Speaker 1: Welcome to Coffee Time, a podcast series on markets and
Speaker 1: economies from dBS group Research. I'm Tamar Beck, chief economist
Speaker 1: welcoming to our 88th episode. Pretty Auspicious number. Uh today's
Speaker 1: guest is dr lin liu, who will talk about efforts
Speaker 1: to bring a critical part of the global economy, which
Speaker 1: is international shipping.
Speaker 1: Uh an academic by training Dr Lewis presently on leave
Speaker 1: from Princeton University where she is Theodora D and William H. Walton,
Speaker 1: third professor in engineering in 2017, she co founded and
Speaker 1: Luca Technologies, a startup, developing wireless smart window solutions to
Speaker 1: increasing energy efficiency of buildings and improve occupant comfort.
Speaker 1: Since 2021. She has been here in Singapore shaping and
Speaker 1: leading the Global Center for Maritime decarbonization or GCM D.
Speaker 1: You will hear that acronym several times in this podcast.
Speaker 1: T C M D is a nonprofit set up to
Speaker 1: help accelerate international shipping transition to a low and zero
Speaker 1: carbon future. We've done quite a few podcasts on climate change,
Speaker 1: but this one is very sectoral, very specific and I'm
Speaker 1: really excited about it. Dr lin liu. Welcome to Covid Time.
Speaker 2: Hi, thanks for having me.
Speaker 1: It's a pleasure to have you tell us about GCM D.
Speaker 2: Yeah, I prefer to go with the acronym G cmd
Speaker 2: because the full name is indeed a mouthful. Um so
Speaker 2: as you said, G cmd is a nonprofit, we're about
Speaker 2: 14 months old. We were set up at the recommendation
Speaker 2: of this international advisory panel for maritime decarbonization that was
Speaker 2: convened here in Singapore.
Speaker 2: Um that that had basically chief executives of shipping companies,
Speaker 2: battery companies, etcetera. To think about what we can do
Speaker 2: here to really um move the sector forward. And so
Speaker 2: the I. P. Met over covid and recommended the setting
Speaker 2: up of um a coordinating body uh to look at
Speaker 2: action oriented things that we can do to accelerate decarbonization
Speaker 2: for international shipping.
Speaker 2: Um This recommendation was put forward um in april last
Speaker 2: year and that was accepted. Uh Six industry partners came
Speaker 2: forward and said they would start, so they are our
Speaker 2: founding partners essentially and they provided $10 million apiece. And
Speaker 2: then Singapore's Maritime and Port Authority came in and match
Speaker 2: that with $60 million and that formed the first tranche
Speaker 2: of our fund
Speaker 2: for G C M G. So G CMd sits right
Speaker 2: at the private and public interface. Um and really our
Speaker 2: mission is to help the international shipping sector eliminate g
Speaker 2: emissions and we do this by doing three following things.
Speaker 2: One is to shape standards for future fuels, uh the
Speaker 2: other is to finance first of a kind
Speaker 2: projects and then the third would be to pilot low
Speaker 2: carbon solutions uh in real world operating conditions. And the
Speaker 2: reason we can do this is because um you know,
Speaker 2: we are a group of engineers and scientists, we have
Speaker 2: domain and technical expertise, we can scope projects, we have
Speaker 2: the flexible funding that our founders have provided us with
Speaker 2: and subsequent partners have provided us with.
Speaker 2: We are an N. G. O. So we're neutral convener
Speaker 2: so we can bring the stakeholders across the supply chain.
Speaker 2: Um and even beyond the ecosystem together to work on
Speaker 2: these pilots and then finally with mph as our partner
Speaker 2: we have access to regulators and so we can begin
Speaker 2: to think about putting sandboxes together so that we can
Speaker 2: actually do these meaningful pilots. So that's in a nutshell.
Speaker 2: Woogie cmd is
Speaker 2: oh
Speaker 1: this is so exciting. Um the ability to have that
Speaker 1: kind of flexibility and be in a coordinating role. Um
Speaker 1: and that sounds like a role of a lifetime Lynn.
Speaker 1: Um but let me step back for a second and
Speaker 1: ask the most obvious question, which is why do we
Speaker 1: need to solve for maritime decarbonization and how large are
Speaker 1: the States?
Speaker 2: Ah that's a really good question. I mean um so
Speaker 2: 14 months ago I knew nothing about shipping, right? And
Speaker 2: so to me shipping was um sort of you know
Speaker 2: out of out of sight out of mind and I'm
Speaker 2: sure that's the case for lots of people. We think
Speaker 2: about shipping when we think about O. R.
Speaker 2: Perhaps we think about shipping when we think about our
Speaker 2: Amazon boxes coming outdoors. Um but shipping is really integral
Speaker 2: to the global supply chain. So tomorrow do you know
Speaker 2: that shipping is responsible for 90% of the global trade?
Speaker 2: So it touches 90% of the global trade, right?
Speaker 2: Um and it's responsible for 3% of global carbon emissions.
Speaker 2: Um and just to put things in perspective, 3% may
Speaker 2: not sound like a lot, but 3% makes it um
Speaker 2: a the sixth largest emitter, if you will from a
Speaker 2: country perspective, um shipping is regulated by a single entity
Speaker 2: called the International Maritime Organization or the IMF.
