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How AI is Revolutionizing Safety Management in the Maritime Industry

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How AI is Revolutionizing Safety Management in the Maritime Industry

The maritime sector is embracing digital transformation, with artificial intelligence (AI) emerging as a game-changer for safety management. Companies like WiseStella are leveraging AI to simplify compliance, reduce cognitive strain on seafarers, and enhance safety standards across global fleets.

Tackling Documentation Overload with AI

Seafarers today face mounting demands from complex safety regulations and documentation. According to Ali Demiral, Chief Technology Officer at WiseStella, this “cognitive load” can create stress, particularly during safety assessments. To address this challenge, WiseStella has developed an AI-powered solution called “Wise-AI,” which uses large language models (LLMs) to analyze historical safety data and deliver actionable insights.

“Wise-AI empowers seafarers and managers to navigate new safety requirements with confidence,” Demiral explains. For instance, if a crew member is unsure about compliance during a self-assessment, Wise-AI can analyze input details and suggest potential problem areas with tailored recommendations.

This proactive approach not only saves time but also deepens seafarers’ understanding of safety protocols. By learning from AI-generated insights, crews can anticipate and prevent issues, promoting safer operations at sea.

Fleet-Wide Benchmarking and Tailored Insights

WiseStella’s platform extends beyond individual vessels, offering fleet-wide benchmarking capabilities. Fleet managers can use data-driven comparisons to identify strengths, address weaknesses, and allocate training and resources more effectively.

“Managers can quickly see how their fleet measures up to industry standards,” Demiral notes. “This enables targeted interventions that improve performance and safety outcomes.”

A Tailored AI Solution with Human Oversight

Unlike generic off-the-shelf systems, WiseStella’s AI technology is custom-built by in-house data scientists and continuously refined for greater accuracy. Importantly, the platform employs a “human-in-the-loop” approach—expert review ensures the reliability of AI-generated outputs, which further enhances the system’s predictive capabilities over time.

“The more data we gather, the smarter Wise-AI becomes at identifying patterns and delivering meaningful insights,” Demiral says. The platform also integrates industry-wide data and published guidance, providing a comprehensive view of best practices and common issues.

Transforming Maritime Safety Management

As the maritime industry adapts to evolving safety regulations, AI-powered tools like Wise-AI are becoming essential. By reducing cognitive stress, enhancing safety awareness, and offering data-driven recommendations, these innovations are reshaping how the industry approaches safety management.

“The goal is to move from reactive responses to proactive solutions,” Demiral emphasizes. “Wise-AI equips seafarers to anticipate challenges and drive continuous improvement.”

With companies like WiseStella leading the charge, AI is poised to play an increasingly critical role in maritime safety. By supporting seafarers and streamlining operations, these solutions are setting new standards for efficiency and resilience in global shipping.

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US Targets China’s Maritime Giants: Cosco and Shipbuilders Blacklisted

Heightened Scrutiny on China’s Shipping and Shipbuilding Sectors

The United States has added China’s largest shipping company, Cosco Shipping Holdings Co., and two major shipbuilders, China State Shipbuilding Corp. and China Shipbuilding Trading Co., to its military blacklist. Announced via a Federal Register filing, this move reflects growing concerns over these firms’ alleged links to China’s People’s Liberation Army (PLA).

While the blacklist imposes no direct penalties, it acts as a deterrent for US firms to engage with the named entities and signals intensified scrutiny of China’s dominant maritime sector.

Geopolitical Tensions Amplify Focus on Shipbuilding Dominance

China’s maritime industry, which accounts for over half of the world’s merchant vessel production, has become a focal point in the geopolitical rivalry between Beijing and Washington. US officials have repeatedly expressed concerns over the disparity between the two nations’ shipbuilding capacities, with one US container ship constructed for every 359 vessels produced in China, according to Congressman Raja Krishnamoorthi.

The Pentagon’s blacklist also included Chinese tech giant Tencent Holdings Ltd., battery manufacturer Contemporary Amperex Technology Co. Ltd., and energy major Cnooc Ltd., broadening the scope of industries under scrutiny.

