CONNECTING shipowners’ money to decarbonisation efforts is key to shipping’s alternative fuel goals, Wärtsilä  marine president Roger Holm said in an interview with Lloyd’s List.

Holm was reacting to a Global Maritime Forum report published last week that said shipping was falling behind its target to have a 5% usage of zero greenhouse gas emission fuels by 2030.

He said that shipping needed to accelerate and to do that incentives to use green fuels must be put in place.

“Money talks and to go green, you also need to stay in business,” Holm said. “Even if you want to go green, if you don’t stay in business, it’s not going to work.”

Holm highlighted that under the EU’s new Emissions Trading System and FuelEU schemes, fossil fuels and green fuels are set to be on a “level playing field” by 2035, as conventional fuels become more expensive through regulation.

This kind of legislative intervention was key to breaking what he called the chicken and egg cycle between green fuel supply and demand, which was also highlighted as a significant barrier to decarbonisation by the GMF report. Shipowners will not commit to creating demand until they are confident of supply, nor will suppliers ramp up projects without the guarantee of offtake.

“I think under EU regulations, you actually have a good predictability on what will happen. And you can then start to plan how to how to do this, because you can’t be too fast in decarbonising, but you can’t be too slow either,” Holm said.

“I think the International Maritime Organization has to play a very significant role here,” he added.

He hopes that the organisation follows the EU’s example and directly linked decarbonisation to fuel costs.

While Holm was hopeful of progress at this week’s MEPC82 and next year’s MEPC83, he acknowledged there was still “a big question mark” over what the IMO would be able to agree.

“But I think it is an absolute must if we want to maintain the target for 2050,” he said, referring to the IMO’s goal for shipping to be net zero by or close to 2050.

The technology to decarbonise on the vessel side already existed, Holm said. Last year 60% of Wärtsilä orders in terms of megawatts were engines capable of running on alternative fuels (including LNG).

But the decision on whether to actually run these dual-fuel engines on alternative fuels is “totally up to both the owners and the fuel availability” and maintained that financial incentives would force owners to go green.

At present though, green fuels are “three to five times more expensive” than conventional ones, Holm said, making them financially unviable.

“The way to do it is like EU has done it, because then you will put the cost of emissions on the fuel,” Holm said.

“You don’t look into the technology itself, but you will put pressure on the whole ecosystem to make sure this transformation happens.

“Because I’m very, very sure that when you get to a level playing field after 2035 in EU, where you actually make more money by running on green fuels versus fossil fuels, the whole system will run itself into that direction,” he said.

“If you don’t then move to green, you will go bankrupt over time”.

Perhaps most interestingly, Holm said Wärtsilä had switched its approach from keeping future engine designs close to its chest, to being open with the industry to encourage shipowners to prepare for future fuels.

“We are trying to take our share of the chicken and egg problem by being very open towards customers in what we have in the pipeline, because then the customers can also plan.

“I would like to see everyone taking their share of this chicken and egg challenge and try to solve it by more collaboration in the total ecosystem, because we need a lot of collaboration in the ecosystem to make this happen, much more than ever before,” he said.

“Of course, we need to be aware that this is going partly to competition as well.

“At the same time, I see a benefit when you have a whole industry moving towards this target. I would be more worried if we would be the only one moving.

“If we can show, together with competition, that that the whole industry is ready to move, then we can accelerate the move as well.”