Speaker 2: Um and so shipping submissions is actually counted um separate
Speaker 2: from individual countries carbon inventory. Right? So it has its
Speaker 2: own carbon emissions. That's why I can tell you it's 3%
Speaker 2: and that 3% is comparable to that of aviation. So
Speaker 2: why is this such big stakes? Well, because it's such
Speaker 2: an integral part of the global supply chain,
Speaker 2: essentially our scope one emissions is always gonna be somebody
Speaker 2: else's scope three emissions. So the cargo owners, the consumers,
Speaker 2: they can't dick carbonized if we don't dick carbonized. So
Speaker 2: that's how linked we are in in in terms of
Speaker 2: the global supply chain. Right? So it's really important for
Speaker 2: us to think about decarbonization shipping so that the whole
Speaker 2: world can be carbon eyes.
Speaker 1: Yeah. So speaking of International Maritime Organization, so I understand,
Speaker 1: you know, there are these certain targets that they have said.
Speaker 1: So tell us a bit about those targets and your
Speaker 1: overall thoughts, we're gonna go into specific label your broad
Speaker 1: based thoughts on how do we go about addressing these targets.
Speaker 2: Yeah. So, um so I M. O. Has set targets
Speaker 2: for decarbonization. International shipping and the target is to reduce
Speaker 2: carbon intensity by 40% by 2030 relative to 2008 levels,
Speaker 2: and then to reduce total g emissions by 50% by 2050. Now,
Speaker 2: you'll notice that these targets aren't exactly pairs aligned because
Speaker 2: power
Speaker 2: um targets call for net zero by 2015. Nonetheless, these
Speaker 2: are very ambitious target for shipping because in order for
Speaker 2: us to get to these kinds of targets, um basically
Speaker 2: we're looking at low carbon and zero carbon fuels that
Speaker 2: are currently not available today. Okay. Um so that's that's
Speaker 2: just the target side of things. So how how am
Speaker 2: I looking at this? Well, I think um
Speaker 2: you know, um shipping went from using wind as propulsion
Speaker 2: to coal to generate steam to oil. And now we're
Speaker 2: looking at sort of the fourth incarnation of what we
Speaker 2: should be using as fuels, right?
Speaker 2: Um just the industrial revolution alone, if you look at
Speaker 2: sort of um what um really helped um economies develop,
Speaker 2: that uh industrial revolution took place, and that energy system
Speaker 2: that was built took more than a century. Um and
Speaker 2: now we're talking about a completely different energy infrastructure and
Speaker 2: we'd like to build this in 30 years.
Speaker 2: Um That's a really, really tall task. It's a challenging task.
Speaker 2: Um It's saying this is not meant to cripple one,
Speaker 2: but it's just to put things into perspective, right, in
Speaker 2: terms of how long it took for us to kind
Speaker 2: of embrace oil and gas, and now we're saying, okay,
Speaker 2: forget about oil and gas. Let's think about renewables. And
Speaker 2: by the way, let's do this in 30 years. Um
Speaker 2: so in order to think about this energy transition, I
Speaker 2: think we need to chunk it up into pieces.
Speaker 2: We need to think about near term solutions. We need
Speaker 2: to think about medium term solutions and then we need
Speaker 2: to think about long term solutions. It's easy to just
Speaker 2: kind of look at the long term solutions because there's
Speaker 2: no question where we'd like to end up, but it's
Speaker 2: not obvious how to get there right. Like I said
Speaker 2: for shipping, the long term solution is really the zero
Speaker 2: carbon fuels, the green pneumonias, green methanol, etcetera that's needed
Speaker 2: um for us to to to be able to sail
Speaker 2: without admitting G. Um
Speaker 2: so, so I think what we need to do is
Speaker 2: to keep an eye on the ball on the long
Speaker 2: term solution and work hard on that. But in the meantime,
Speaker 2: do what we can with what we have now to
Speaker 2: start bending the curve. And so what it means is
Speaker 2: we need to simultaneously work on near term solutions. So
Speaker 2: that include a
Speaker 2: but it includes technologies that can reduce fuel consumption, like,
Speaker 2: you know, wind sails, like whole cleaning robots, like air lubrication,
Speaker 2: but also look at um low carbon fuels that are
Speaker 2: available today. So biofuels perhaps even liquefied natural gas now
Speaker 2: they aren't without their set of issues, but I think
Speaker 2: done right and used properly, they can reduce our carbon
Speaker 2: footprint in the meantime
Speaker 2: and then the in the medium term, I think we
Speaker 2: need to think about things like shipboard carbon capture um
Speaker 2: carbon capture provides the runway for green fuels to scale
Speaker 2: for green fuel costs to come down. And so we
Speaker 2: need to think about mid term solutions as well. So
Speaker 2: basically to chunk up the energy transition and think about
Speaker 2: solution in three buckets um most importantly, I think um
Speaker 2: you know, we can't do this alone, right? Um um
Speaker 2: just talking about fuels, right? I think if you think
Speaker 2: about shipping fuels is really outside the sector, so we
Speaker 2: need to think about um sectorial collaboration and partnership, but
Speaker 2: we also more importantly need to think about cross sector
Speaker 2: collaboration and partnerships as well in order to really uh
Speaker 2: get moving and move the needle and
Speaker 2: and I think finally we need the carrot and the stick.
Speaker 2: So having a price on carbon certainly will help. Um
Speaker 2: and and also having regulations and having these targets so
Speaker 2: that we know where we're headed and that you know,
Speaker 2: these policies are enforced. So all those things need to
Speaker 2: come into play if we're going to get to those
Speaker 2: targets that we just talked about.
Speaker 1: Right, okay, we are gonna unpack some of these because
Speaker 1: some of the stuff you said, we can't just, you know,
Speaker 1: just use the word you have to explain to us
Speaker 1: in greater detail. So um first technologies than solutions and
Speaker 1: then I want to talk about carbon capture. Alright, so
Speaker 1: starting with current and frontier technologies, you sort of touched
Speaker 1: upon them and I'm really tantalized by them. So what
Speaker 1: is a little greater detail about some of the technologies
Speaker 1: that you think are promising now and then the frontier
Speaker 1: stuff that you know
Speaker 1: almost sounds like science fiction, but we'd like it to happen.
