In order to meet the sector’s decarbonization goals, the shipping industry will need to spend $3.4 trillion over the next 30 years to replace its entire fleet.
Mr. Martin Stopford, an industry top analyst and Non-Executive President of Clarkson Research Services Limited, made the prediction during Capital Link’s decarbonisation in the shipping forum.
The projected investment demand, according to Stopford, is extremely high and is focused on current ship prices for the next 30 years, although the number is likely to be higher as more complex ships are anticipated in the future.
According to him, “The industry’s cash flow in the past 20-30 years has been driven by the spot market, and the 30-year average is $15,000 a day.
“This means that there is barely enough money to pay for the capital involved,” he said. Stopford believes cooperation with charterers would be key in this process, where charterers would have to take the lead in deciding what type of technology they want to get involved in.
He said that the builders will be in charge of supplying the ships that can deliver, while the owners would be in charge of creating organizations that can deliver.
This year, the shipbuilding industry is expected to produce about 80 million tons of ships, with next year’s deliveries likely being lower. He noted that this represents just 4% of the global fleet.
Stopford estimated that replacing the entire fleet would take 25 years based on current shipbuilding capability.
“There is a slight tendency of treating the existing fleet as complete rubbish, and I believe this is a completely wrong way to look at it,” he said.
Given the preceding point, the maritime world will continue to depend on existing ships for quite some time. Stopford maintains that the current fleet’s advantage is its low capital value, which allows ship owners to exchange their vessels more slowly.
He believes that slowing ships to eight knots is the most drastic way to save carbon today. According to him, depending on the ship’s previous speeds, this could save between 60 and 80 percent of carbon.