Impact on Markets and Global Trade Dynamics

Cosco’s shares fell by 4.4% in Hong Kong following the announcement, while Cnooc experienced a smaller 1.6% drop. Neither company has commented on the blacklisting. Cosco has faced previous sanctions, including penalties in 2019 for transporting Iranian oil, while Cnooc has been targeted for its offshore energy operations, including projects in the Gulf of Mexico.

Implications for Global Supply Chains

This move comes as supply chains remain under stress from the disruptions exposed during the Covid-19 pandemic. The US’s focus on maritime transport reflects the increasing importance of shipping lines and ports in the broader geopolitical competition. Rising tensions may force Chinese companies like Cnooc to reconsider their US-based assets, signaling potential ripple effects for global trade and energy markets.

Washington’s latest actions underscore the growing rivalry between the world’s two largest economies, with the maritime sector emerging as a critical battleground.

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Port of Seattle and Maritime Blue Renew Partnership to Drive Sustainable Maritime Innovation

The Port of Seattle and Washington Maritime Blue have renewed their Memorandum of Understanding (MOU), reaffirming a shared commitment to advancing maritime innovation and environmental sustainability. This collaboration builds on a history of success and strengthens Washington’s role as a leader in the sustainable Blue Economy.

Authorized by the Port Commission on November 19, the MOU outlines cooperative efforts in decarbonization, renewable ocean energy, sustainable fishing, and marine conservation. Central to this renewed partnership is the Maritime Innovation Center, a forthcoming hub at Fishermen’s Terminal designed to support startups and foster collaboration on climate-focused maritime solutions.

A Shared Vision for a Greener Future

“This renewed partnership underscores our shared commitment to advancing the Blue Economy,” said Joshua Berger, CEO of Maritime Blue. “By combining our strengths, we can drive innovation that fuels economic growth, safeguards marine ecosystems, and empowers communities.”

The Port of Seattle’s Executive Director, Steve Metruck, echoed this sentiment: “This agreement marks an exciting new chapter for the Port of Seattle as we strive to be the greenest port in North America. Together with Maritime Blue, we will explore new opportunities in sustainable maritime practices that benefit both our economy and environment.”

Key Initiatives Under the MOU

1. Maritime Innovation Center: This hub for emerging maritime companies will support innovative startups working on ocean-based climate solutions.

2. Quiet Sound Program: Hydrophones will be deployed to monitor underwater noise, providing critical data to protect endangered Southern Resident killer whales and mitigate the impacts of commercial vessel noise on marine life.

3. Community Engagement: Initiatives like the Youth Maritime Career Launch Program will focus on cultivating a diverse and inclusive maritime workforce while empowering communities through economic opportunities.

Driving Justice, Equity, and Innovation

The partnership emphasizes the importance of equity and diversity in fostering a thriving maritime ecosystem. By engaging a wide range of stakeholders, Maritime Blue and the Port of Seattle aim to ensure that sustainability efforts benefit all communities.

As the MOU brings renewed focus to sustainable innovation, the collaboration between Maritime Blue and the Port of Seattle promises to set a benchmark for green practices in the maritime industry while contributing to a resilient and inclusive Blue Economy.

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Maritime Surveillance Industry Insights: Market Set for USD 42.7 Billion Valuation by 2033

Introduction

The Maritime surveillance market plays a critical role in ensuring the security of international waters by monitoring activities that could threaten maritime safety, environmental health, or national security. According to the Market.us Report, the Global Maritime Surveillance Market is projected to experience significant growth, with an estimated value reaching approximately USD 42.7 billion by 2033, up from USD 21.9 billion in 2023. This expansion represents a compound annual growth rate (CAGR) of 6.90% over the forecast period spanning from 2024 to 2033.

The market’s growth is driven by increasing investments in maritime security technologies, rising global trade, and heightened concerns over illegal activities in international waters. As maritime activities continue to grow in volume and complexity, there is a heightened need for advanced surveillance systems to ensure the safety and security of vessels, ports, and maritime borders.

In 2023, North America emerged as the dominant player in the global maritime surveillance market, securing over 34.1% of the market share and generating a revenue of USD 7.9 billion. This leading position can be attributed to several key factors, including the region’s well-established and robust maritime infrastructure, as well as its significant investments in cutting-edge surveillance technologies.