Speaker 2: Well let's not call it science
Speaker 1: fiction, It
Speaker 2: happen, it's a matter of time, it will happen. So
Speaker 2: we don't want to call that science fiction. Right? So
Speaker 2: we can talk about the near term solutions first. I
Speaker 2: mean near term solutions are things that are currently available
Speaker 2: today that when install you can shave emissions by, I
Speaker 2: don't know anywhere from 1 to 10%. Okay, it doesn't
Speaker 2: get you all the way there, but
Speaker 2: you can start shaving emissions. So those are things like
Speaker 2: wind sales that you can put on board. Um in
Speaker 2: fact just a couple days ago I saw, so my
Speaker 2: office is at, so I look I I overlooked the
Speaker 2: Panjang terminal ports. Um and I saw one of our partnership,
Speaker 2: so this is an ocean network express container ship that
Speaker 2: had this white thing at its bow, so at the
Speaker 2: front of the ship and I couldn't quite figure out
Speaker 2: what it was. So I
Speaker 2: Ask your friends at, oh any and they basically said
Speaker 2: Oh it's a wind deflector and so I looked it
Speaker 2: up and it turns out that this wind deflector is
Speaker 2: essentially like a visor on trucks or even on motorcycles.
Speaker 2: And it basically reduces drag and by reducing drag as
Speaker 2: it sails, you can reduce fuel consumption and it reduces
Speaker 2: fuel consumption by about 2%. Right? So these are the
Speaker 2: kinds of things one can do in the interim.
Speaker 1: This was a large container ship.
Speaker 1: Yeah,
Speaker 2: yeah, yeah, yeah. So, so these are the kinds of
Speaker 2: things one can do right? Um there are operational measures
Speaker 2: one can also do. So for example, this idea of
Speaker 2: just in time. So basically you can sail more slowly
Speaker 2: and when you sail more slowly, you use less fuel
Speaker 2: so that you get to the ports just in time
Speaker 2: as opposed to going fast and then getting to the
Speaker 2: ports and then having to wait at the court for
Speaker 2: a berth space or whatnot. Right? So these are the
Speaker 2: kinds of things one can do again. It shapes um
Speaker 2: fuel consumption and so it nets out carbon emissions by
Speaker 2: between 1 to 10% depending on what we're talking about
Speaker 2: in terms of fuel. Uh current fuels, low carbon fuels
Speaker 2: are available are things like biofuels. Now, biofuels are not
Speaker 2: at scale. So we understand that, but you know, if
Speaker 2: you can deploy some of it, you can reduce your
Speaker 2: carbon footprint. So the concept of drop in um is important.
Speaker 2: So that's the idea of taking some
Speaker 2: biofuels and dropping it into marine fuel so that you
Speaker 2: can reduce your carbon footprint some now of course it's
Speaker 2: important to know where your biofuel comes from because its
Speaker 2: origination um would affect its carbon footprint reduction. Right? And
Speaker 2: then it's important to know how much you have in
Speaker 2: there so that you can properly calculate your g emissions abatement.
Speaker 2: Um you can use liquefied natural gas um provided that
Speaker 2: there's no methane slip upstream, provided you're not leaking methane
Speaker 2: because methane is an even more potent greenhouse gas um
Speaker 2: you can reduce carbon emissions by about 20%. So these
Speaker 2: are things that we need to think about. I don't
Speaker 2: think we should a priority cross anything out at this
Speaker 2: moment because we need to do whatever we can with
Speaker 2: whatever we have now
Speaker 2: to really bend the curve on carbon emissions. So these
Speaker 2: are the kinds of things we can do sort of now,
Speaker 1: just a second on the biofuel one, is that concept
Speaker 1: or is it actually happening in the world?
Speaker 2: It's actually happening. So I mean there are there have
Speaker 2: been lots of trials that have been done and you
Speaker 2: can commercially purchase biofuels, there's a green fuel premium associated
Speaker 2: with using biofuels and so then you need to justify
Speaker 2: this green fuel
Speaker 2: premium or you need your customers to be able to
Speaker 2: pay for the green fuel premium. So in fact what
Speaker 2: we've done um earlier in the years, we've spoken to
Speaker 2: our stakeholders, this is typical of how we scope our pilots.
Speaker 2: So we spoke to about 200 stakeholders across the supply
Speaker 2: chain and we asked them, why aren't you using biofuels?
Speaker 2: Biofuels are available today? Why aren't you using more biofuels?
Speaker 2: And repeatedly, the pain point that has come up is, well,
Speaker 2: the supply chain is actually quite
Speaker 2: opaque. So we don't quite know what we're getting, we
Speaker 2: don't know what we're paying for. So what we've done
Speaker 2: is we've basically scoped a pilot with 13 vessels bunkering,
Speaker 2: meaning refueling at three different ports on three different continents.
