The dry bulk sector's decarbonisation debate has evolved from a discussion about whether shipping will reach net zero to a focus on how the industry can make the transition work commercially in an increasingly uncertain world. This shift in perspective is evident in the recent Geneva Dry conference, where industry experts gathered to explore the practical realities of decarbonisation.
The panel discussion, moderated by Mette Asmussen, highlighted the importance of constant care and agility in the face of uncertainty. Eman Abdalla, founder of Seathrew Marine, noted a significant shift in the industry's mindset over the past two years. Initially, the focus was on whether decarbonisation was a shared belief, but now the question is how and by when.
Despite geopolitical challenges and regulatory uncertainty, progress has been made through pilot projects, operational efficiency gains, energy-saving devices, and dual-fuel newbuildings. Abdalla emphasised the need for scalability and investable decisions moving forward.
The economic reality of dry bulk shipping was a recurring theme. Alastair Stevenson, from SSY, pointed out that carbon costs have a proportionally larger impact on bulk shipping economics, with EU emissions costs accounting for 1-2% of cargo value in bulk trades, compared to fractions of a percent in other sectors. Stevenson also highlighted the broader burden of decarbonisation, including legal, compliance, and contractual complexities.
Vale, a Brazilian mining giant, has been at the forefront of shipping efficiency measures. Michelle Gonzalez, Vale's global head of chartering, shared the company's extensive efforts in testing technologies such as advanced hull coatings, propeller upgrades, and wind propulsion systems. While some trials yielded mixed results, Gonzalez emphasised that innovation is rapid, and every pilot project is an improvement over the previous one.
Wind-assisted propulsion was identified as a promising short-term solution for bulk shipping. Engebret Dahm, CEO of Klaveness Combination Carriers, praised wind-assist systems for their combination of lower capital costs and performance gains. Operational measures, such as AI-based weather routing and digital optimisation systems, were also highlighted as relatively low-cost ways to reduce emissions immediately.
Louis Dreyfus Company's shipping decarbonisation lead, Fabian Kowatsch, underscored the importance of collaboration between owners and charterers. The company has successfully grown from a single decarbonisation initiative to 14 collaborative projects last year, focusing on coatings, engine optimisation, and fuel-efficiency projects.
The panel discussed the significance of fuel flexibility and optionality in an uncertain regulatory landscape. Vale's ethanol-fuel plans and Louis Dreyfus' methanol dual-fuel vessels were mentioned as practical early-stage solutions. However, owners expressed caution about committing to expensive fuel transitions without regulatory clarity or customer support.
The question of who ultimately funds decarbonisation was raised. Abdalla argued that the industry serves other industrial players, and unless they are willing to pay for decarbonisation, the industry cannot invest and fund it independently. Dahm countered that the overall cost impact on end consumers remains relatively small.
The session also addressed wind propulsion technologies, charter-party reform, and LNG. Dahm defended LNG as a fuel that offers meaningful emissions reductions, while Stevenson warned that shipping may compete with other industries for access to low-carbon fuels. The consensus was that the industry needs faster implementation rather than more debate, with Gonzalez emphasising that decarbonisation is a non-negotiable reality.