The United States, in particular, has a vast coastline and is a major global hub for maritime trade, necessitating advanced systems for securing its ports, vessels, and surrounding waters. This has driven considerable government spending on maritime security technologies, including radar systems, satellite surveillance, and automated identification systems (AIS).

As geopolitical tensions rise and the importance of safeguarding maritime routes grows, there is a heightened demand for comprehensive surveillance solutions that can offer real-time data and enhanced situational awareness. The market’s growth is further supported by the ongoing innovations in maritime technology, such as the development of autonomous ships and the greater use of AI in interpreting vast amounts of oceanographic data.

Key Takeaways  reveals that in 2023, the Solution segment was the largest, commanding more than 75.1% of the market share. This dominance is largely due to the widespread adoption of advanced maritime surveillance technologies, such as radar systems, automatic identification systems (AIS), and satellite-based tracking solutions. 

The Surveillance and Tracking segment also played a crucial role, accounting for over 34.0% of the market share in 2023. This segment includes various tools and solutions designed for monitoring vessels, tracking movements in real-time, and ensuring that maritime traffic adheres to regulations.

Within the broader maritime surveillance market, the Military and Defense segment emerged as the leading driver, capturing more than 59.5% of the market share in 2023. This dominance is due to the critical role that maritime security plays in national defense. Countries are investing heavily in maritime surveillance systems to protect their territorial waters, monitor potential threats, and safeguard national interests.

Maritime Surveillance Statistics 

  • As per MSN India report, Indian space tech startup PierSight has introduced the Varuna satellite, a groundbreaking solution for continuous maritime surveillance. The SAR & AIS satellite constellation will provide 100 percent ocean coverage with up to 30-minute revisit times.
  • According to the VesselsValue database, Singapore has maintained its position in 5th place this year, with a fleet valued at USD 85.7 billion, while also ranking 4th globally in terms of the number of vessels owned. Notably, Singapore’s container fleet is the third most valuable in the world, with an estimated worth of USD 22.1 billion, representing nearly a quarter of the total value of the country’s entire fleet.

Market OutLook

The market outlook for maritime surveillance is optimistic, as governments and private organizations invest heavily in state-of-the-art solutions to meet rising security demands. The integration of artificial intelligence and machine learning is transforming the sector, allowing for predictive analytics and automated threat detection. These advancements not only enhance efficiency but also reduce human intervention, making operations more cost-effective over time.

The future of maritime surveillance also emphasizes collaboration. International partnerships are becoming crucial in monitoring shared waters, pooling resources, and sharing intelligence to combat transnational crimes. Moreover, the environmental aspect is gaining importance, as these technologies are increasingly used for monitoring marine ecosystems and preventing environmental damage caused by illegal activities.

Opportunities and Expansion

There are significant opportunities within the maritime surveillance market, particularly in developing regions that are beginning to invest more heavily in maritime security. The adoption of integrated surveillance systems, which combine radar, optical, and thermal cameras with data analytics, presents a promising opportunity for growth. These integrated systems can offer more precise tracking capabilities and faster response times, which are crucial for effective maritime security operations.

Moreover, the market is poised for expansion into new areas, including environmental monitoring and climate change studies. As the effects of climate change become more apparent, particularly in rising sea levels and changing marine ecosystems, maritime surveillance technologies are increasingly used to monitor environmental changes and help in disaster preparedness and response efforts. 

Emerging Trends

A notable trend in Maritime surveillance is the integration of artificial intelligence (AI) and machine learning algorithms, which enhance the detection of illicit activities by identifying complex patterns and anomalies in maritime behavior.

The deployment of autonomous drones and robots, including unmanned aerial vehicles (UAVs) and autonomous underwater vehicles (AUVs), is expanding the reach and efficiency of maritime surveillance, enabling coverage of vast and previously inaccessible areas.

The proliferation of unmanned surface vessels (USVs) is another emerging trend, offering new approaches to maritime security. These vessels are utilized in various operations, such as attacks on ships at port or close to shore, highlighting the need for robust countermeasures and effective response protocols.