Speaker 2: So Singapore Rotterdam and Houston with different kinds of biofuels
Speaker 2: with the goal of bolstering the supply chain integrity. So
Speaker 2: we're gonna use a tracer technology, we're gonna go all
Speaker 2: the way up stream
Speaker 2: to the biofuel producer and we're gonna put that into
Speaker 2: the biofuel, it's a tag and flag so you know
Speaker 2: where it originates from. So you know, its carbon footprint
Speaker 2: at the beginning and then you follow it down the
Speaker 2: supply chain. And so then you can have assurance on
Speaker 2: the quality on the quantity on the abatement potential and
Speaker 2: that should give confidence to the purchaser um to justice
Speaker 2: by the green fuel premium that 11 is purchasing, Right? So,
Speaker 2: so that's sort of the idea to bolster the integrity
Speaker 2: of the supply chain and we're doing this for biofuels
Speaker 2: for now because biofuels are, is available today, but looking
Speaker 2: forward when green fuels become available, they're not going to
Speaker 2: be available at scale immediately. So again, this drop in
Speaker 2: concept of mixing green with gray is going to be important.
Speaker 2: And again, there you want to know how much of
Speaker 2: the green is.
Speaker 2: They're the quality of the green, the carbon footprint of
Speaker 2: the green fuel um so that you can justify the
Speaker 2: green fuel premium. So we think this framework is going
Speaker 2: to be extensible to future green fuels as well.
Speaker 1: That's really interesting. So now on the lng part you
Speaker 1: talked about the risk of methane leakage and so on.
Speaker 1: So walk us through a little bit about the potential
Speaker 1: actual practice and what kind of solutions do you have
Speaker 1: in mind to deal with the leakage issue?
Speaker 2: Well, I mean, I think um so the leakage, of
Speaker 2: course the engine um leakages something within the sector and
Speaker 2: that's something that engine manufacturers are working hard to address.
Speaker 2: And in fact I think um done right. Um um
Speaker 2: the engines actually have very very little slip or leaks
Speaker 2: and so the the large portion of the leeks actually
Speaker 2: happened upstream right at the wellhead etcetera etcetera. Um
Speaker 2: so there, I think you need constant monitoring technologies to
Speaker 2: know that you're not leaking methane um and and I
Speaker 2: know there are satellite companies etcetera that are looking at this. Again,
Speaker 2: this is out of this is out of our sectorial scope.
Speaker 2: So um we haven't kept track too much except to
Speaker 2: say that it's important um for upstream to manage the
Speaker 2: leak and manage the slip along the way.
Speaker 1: Very interesting. Okay, so I'm not going to use the
Speaker 1: word science fiction anymore. Frontier technology. So these are the
Speaker 1: intermediate solutions. Where do you see the most exciting? The
Speaker 1: biggest potential on the frontier side is
Speaker 2: Yeah. So, I mean, so these would be the zero
Speaker 2: carbon fuels. Right. And and so these would be um,
Speaker 2: they're also called E fuels because E stands for, you know,
Speaker 2: from electrons. And so the the implications, you have enough
Speaker 2: renewable electrons to generate green hydrogen and use that green
Speaker 2: hydrogen as a feedstock to produce either ammonia. So that's
Speaker 2: called the green pneumonia
Speaker 2: or e methanol, ethanol has one added step of complexity
Speaker 2: in its production in that methanol still has a carbon.
Speaker 2: So in order for the methanol to be zero carbon,
Speaker 2: you need either a biogenic source of captured carbon or
Speaker 2: you need direct air captured carbon to make that methanol
Speaker 2: in order for the methanol to be zero carbon. Okay,
Speaker 2: um or it could be any kind of synthetic fuel,
Speaker 2: like a synthetic diesel etcetera, etcetera. So the idea is
Speaker 2: it originates from renewable electrons. So those are the fuels
Speaker 2: of the future. And those are the fuels that would um,
Speaker 2: in the long run allow shipping to completely de carbonized.
Speaker 2: But these fuels aren't available, like, I mean take ammonia
Speaker 2: for for for a second.
Speaker 2: Um, there's very little green ammonia to be to be
Speaker 2: spoken off today. Right. Um and so so we need
Speaker 2: time for the infrastructure to scale. We need time to
Speaker 2: build up that supply chain. We need time for the
Speaker 2: production to scale up so that these fuels are available
Speaker 2: um to the shipping community. But I mean,
Speaker 2: there are lots of end uses for ammonia. I mean
Speaker 2: like fertilizer to Right? And so um yeah, so, so
Speaker 2: so I think um time we need time. And so
Speaker 2: that's why in the interim one needs to think about
Speaker 2: the near term solution as well as the mid term solution,
Speaker 2: which is carbon capture, which I understand will come back
Speaker 2: and talk about in a little bit.
Speaker 1: You wanted to go right there? Yes, I wanna I've
Speaker 1: heard you in other forum talk about carbon capture and
Speaker 1: I've heard some challenges to the notion of carbon capture
Speaker 1: as well. So I went up and read a little bit.
Speaker 1: So there are certain climate activists who argue that, you know,
Speaker 1: carbon capture is expensive. It's energy intensive. It's risky to
Speaker 1: store and risky to dispose um walk us through the
Speaker 1: potential as well as the risks around carbon capture.
Speaker 2: I mean,
Speaker 2: the short answer is what you said is all true.
Speaker 2: But then again,
Speaker 2: what technology doesn't have a drawback, right? I mean, even
Speaker 2: the fossil fuel that we use today has a major drawback.
Speaker 2: And that's uh that's that's it's used basically has caused
Speaker 2: irreparable damage to our environment and yet we use it. Right.
Speaker 2: I mean, so I think we need to go in
Speaker 2: with
Speaker 2: eyes wide open, understand the pros and cons and then
Speaker 2: try to accentuate the pros and then eliminate or mitigate
Speaker 2: the cons. Right? And so so I think that's how
Speaker 2: I think about all technologies and carbon capture and sequestration
Speaker 2: in particular.
