Sustainable Shipping: “The Classic Problem of the Chicken and the Egg”

Dominik Englert

At the KLU Symposium “Transitions: Readiness and Challenges in the Shipping Industry” on October 27, Dominik Englert, an economist at the World Bank in Washington, will be part of a panel discussion on sustainability in shipping. What can guests expect to see at the Symposium? Leading up to the event, we spoke with him.

Leading up to the event, Gordon Wilmsmeier, Director of the Hapag-Lloyd Center for Shipping and Global Logistics (CSGL) at KLU, spoke with him.

Check out the full program and register for the the open-public event.

What are the greatest challenges when it comes to the decarbonization of shipping?

Dominik Englert: The greatest challenge is a financial one, and the trillion-dollar question is: Who will foot the bill for the energy transition in shipping? This leads to another question: Who can or should lead the way and be among the first movers? The second challenge has to do with meeting the temperature targets set in the Paris Agreement. This means not just achieving “zero emissions” by 2050 one way or the other, but doing so by following a steep greenhouse gas reduction pathway that limits global warming to 1.5 degrees Celsius.

Where do the greatest opportunities lie?

Englert: In many developing countries, there’s tremendous potential for the production of renewable energy – to put a number on it, this represents an investment opportunity of one to two trillion dollars. At the same time, by decarbonizing, shipping can become a door-opener, and not just for its own sector, but for others like heavy industry or the chemical sector, which also have to decarbonize using similar hydrogen-based fuels. In this way, shipping could even become a crucial catalyst for the global energy transformation.

What needs to happen to spur on the development of alternative fuels?

Englert: At the moment, we’re looking at the classic problem of the chicken and the egg: Progressive shipowners aren’t investing in zero-carbon ships because there still isn’t sufficient fuel supply for these. At the same time, potential investors are reluctant to get involved in infrastructure and zero-carbon fuel production until a “critical mass” of zero-carbon ships have been ordered. This dilemma could be addressed with stringent regulations that either mandate or incentivize using such alternative fuels. In addition, it has to be ensured that these fuels are available worldwide, not just in certain developed regions, so that shippers can be sure to find sufficient zero-carbon bunkering hubs along all their routes. Building up these green fuel supply chains in developing countries and offering ship operators a viable zero-carbon alternative to bunkering heavy fuel oil is one of the key objectives that we are currently pursuing at the World Bank.

Thanks very much, Mr. Englert!

More information:

  • Join Dominik Englert for the panel discussion on “Environmental sustainability – zero emissions in 2050 – realistic pathway or dream?” at the KLU Symposium on October 27. Further panel members will include Lucienne Damm (TUI Cruises GmbH), Dr. Frank Dubielzig (Hapag-Lloyd AG), Dr. Peter Liese (Member of the European Parliament, EVP) and Dr. Elizabeth Lindstad (SINTEF Ocean, Maritime), with Prof. Alan McKinnon (KLU) moderating.
  • You can register online.
  • Full program
  • Hapag-Lloyd Center for Shipping and Global Logistics (CSGL)