Top Use Cases

Maritime surveillance plays a crucial role in various applications, ensuring safety, security, and environmental protection. One significant use case is the detection and prevention of illegal activities such as drug smuggling, human trafficking, and illegal fishing. 

Advanced surveillance techniques, including the use of autonomous drones and AI-powered analytics, enable authorities to monitor vast maritime areas effectively and respond promptly to suspicious activities.

Environmental monitoring is another critical application, where satellite-based systems like CleanSeaNet are employed to detect and monitor oil spills in European waters. These systems utilize synthetic aperture radar (SAR) satellite images to provide near-real-time information on spill location, area, and potential sources, facilitating timely response and mitigation efforts.

Search and rescue operations benefit significantly from enhanced maritime surveillance capabilities. The integration of satellite imagery, AIS data, and advanced analytics allows for the swift identification and tracking of vessels in distress, improving the efficiency and effectiveness of rescue missions.

Major Challenges

Despite its benefits, maritime surveillance faces several challenges. The vastness of oceanic areas makes comprehensive monitoring a daunting task, often leading to gaps in coverage. Environmental factors such as harsh weather conditions and limited visibility can impede the effectiveness of surveillance equipment. Moreover, the integration of data from various sources requires sophisticated systems and skilled personnel, which can strain resources.

Additionally, the high cost of legacy data platforms means surveillance is often delivered only within specific, focused areas, and technical challenges commonly hinder effective cooperation between the large number of organizations and agencies responsible for monitoring and enforcement.

Business Benefits

Maritime surveillance offers significant advantages for businesses involved in shipping, fisheries, and coastal operations. By providing real-time monitoring of vessel movements, companies can enhance operational efficiency, ensuring timely deliveries and optimized routes. This proactive approach helps in reducing fuel consumption and operational costs. 

Additionally, surveillance systems play a crucial role in safeguarding assets by detecting unauthorized activities such as illegal fishing or smuggling, thereby protecting valuable resources and upholding legal compliance.

Furthermore, the data collected through surveillance can be analyzed to predict trends, allowing businesses to make informed decisions and stay ahead in a competitive market. In essence, maritime surveillance not only secures maritime domains but also drives business growth by fostering a safer and more efficient operational environment.

Conclusion

In conclusion, the maritime surveillance market is pivotal in bolstering maritime security, which is increasingly crucial in today’s geopolitical climate. It encompasses advanced technological integrations from satellite imaging to AI, enhancing the capabilities of maritime authorities to monitor and respond to threats. The market is set to grow as global maritime routes become hotspots for international tension, and as nations enhance their maritime operational capabilities.

 There are substantial opportunities for market players as well as the market’s expansion is fueled by technological advancements that allow for real-time data processing and better threat response, making maritime surveillance not only about security but also about ensuring the safety and resilience of global marine ecosystems and the economies dependent on them.

 

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PSA Singapore and Evergreen Marine Partner to Launch Joint Venture Terminal

PSA Singapore (PSA) and Evergreen Marine Corporation (EMC) have announced a joint venture to develop a cutting-edge container terminal in Singapore, a move poised to strengthen global supply chain resilience and elevate operational efficiency. Scheduled to begin operations by the end of 2024, this strategic partnership ensures long-term terminal capacity for Evergreen’s rapidly growing global vessel fleet at one of the world’s busiest transshipment hubs.

Read also: PSA Singapore Boosts Capabilities to Tackle Global Supply Chain Disruptions

Advancing Operational Excellence and Innovation

This collaboration builds on the longstanding relationship between PSA and Evergreen Marine, emphasizing shared goals of operational excellence, digital innovation, and sustainability. The joint venture aligns with PSA’s Node-to-Network (N2N) strategy, which seeks to enhance supply chain connectivity and adaptability.

“Global trade fuels economic growth, connects communities, and drives markets,” said Mr. Ong Kim Pong, Group CEO of PSA International. “Through this partnership with Evergreen Marine, we’re reimagining how ports and shipping lines can synergize to ensure the seamless flow of trade.”