Speaker 2: So the idea of carbon capture is um you're going
Speaker 2: to take um C. 02 emissions out. Um And so
Speaker 2: there's point source carbon capture and that's basically carbon capture
Speaker 2: of flue gasses. Um um and so they're the sio
Speaker 2: two is is more concentrated because it comes from flue gas,
Speaker 2: whether it's, you know, a power plant or you know,
Speaker 2: a cement
Speaker 2: plan or a steel plant. So this is on land,
Speaker 2: let's talk about on land first. Um and um while
Speaker 2: the technology um overall is still sort of in the
Speaker 2: demonstration stage, these point source carbon capture technologies would be
Speaker 2: the most mature amongst them. And I think, you know,
Speaker 2: I mean depending on which report you need, it's about
Speaker 2: $100 a ton for you to break even okay for
Speaker 2: such technology. So yes, it's expensive.
Speaker 2: Um the other technology that's sort of not as far
Speaker 2: along is something called direct air capture and that's you'd
Speaker 2: have to capture carbon and and basically separate carbon dioxide
Speaker 2: out from atmosphere. And because it's less concentrated, it's just
Speaker 2: gonna be more energy intensive and it's just gonna cost
Speaker 2: more And they're, the cost is between I mean I've
Speaker 2: heard numbers between $250 a ton to upward $1000 a ton. Okay.
Speaker 2: Um um For shipping we're thinking about carbon capture on
Speaker 2: ships because you know as you burn fuels you're generating
Speaker 2: carbon dioxide and it comes out of the funnel if
Speaker 2: there's an opportunity to capture that carbon dioxide um then
Speaker 2: you're really releasing less into the atmosphere.
Speaker 2: Um We understand that there's no economies of scale. I
Speaker 2: mean essentially we're putting a small chemical factory on individual
Speaker 2: ships right? Nonetheless as long as we're thinking about sectorial
Speaker 2: emissions and we want to reduce sectorial emissions. This is
Speaker 2: something I think shipping needs to think about. Um So
Speaker 2: um
Speaker 2: um what are what what is involved in the process?
Speaker 2: Well it involves capturing carbon dioxide first and then once
Speaker 2: you've captured that C. 02 you need to store it
Speaker 2: on board ships. So you need to liquefy it and
Speaker 2: then store it on board shifts and then you need
Speaker 2: to get rid of it. Um And so there is
Speaker 2: a reverse bunkering process or an offloading process that one
Speaker 2: needs to think about and then one needs to think
Speaker 2: about off takers, what do you do with that carbon
Speaker 2: dioxide
Speaker 2: once you've captured and you've offloaded it. The last thing
Speaker 2: you want to do is to release it back into
Speaker 2: the atmosphere. And so we think this is sufficiently interesting
Speaker 2: and important to the sector that we've actually two weeks
Speaker 2: ago just launched another pilot um looking at ship world
Speaker 2: carbon capture, and here this is going to be the
Speaker 2: largest carbon capture a pilot to date. It adds
Speaker 2: Scale because we want to do everything to the extent
Speaker 2: possible um under real world conditions, under commercial and operational conditions.
Speaker 2: Um so we've identified standard bulks um medium range tanker,
Speaker 2: and we've identified the medium range tanker because um similar
Speaker 2: sized vessels contribute about 17% of shipping emissions. So it's
Speaker 2: a big sector that we can influence if we can
Speaker 2: demonstrate this technology to be done correctly.
Speaker 2: And so the idea is to capture carbon dioxide at
Speaker 2: a 30% capture rate on this medium range tanker um
Speaker 2: over 500 hours of operations. And then to liquefy it
Speaker 2: on board. So there's a lot of energy demand associated
Speaker 2: with liquefying it. And so the
Speaker 2: part of the pilot is to address the energy demand
Speaker 2: side of things. Um And so we're looking at waste
Speaker 2: heat um we're looking at d tuning the engine perhaps
Speaker 2: to generate a little more waste heat, so that net net,
Speaker 2: you know, while the engine is suboptimal, maybe net net
Speaker 2: when you consider the energy system on the vessel itself,
Speaker 2: that it would be more productive use of waste heat
Speaker 2: to use the waste heat to run the scrubber for
Speaker 2: carbon capture
Speaker 2: and then um and then we need to demonstrate offloading
Speaker 2: that carbon dioxide. Um
Speaker 2: and then and then we've identified an off taker to
Speaker 2: take that carbon dioxide. So it's an end to end
Speaker 2: pilot um from capture to um to in this case
Speaker 2: it's a utilization as opposed to storage. Um but I
Speaker 2: don't want to poo poo. The challenges beyond beyond capture
Speaker 2: and storage. Um I think the challenges that you had
Speaker 2: referred to um when you hear about the activist talk,
Speaker 2: it's about storage and disposal, right? And so sequestration is
Speaker 2: really important
Speaker 2: and um as long as carbon capture is going to
Speaker 2: be part of the portfolio of solutions, one really needs
Speaker 2: to think about trans boundary handling of C. 02 because
Speaker 2: where you collect, even on land where you collect is
Speaker 2: not necessarily going to be where you store simply because
Speaker 2: the reservoirs aren't there? Um So one needs to think
Speaker 2: about trans boundary issues. And currently trans boundary issues are
Speaker 2: very challenging because who wants to take
Speaker 2: your weight, Nobody really wants to take. There are risks
Speaker 2: and liability and loss and damages that are associated with
Speaker 2: um with taking somebody else's C. 02, right? So an
Speaker 2: international framework needs to be in place to be able
Speaker 2: to help move this along. Um But I take I
Speaker 2: take inspiration and I'm encouraged by a couple of commercial
Speaker 2: contracts that have been announced. So there is a commercial
Speaker 2: contract between
Speaker 2: uh Norway and the Netherlands where it's going to be
Speaker 2: captured in one country and it's sequestered in another country
Speaker 2: and this commercial contract is backed by the relevant ministries
Speaker 2: of both countries. There's another commercial contract between Denmark and Belgium.
