Shipping is hitting the headlines with news that Maersk has ordered eight new flex-fuel vessels that can run on traditional bunker fuel and carbon-neutral methanol. Hyundai Heavy Industries will build the ships that carry 16,000 containers each and deliver them in 2024. Maersk has also included an option for four more vessels in 2025. The new ships will replace older ones rather than add new capacity.
Clean methanol is currently twice as expensive as fossil-based fuel oil. Doubling the fuel price could translate to about a 15 per cent increase in container rates, but Maersk believes that enough of its customers will be willing to pay that extra to ensure carbon-free shipping.
The company intends to produce green methanol for its first vessel in cooperation with REintegrate, a subsidiary of the Danish renewable energy company European Energy. The Danish facility will supply about 10,000 tonnes of carbon-neutral e-methanol, using green hydrogen combined with carbon emissions captured from burning bioenergy such as biomass.
Maersk’s biggest challenge will be to secure enough green methanol for the vessels. If it can’t and continues to power its fleet of ships with fuel oil, nothing will change. The company accepts the challenge while admitting, “We need a significant ramp-up in production. We do feel there has been a lot of chicken and egg. So, we find by going out with this announcement that we can break this cycle.”
Meanwhile, a Norwegian company has created the world’s first zero-emission, autonomous cargo ship. The ship, capable of carrying 103 containers and a top speed of 13 knots, will make its first journey between two Norwegian towns before the end of the year and will be the world’s first fully-electric container ship.
The container-shipping industry is financially well-placed to invest in new ships. Maersk was expected to make around $4.5 billion in 2021 but may now make $14.5 billion. It is not the only shipping company making record profits. Container lines could make up to $100 billion in profits this year, fifteen times typical earnings.
Soaring freight rates are not restricted to containers. Rates in the dry-bulk sector hit 11-year highs last week, with further strength expected. Clarkson predicts that the dry bulk trade will rise 4.2 per cent in 2021 and 1.7 per cent in 2022. Fleet growth is likely to lag the increase in cargoes, with capacity expanding by 3.3 per cent this year and 1.4 per cent next year.
GHG emissions are not just hitting the headlines in shipping; they are also becoming a political hot potato in the upcoming US elections. Democrats are worried that they will lose rural votes in agricultural states like Iowa and Wisconsin if they try to limit methane emissions from the livestock industry.
They are also a political issue in India. The predominantly agricultural northern state of Uttar Pradesh will likely drop legal proceedings against farmers accused of burning crop waste. The ruling Bharatiya Janata Party wants to placate growers ahead of state assembly elections next year.
Politics is also entering the food supply in the UK, where farmers blame the government’s new immigration policies for an acute shortage of truck drivers, fruit and vegetable pickers, and meatpackers. Meat processors have asked the government to allow the sector to use prison labour to make up for the shortage. Britain’s meat processing industry, which is two-thirds staffed by non-UK workers, is currently missing about 14,000 people out of a total of 95,000 usually employed in the sector.
However, the UK government has turned down a request to temporarily ease visa requirements for truck drivers and instead asked the industry to train the domestic workforce. The sector argues that it will take too long and short of 90,000 drivers right now. The labour shortages are already impacting supply with UK McDonald’s restaurants running out of milkshakes.
Bloomberg takes the conversation back to climate change and makes the environmental case for fish farming. It writes that seafood is the only significant source of protein that humanity is still harvesting in the wild and that almost 90 per cent of global fish stocks are exploited or overfished. Farmed fish should surpass the volume of traditional fishing by 2024, and the global aquaculture market could exceed $245 billion by 2027, up from $180 billion today.
Reuters, meanwhile, looks at how climate change prompts coffee growers in Brazil to produce more robusta (known as conilon) and less arabica. Robusta coffee is more heat tolerant than arabica and can be grown at lower altitudes. Conilon yields in Brazil now match Vietnam’s, and roasters are using more robusta in their blends.
Finally, a few stories on technology. Bloomberg writes about electric tractors and the challenges of vertical farming. Wired asks whether AI and robots will transform farming into an ecological utopia or dystopia, and Greenbiz examines the role that Google is playing in regenerative agriculture.
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