A Vision for Sustainable Growth

The partnership underscores Evergreen Marine’s focus on environmentally friendly shipping and high-efficiency terminals. “As we expand our operations, partnering with PSA allows us to create a terminal that aligns with our commitment to sustainability and operational excellence,” stated Mr. Y.I. Chang, Chairman of Evergreen Marine.

The new terminal will serve as a vital hub in Evergreen Marine’s network, reinforcing its presence in Asia and enhancing its global operations.

A Commitment to Collaboration

“This joint venture marks a new chapter in our partnership with Evergreen Marine,” added Mr. Nelson Quek, Regional CEO Southeast Asia at PSA International. “Together, we aim to meet the evolving demands of the maritime industry, delivering exceptional value and deepening our collaboration for long-term success.”

The joint venture exemplifies PSA and Evergreen Marine’s dedication to innovation, sustainability, and service excellence, paving the way for a more resilient and interconnected global supply chain.

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China to Launch First Marine Biofuel Export Quotas in 2025 to Support Biodiesel Industry

China plans to issue its first export quotas for marine bunker fuel blended with biodiesel, aiming to bolster domestic biofuel producers affected by European Union anti-dumping tariffs. Industry sources and consultancy JLC report that the government is considering a quota of 500,000 metric tons, likely allocated to state-owned oil companies CNPC, Sinopec, and CNOOC.

The fuel blend, called B24, is composed of 24% biodiesel and 76% low-sulfur fuel oil, distinguishing it from China’s regular low-sulfur fuel oil exports. These quotas are expected to roll out by late 2024 or early 2025.

The initiative addresses challenges faced by China’s biodiesel refiners, whose exports plummeted after the EU imposed steep tariffs in August. Targeting ships on routes between China and the EU, state refiners may leverage carbon credit incentives to promote the adoption of lower-carbon bunker fuels.

The plan also supports China’s Zhoushan port in boosting biofuel sales, aligning with global trends seen at major refueling hubs like Singapore and Rotterdam. Bio-marine fuel demand continues to grow, with Singapore’s 2024 biofuel bunker volumes exceeding 650,000 tons, already surpassing 2023’s total of 520,000 tons.

China’s Ministry of Commerce has yet to comment on the move, but the strategy signals a significant step in fostering a sustainable and competitive marine fuel market while navigating trade challenges.

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IMO Chief Urges Action as Red Sea Attacks by Houthi Forces Disrupt Global Shipping

International Maritime Organization (IMO) Secretary-General Arsenio Dominguez has concluded a diplomatic tour of key Red Sea countries amid escalating maritime threats from Houthi forces. The crisis, which began with the hijacking of the MV Galaxy Leader in November 2023, has seen over a hundred drone and missile attacks on vessels in the area, significantly impacting global trade and seafarer safety. These attacks, reportedly motivated by the ongoing Israel-Hamas conflict, have resulted in four deaths, two sunken ships, and extensive vessel damage, prompting many shipping companies to reroute around the Cape of Good Hope, a costly and time-consuming detour.

Read also: Houthi Attacks Update: East-West Trade Braces for Uptick in Freight Costs in 2024

Dominguez’s diplomatic mission included high-level discussions in Djibouti, Egypt, Oman, Saudi Arabia, and Yemen, where he stressed the urgency of restoring safe navigation in the Red Sea. “The continuous attacks on ships and seafarers in the Red Sea are endangering innocent lives and affecting the entire shipping industry,” he stated, highlighting that international shipping underpins roughly 80% of global trade in goods.

The IMO is exploring ways to support affected nations and uphold the principle of freedom of navigation in the region, which plays a vital role in global maritime trade. “This region has strategic importance and potential for development to support sustainable maritime transport,” Dominguez emphasized.

However, challenges remain as Houthi forces have declared an ongoing blockade against Israeli-affiliated vessels, complicating efforts to stabilize the Red Sea shipping lanes. Yahya Sarea, the Houthi military spokesperson, recently asserted that vessels connected to Israel would remain targets, and alleged that many companies tied to Israel were divesting their assets in response to the attacks.

As the Red Sea crisis continues, Dominguez and the IMO are calling for unified global action to address the escalating threats and ensure safe passage in this critical maritime corridor.