Speaker 2: So I mean I think we need to look at
Speaker 2: these kinds of examples and learn from these kinds of
Speaker 2: examples and see how we can extend this on a
Speaker 2: global basis so that you can actually capture in one
Speaker 2: region and then store in another region. Right.
Speaker 1: Very interesting. Lynn can you help me sort of visualize
Speaker 1: the process? So there's a tanker like the way you
Speaker 1: made me help me visualize the drag sail in the
Speaker 1: tanker that you saw in. So there are these big
Speaker 1: funnels and a big maritime
Speaker 1: vessel and there will be little filters in front of
Speaker 1: the nozzle of the
Speaker 2: no no no. So so there will be funnels and
Speaker 2: then basically the the emissions are then channeled into
Speaker 2: another scrubber. And this is essentially a small chemical factory.
Speaker 2: It has a mean solution. So it's a basic solution
Speaker 2: and when the basic solution meets carbon dioxide which is
Speaker 2: acidic nature, it's going to absorb the carbon dioxide into
Speaker 2: the amine solution. And so then now you have a
Speaker 2: solution amine solution that has the carbon dioxide in it,
Speaker 2: it then has to go somewhere else where it gets
Speaker 2: really
Speaker 2: and this separation is very energy intensive. And then once
Speaker 2: it's separated, the amine solution is recycled and it can
Speaker 2: capture more carbon dioxide. The captured carbon dioxide is isolated
Speaker 2: and then it can be either liquefied into C. 02
Speaker 2: tanks or there are technologies that are being explored to
Speaker 2: actually um solidify it into calcium carbonate for example, then
Speaker 2: it's easier to transport. Um
Speaker 2: So basically it's a recycled loop of solution that absorbs
Speaker 2: on the one end and then D's orbs the C.
Speaker 2: 02 on the other side, if you will.
Speaker 1: Sure, and tankers are large. So I'm assuming space is
Speaker 1: not going to be a huge issue, even if we
Speaker 1: were to set up these little chemical factories on top.
Speaker 2: Well to the contrary, space is always going to be
Speaker 2: an issue. So in fact, I am. So this tanker
Speaker 2: that we've identified,
Speaker 2: it's a standard imperil what happened to be bunkering in
Speaker 2: the waters of Singapore. So we had a chance and
Speaker 2: so we boarded it to look at where we would
Speaker 2: put the C. 02 tank because we um you know,
Speaker 2: we're in the engineering design phase right now. But preliminarily
Speaker 2: I think we've identified that we need to 300 cubic
Speaker 2: meter C. 02 tanks to hold the C. 02 because
Speaker 2: for every ton of fuel you burn you generate three
Speaker 2: tons of C. 02.
Speaker 2: Um So there's a lot of C. 02 that needs
Speaker 2: to be stored onboard. And so we were looking for
Speaker 2: space to store this and we've identified sort of space
Speaker 2: to be able to store this and and part of
Speaker 2: um I mean, the tanker, so so the different ships
Speaker 2: have different space constraints. Right? I mean, so tankers still
Speaker 2: have deck space where you can put tanks, but a
Speaker 2: container ship, for example, does not have deck space. And
Speaker 2: so one would have to think hard about where you
Speaker 2: would put the tank, right? Um so I think different
Speaker 2: segments
Speaker 2: are going to have different challenges and therefore different solutions.
Speaker 2: So shipping is very interesting in that way, because it's
Speaker 2: very heterogeneous and so the solutions by nature is going
Speaker 2: to be very heterogeneous as well, you
Speaker 1: know, I'm just hoping and praying that among the various
Speaker 1: listeners of this podcast, there are some budding engineers out
Speaker 1: there who will be sort of riveted and inspired by
Speaker 1: all the unsolved problems in this industry and we want
Speaker 1: to put their minds to it because this is getting
Speaker 1: me very excited for. Sure.
Speaker 1: Yeah,
Speaker 2: I mean, I'm excited to, you know, I mean, maybe
Speaker 2: I shouldn't say this, but I will anyway, I feel
Speaker 2: like I'm I'm I'm using more of what I learned
Speaker 2: as a chemical engineer now than I have when I
Speaker 2: when I when I was teaching. Um because when I
Speaker 2: was teaching and doing research, I was very focused on.
Speaker 2: Um and and my team is still currently working at Princeton, right?
Speaker 2: We we developed solar cells and so we're very focused
Speaker 2: on specific fundamental questions that we're trying to answer. And
Speaker 2: so um um it's it's not these engineering principles per se. Right?
Speaker 2: And so so it's sort of the kinds of things
Speaker 2: I learned as an undergrad that I'm applying um to
Speaker 2: to the kinds of problems that I'm seeing today in shipping.
Speaker 1: Okay, so since you mentioned solar cells and your own research,
Speaker 1: I have to go on a tangent and ask you,
Speaker 1: why don't we see solar cells on top of ships?
Speaker 2: Uh Well, I mean, I think you can, and in fact,
Speaker 2: um there was a demonstration ship called The Energy Observer
Speaker 2: um that was here that docked here and it's basically
Speaker 2: a catamaran
Speaker 2: um that is zero carbon. Right? So it's got solar panels,
Speaker 2: it's got wind sails, it's got basically an electrolyzer that
Speaker 2: produces hydrogen for at night when the wind doesn't blow in,
Speaker 2: the solar panel can't generate
Speaker 1: electricity.
