  

Thina Margrethe Saltvedt will talk about “Journey from fossil fuels to zero emission shipping” at Wärtsilä’s Future Innovation Day on 26 April 2018 in Stord, Norway.

Written by
Alexander Farnsworth