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Global Shipping Faces Turbulence: Chokepoint Disruptions Threaten Trade and Supply Chains

The maritime industry is navigating treacherous waters, as critical shipping chokepoints face unprecedented strain, threatening global trade, food security, and energy supplies. According to the 2024 Review of Maritime Transport by the UN Conference on Trade and Development (UNCTAD), the stability of global supply chains is being undermined by geopolitical tensions, climate change, and regional conflicts.

Read also: Global Shipping’s Headaches – a Drought and Rocket Fire 

While maritime trade grew by 2.4% in 2023, totaling 12.29 billion tons, the outlook for 2024 is fragile, with just 2% growth projected. Disruptions at key chokepoints such as the Panama Canal, Suez Canal, Red Sea, and Black Sea are leading to higher shipping costs, longer transit times, and strained logistics networks—putting recovery efforts at risk.

Chokepoint Disruptions and Rising Costs

The Panama and Suez Canals, vital arteries of global trade, are under immense pressure. By mid-2024, traffic through both had dropped over 50%. The Panama Canal faced low water levels due to drought, while conflict in the Red Sea disrupted transit through the Suez Canal, where tonnage declined by 70%.

As a result, ships have increasingly rerouted around the Cape of Good Hope, with arrivals there surging by 89%. However, this shift carries financial consequences. Container ships carrying 20,000–24,000 TEUs on the Far East-Europe route now incur an extra $400,000 in emissions costs per voyage, due to the EU’s Emissions Trading System (ETS). These diversions are adding to shipping delays and contributing to environmental impacts.

Logistical Bottlenecks and Supply Chain Strain

The diversion of vessels has created congestion at major transshipment hubs, including Singapore and key Mediterranean ports, as rerouted traffic overwhelms port capacity. Global vessel demand has grown by 3%, while container ship demand is up by 12%, intensifying strain across supply chains.

The impacts of these disruptions are being felt most by vulnerable economies such as Small Island Developing States (SIDS) and Least Developed Countries (LDCs), which rely heavily on maritime connectivity for essential imports. If disruptions continue, global consumer prices could rise by 0.6% by 2025, while prices in SIDS may increase by as much as 0.9%.

Climate Change: A Growing Risk

Extreme weather events are becoming more frequent, impacting port operations and further complicating maritime logistics. Chokepoints like the Panama and Suez Canals are especially vulnerable to these disruptions, threatening both operational safety and shipping schedules.

UNCTAD’s report urges the maritime industry to invest in infrastructure and capacity building to mitigate the risks posed by climate change. The sector must also accelerate the shift to low-carbon technologies to align with global decarbonization goals.

Decarbonization and Fraudulent Practices: Key Challenges

Despite commitments made by the International Maritime Organization (IMO) to reduce greenhouse gas emissions, the transition to greener shipping remains slow. In early 2024, only half of new ship orders were for vessels capable of using alternative fuels, while aging ships remain in service due to high demand and rising freight rates.

Another emerging challenge is the rise of fraudulent ship registrations. These so-called “dark fleet” vessels operate outside international regulations, posing risks to safety, pollution control, and seafarer welfare. UNCTAD urges countries to support IMO efforts to crack down on these practices and strengthen maritime enforcement.

Building Resilience for Future Disruptions

To safeguard global trade, UNCTAD’s report recommends several measures:

1. Strengthening infrastructure to ensure ports and shipping routes remain operational under stress.

2. Accelerating fleet renewal with a focus on alternative fuels to meet decarbonization targets.

3. Enhancing maritime connectivity for vulnerable economies, particularly SIDS and LDCs, to keep them integrated into global supply chains.

4. Combating fraudulent ship registrations to uphold international maritime standards.

A Critical Juncture for Global Shipping

The maritime sector is facing a perfect storm of disruptions, with chokepoint bottlenecks, climate change, and geopolitical instability converging to threaten global trade. While modest growth is expected in 2024, the industry’s ability to adapt will shape the future of global supply chains. A coordinated global effort is essential to build resilience, lower emissions, and maintain maritime connectivity, ensuring that shipping remains a cornerstone of the global economy.