Speaker 2: Um it's a catamaran, but you know, it's it's for experiments.
Speaker 2: Um and for demonstration that you can actually sail without
Speaker 2: without
Speaker 2: without without fossil fuels. That said, I mean, that's a
Speaker 2: small catamaran. Right? And so for these deep deep sea
Speaker 2: going ships, it's it's just very challenging. You may be
Speaker 2: able to put solar panels to provide some auxiliary power.
Speaker 2: The question is always going to be the trade off, right,
Speaker 2: what space? And so
Speaker 2: surface area are you sacrificing and how much power are
Speaker 2: you generating? And so when you do that equation, I
Speaker 2: think um frequently you'll find that it doesn't quite make
Speaker 2: sense or shipping for these big ships to think about
Speaker 2: solar panels. Um
Speaker 1: I wanna switch the discussion a bit toward
Speaker 1: the taxes and levies around carbon. So what are your
Speaker 1: thoughts on carbon taxes? Especially in Singapore is a big issue.
Speaker 1: You know, recent budgets have talked about progressively raising carbon
Speaker 1: taxes in this country. We're discussing issues related to border
Speaker 1: adjustment tax coming out of european union. Um so in
Speaker 1: the context of maritime and in general, where do you
Speaker 1: stand on carbon taxes?
Speaker 2: Yeah. So, um at the so I should say at
Speaker 2: the outset that, you know, G Cmd were not a
Speaker 2: policy think tank. Right? And we we try, I mean,
Speaker 2: um so we are technologists, so we we try to
Speaker 2: look at solutions that said, I mean, I think it's really, really,
Speaker 2: really and I'll add two more really, really, really important
Speaker 2: to have a price on carbon. Um
Speaker 2: and and and I think the specific market based measures
Speaker 2: with which we apply a price on carbon um were
Speaker 2: um sort of we have less of an opinion about
Speaker 2: if you will, I think what we have an opinion
Speaker 2: about is that it needs to be fair.
Speaker 2: Okay. And I think um shipping has a tremendous opportunity
Speaker 2: in this regard. Um so I join shipping because, you know,
Speaker 2: shipping is a global industry and so it's regulated by
Speaker 2: a single body, which means that if we can agree
Speaker 2: on a single market based measure or if we can
Speaker 2: agree on a set of market based measures, it can
Speaker 2: be applied through
Speaker 2: globally. So then this doesn't create any um any distortion
Speaker 2: to the market. It doesn't create any unlevel playing field, right?
Speaker 2: As opposed to electrification. And the power sector where I
Speaker 2: came from, when I was looking at energy systems there,
Speaker 2: it's very fragmented. Um forget about talking across state boundaries.
Speaker 2: I mean, even regionally, you have
Speaker 2: different um different commissioners that are working and different regulators.
Speaker 2: And so they're to pass a carbon policy becomes a
Speaker 2: little more challenging right here. I think there's a tremendous
Speaker 2: opportunity because shipping is a global industry. So we should
Speaker 2: definitely think about um um market based measure. And there's
Speaker 2: tremendous conversations that are happening at the I. M. O.
Speaker 2: Now
Speaker 2: and just yesterday um in one of our trade journals,
Speaker 2: uh you wouldn't know this because you probably don't read
Speaker 2: our trade journal. Um The International uh Chamber of Shipping
Speaker 2: had announced that it submitted a proposal to to the I. M. O.
Speaker 2: Um called the Fund and reward scheme. And so the
Speaker 2: idea is that, you know, um ship owners are going
Speaker 2: to contribute
Speaker 2: um a flat amount based on the carbon emissions, their
Speaker 2: annual carbon emissions. And this amount then gets pulled together.
Speaker 2: And this amount can be used to incentivize first movers
Speaker 2: by paying for the uh paying for the green fuel premium,
Speaker 2: right? And so so I think these kinds of things
Speaker 2: I think can work. Um we just need to make
Speaker 2: sure that it works across the sector, i. E globally
Speaker 2: for shipping as opposed to sort of regionally because I
Speaker 2: think regional patchwork type policy can really hurt the industry
Speaker 2: because it can create unlevel playing field.
Speaker 1: Absolutely. Um, Lynn earlier, several times you mentioned certain pilots
Speaker 1: that GCM D is doing, you know, initiatives and partnerships.
Speaker 1: Um so I think we talked a little bit about
Speaker 1: the ammonia bunkering study. Um and you also talked about
Speaker 1: the sailor, wind assisted propulsion. Anything else that you know
Speaker 1: that is taking a lot of your time these days
Speaker 1: in terms of initiatives and partnerships?
Speaker 2: Yeah, so, I mean, so we talked about the biofuels, right?
Speaker 2: The framework for, for supply chain integrity. We talked a
Speaker 2: little bit about the shipboard carbon capture. Maybe I'll take
Speaker 2: this opportunity to tell you about the ammonia bunkering study
Speaker 2: that was done. Um I'll start by, I mean that
Speaker 2: was
Speaker 2: our first that was our first study. And so we
Speaker 2: actually commissioned that study two months into our founding, that
Speaker 2: was how important the study was. And we knew we
Speaker 2: needed to do this. And again, I mean, this is
Speaker 2: with an eye on future fuel. Right? So ammonia is
Speaker 2: a future fuel. Um, ammonia is super toxic, right? It kills.
