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Capital Link 13th Annual Shipping & Marine Services Forum "London Calling - Supercycle Ahead?" Συμπεράσματα Μερος 3

30 Σεπτεμβρίου 2021.

capitalforumlond21PROVIDING CAPITAL TO SHIPPING - THE NEW LANDSCAPE

Banks - Alternative Finance - The Emergence of New Capital Sources and Finance Hubs

 

This panel discussed the current landscape and interaction among key finance provides such as traditional banks, leasing firms, credit funds and other forms of alternative finance. It also addressed the impact of regulations and green shipping as well as the emergence of new regional and international hubs providing capital to shipping.

Συντονιστής: κ. Robert Wilkins, Partner, Chair of Transportation Industry Group - Reed Smith

Ομιλητές:

κ. Joep Gorgels, Global Head of Transportation & Logistics - ABN AMRO Bank

κ. Elias Sakellis, CEO - Australis Maritime

κ. Vassilios Maroulis, Managing Director, EMEA Industry Head, Shipping, Logistics & Offshore - Citibank N.A.

κ. Peter Wessel-Aas, Vice President, Investment Banking - Fearnley Securities AS

κ. Guillaume Bayol, Managing Director & Co-Portfolio Manager - Fleetscape

Οκ. Peter Wessel-Aas, Vice President, Investment Banking - Fearnley Securities AS, τόνισε: “Public markets are indeed open. While the bond market is not a novel source of capital to the shipping industry in general, I would argue that the current strength of the bond market opens the door to public funding for a lager spectrum of ship owners.

Ship owners who would historically not have access will, to a larger extend, be eligible for bond financing. Usual suspects in the high yield market will be able to obtain more attractive financing, and a larger issuer demographic will be able to tap the market for unsecured financing.

Moreover, the introduction of sustainability features unlocks access to pockets of capital otherwise unavailable for shipowners which we believe will have a significant impact in making the bond market an attractive venue for financing.”

HOW GREEN IS GREEN

There are many shades of green in the ship finance market ranging from responsible investments, to sustainable finance and 'pure' green finance. The presentation discussed their similarities and differences and also focused on current trends and recent experiences in the field in relation to actual transactions and documentation used in the market. Connections between these and the wider green initiatives in the shipping industry were also touched upon.

Presentation by:

κα. Dora Mace-Kokota, Partner - Stephenson Harwood

κα. Dora Mace-Kokota, analysed in her presentation the different kinds of loan products offered currently within the green and sustainable shipping finance market. She explored these specifically in the context of the

principles developed by the Loan Market Association in respect of green and sustainable loans. Her presentation also examined in some detail the advantages and disadvantages of such products for owners and financiers as well as the mechanisms through which these are implemented in the loan documentation. She stated that the key questions for the immediate future will be whether there will be a more uniform market and framework for such products, whether smaller and medium outfits will have access to these and how the financing demands in terms of 'zero emissions' vessels will be met in the next 20-30 years.

SPOTLIGHT ON DECARBONIZATION - TECHNOLOGY - SAFETY

1x1 Discussion between:

κα. Karrie Trauth, Head of Shipping - Shell Shipping & Trading                              

κ. Knut Oerbeck-Nilssen, CEO - DNV Maritime

In her discussion with DNV Maritime CEO Knut Ørbeck-Nilssen, Karrie Trauth, Head of Shipping and Maritime at Shell Shipping & Trading, talked about preparing the shipping industry for the future and her commitment to play a leading role in helping decarbonise a sector that is critical to the global economy.

She referred to the five recommendations made in a white paper Shell published with Deloitte last year. It sets out the need for regulatory alignment that could create a level playing field and stimulate customer demand for zero-emission shipping. It urges companies to work together, forming cross sector groups, to accelerate research and development work and pilot projects on low-emission fuels and other solutions.

κα. Trauth emphasised that the industry would benefit from a co-ordinated approach but that the energy transition will move at different paces in different places depending on infrastructure changes, technological rollout and policy incentives.

“We believe that shipping needs to set a clear a pathway to net-zero emissions by 2050 and will be advocating for the IMO to use its 2023 strategy review to set a target of the sector moving to net-zero by 2050,” she said, “For the sector to decarbonise now we believe that it needs to use the lowest carbon fuel solutions now such as LNG, biofuels and gas while developing the zero carbon future such as hydrogen-based fuels incl ammonia and other synfuels.”

Asked about LNG, κα. Trauth discussed the options for LNG to achieve immediate emissions reductions while noting that fuel cells will be a key technology to unlock the use of future fuels. Trauth said efficiencies in combination with LNG will help close the gap to zero. She said Shell sees hydrogen-based fuels as the long-term zero-emission fuels.

Reflecting on the opportunity for companies, within the industry, κα. Trauth observed that decarbonisation will require non-traditional partnerships to shape a competitive market place where customers can come for decarbonisation solutions or lower carbon products and service. She urged the International Maritime Organization on its accelerated ambition to get to net zero by 2050.

She concluded, “At the end of the day, it’s business and so there will be winners and losers. Shell intends to win and to partner with other winners.”

In his discussion with Karrie Trauth, Head of Shipping – Shell Shipping & Trading, DNV Maritime CEO Knut Ørbeck-Nilssen, said that industry interest in decarbonization was overwhelming. “The new DNV

Maritime Forecast to 2050 showed that the next transition would not see the industry switching from one fuel type to another – but that there would be a multitude of different fuel options. However, what we see is that

onboard technologies are ahead of the production of green fuels, and that for many green fuels the infrastructure is not there for adoption at large scale.”

The industry could not afford delay he said, “This makes it so important to use the best option available now – gas as fuel in combination with efficiency measures as a bridging fuel. But the bridge can be very long – 1 or 2 vessel generations, taking us from LNG into biofuels, e-fuels, and onto zero-carbon fuels.”

Flexibility was the solution for the industry in these uncertain times: “Going forward, we will see many different fuels and even different fuels used on a single vessel. This is different from previous fuel transitions. Our key message is to build in fuel flexibility – look at how you can build fuel flexibility into your vessel today,” he said.

But even in the face of this grand challenge, he said that shipping could not compromise on safety, and that new fuels and new technologies are creating a new risk landscape, adding to an already complex operating environment. “It is vital that seafarers have the training and competence to deal with these new risks. Greater connectivity onboard could be both very helpful, but at the same time poses its own challenges. It’s not just about the hardware, but the people,” he emphasized.

Summing up, Knut Ørbeck-Nilssen said: “Decarbonization is not a race, rather in order to achieve the ambitions of our industry and society– it’s all about collaboration.”