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Shipping Industry Faces Tough Choices Under New FuelEU Maritime Regulations

As the implementation of the FuelEU Maritime regulation approaches, shipping companies are grappling with the challenge of meeting stringent carbon intensity reduction targets or facing escalating penalties. Set to take effect on January 1, 2025, the regulation imposes progressively tighter limits on the greenhouse gas (GHG) intensity of energy used on ships, with the requirements becoming stricter every five years.

Read also: Innovative Strategy Reduces Cargo Ship Emissions by 17.3%

The GHG intensity standards apply to all energy consumed during voyages and port calls within the EU, as well as 50% of voyages entering and leaving the EU. To comply, shipping companies must either pay a FuelEU penalty or take steps to reduce their GHG intensity to meet the regulation’s limits. This can be done by using alternative fuels such as biofuels or LNG/LPG, or through pooling, where vessels that exceed their targets can offset those that underperform.

However, Albrecht Grell, Managing Director of Hamburg-based maritime intelligence firm OceanScore, noted that many shipping companies, particularly smaller ones, are opting to pay the penalty rather than explore pooling. He cautioned that this strategy, along with deferring compliance through borrowing that incurs interest, will become increasingly expensive over time.

Currently, the penalty for exceeding GHG intensity targets is €2,400 per tonne of VLSFOe (very-low sulphur fuel oil). This penalty is set to increase by 10% each year for continued non-compliance, reaching €3,360 in 2029, according to OceanScore.

Grell advised companies to consider biofuels and pooling as more cost-effective options to reduce compliance deficits. He emphasized the importance of understanding the market dynamics that influence the availability and cost of pooling slots, as well as the potential to monetize compliance surpluses by sharing them with third-party vessels.

Friederike Hesse, co-founder and Managing Director of maritime carbon solutions platform zero44, added that the most economical approach to compliance will vary by company. Factors such as trading patterns, exposure to the EU, availability and cost of sustainable fuels, and agreements with stakeholders will all play a role. Hesse stressed that optimizing FuelEU compliance will require ongoing effort, with companies needing to track their options and find the best strategy for each compliance period.

As the deadline nears, shipping companies must carefully weigh their options to navigate the new regulations while minimizing costs.

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Maritime Transport Cut Sulfur, but then came the Climate Downside

In January 2020, the International Maritime Organization (IMO) enforced new emissions standards intended to cut global maritime vessel pollution. A major undertaking that had been years in the making, the IMO had pledges from countries across the developed and developing world, rendering the initiative perhaps the greatest collaborative environmental achievement to date.

Read also: Eco-Friendly Logistics: Strategies for Sustainable Shipping Operations

The most commonly used marine fuel at the time was estimated to have approximately 2.7% of sulfur content. The IMO’s objective was to ban those vessels with a sulfur content higher than 0.5%, and over 170 countries enthusiastically agreed.

Yet, a recently published paper in Communications Earth & Environment suggests that the impact of the clean air regulations could very likely be an “inadvertent geoengineering event.” In short, it could have aided in boosting, not lowering, global average temperatures over the past 2 to 3 years. 

The shipping industry has long been under pressure to reduce sulfur emissions. The pollutant is an element of acid rain, which contributes to the acidification of the oceans, harming wildlife and vegetation. Yet, the same pollutant reacts with water vapor to create aerosols that reflect sunlight back into space. These aerosols, at high levels, have a cooling effect, and some researchers are positing that the pre-IMO enforced emissions could have helped mitigate the warming effect. 

Last year’s record-breaking heat was extreme. Most of the world’s scientists cite 2023 as the hottest year on record, and the IMO rule change resulted in an 80% reduction in sulfur dioxide emissions. While much research remains, a decrease in sulfur emissions is just potentially one factor of why 2023 was so hot. The El Nino weather phenomenon caused a spike in global temperatures and the undersea volcanic eruption of Hunga Tonga was a highly unusual event estimated to have had an impact on the warming of the Earth. 

The study is being treated with great caution. The positive health impacts alone from less pollution are undoubtedly improved with a cutback of sulfur. However, should this end up being an “inadvertent geoengineering event,” the ripple effects on the larger environmental movement will be noticeable.