Speaker 2: Um and so if we were gonna use it as
Speaker 2: a marine fuel, we need to have a good handle
Speaker 2: On how to manage and handle it safely. Um so
Speaker 2: if you look across the value chain for ammonia, certainly
Speaker 2: there are people who are trying to produce ammonia at
Speaker 2: scale and that cause um and within the sector, you know,
Speaker 2: the first engine will be built 2020 for 20, time
Speaker 2: frame and then the first ship will be available. And
Speaker 2: so we asked ourselves, well, where's the gap? How can
Speaker 2: we
Speaker 2: plugging the gap and what can we do to kind
Speaker 2: of accelerate the eventual adoption of ammonia? And we identified
Speaker 2: safety as being one of them. How do you safely bunker,
Speaker 2: ammonia bunkers and refueling ammonia. So the idea of moving
Speaker 2: molecules around safely um and so we said, we said
Speaker 2: we were going to do an ammonia bunkering pilot um
Speaker 2: and then we quickly realized, oh we can't actually do
Speaker 2: an ammonia bunkering pilot because there are no safety guidelines.
Speaker 2: And if there are no safety guidelines we can't
Speaker 2: generate a regulatory sandbox to do the ammonia bunkering pilot.
Speaker 2: So we took a step back and we said, okay,
Speaker 2: we'll do what commission a safety study and so that's
Speaker 2: what the safety studies about its to identify the, you know,
Speaker 2: um and define the envelopes, the safety envelope, the operational
Speaker 2: envelopes um so that we can do a bunkering pilot
Speaker 2: um buried in there is also a competency framework development
Speaker 2: because um
Speaker 2: it's not enough to just come up with the safety guidelines.
Speaker 2: Um you need to train the seafarers so that they
Speaker 2: can handle ammonia safely. And so the competency framework is
Speaker 2: buried in there as well. Um so I'm happy to
Speaker 2: report the study is on track, so it will be
Speaker 2: done by the end of the year and then we
Speaker 2: would be ready to share
Speaker 2: beginning of next year and so we're in the process
Speaker 2: of scoping what that pilot would look like and how
Speaker 2: we can use these guidelines um with the help of
Speaker 2: the regulatory authorities of course and they would have to
Speaker 2: eventually approve and ultimately approve uh the guidelines and then
Speaker 2: approve a sandbox for us to do this pilot.
Speaker 2: Um so so again, it's it's it's demonstrating how we
Speaker 2: can safely move the molecules around because um it's with that,
Speaker 2: that I think bunkering can happen. Right. Um so
Speaker 1: great stuff. Well, good luck with that. Well, we'll look
Speaker 1: forward to the announcement toward the end of this year,
Speaker 1: early next year. Yeah, absolutely. Um you mentioned earlier about
Speaker 1: Scandinavian countries being fairly progressive in some of the frontier
Speaker 1: issues really to carbon capture and
Speaker 1: sequestration beyond that. I mean, which countries are the leading
Speaker 1: beacons right now in maritime de conversation?
Speaker 2: Um Well, I mean, I think I'd be remiss if
Speaker 2: I didn't mention Singapore. Right? I think, look, I mean
Speaker 2: we were set up in record time from the time
Speaker 2: that we were, you know that the recommendation was put
Speaker 2: forth to the Singapore government to the time we were
Speaker 2: set up was a matter of four months, right? I
Speaker 2: mean it's incredible how so
Speaker 2: supportive the ecosystem here is and how um how focused
Speaker 2: we are on the decarbonization agenda and and I mean
Speaker 2: I think um this is to be expected because Singapore
Speaker 2: is such an important maritime hub, so um
Speaker 2: I'll give you a couple of stats, I bet you
Speaker 2: didn't know this. So Singapore is a bunkering hub, bunkered
Speaker 2: more than 50 million tons of fuel last year and
Speaker 2: global bunkering is about 250 million tons. Yeah, it's bunkering
Speaker 2: volume in. Singapore is greater than the bunkering volumes of
Speaker 2: the next nine largest bunkering hubs combined,
Speaker 2: That's how much Singapore bunkers and um ships today, um
Speaker 2: irrespective of where they go, they generally bunker at more
Speaker 2: than 50% of the ship's bunker only at one port.
Speaker 2: So Singapore sees lots of ships, meaning that if Singapore
Speaker 2: can figure out how to decarbonization shipping here, it's gonna
Speaker 2: have a huge impact
Speaker 2: on the maritime sector. Right? And that's why Singapore is
Speaker 2: looking at a multi fuel future, it needs to be
Speaker 2: ready with different kinds of fuels because we've just said that,
Speaker 2: you know with different ships and different segments of ship,
Speaker 2: different size of ships, they're gonna need different kinds of fuels,
Speaker 2: they have different solutions. So, so, so I think it's
Speaker 2: important um to to sort of look ahead that way. So,
Speaker 2: so I think, I mean Singapore is very, very progressive
Speaker 2: in that sense. And of course
Speaker 2: the M. P. A. Had just launched the maritime blueprint.
Speaker 2: Um and so it talks about different measures of how
Speaker 2: it's gonna dick carbonized both on the portside on the
Speaker 2: infrastructure side and and then of course on the ship's
Speaker 2: side of things. Um so we mentioned Norway, um you know,
Speaker 2: it's got green coastal shipping programs, it's got lots of
Speaker 2: pilots going. Um they are a very good partner of
Speaker 2: ours in terms of, you know, looking at shipping and decarbonization, shipping.
Speaker 2: Um uh the M. P. A. Here had just signed
Speaker 2: a green corridor agreement with the port of Rotterdam. So
Speaker 2: Netherlands is another place to look to a port of
Speaker 2: Rotterdam is another big and important ports. And so this
Speaker 2: green corridors idea is again to to harmonize standards at
Speaker 2: both ports to be able to incentivize and and kind
Speaker 2: of
Speaker 2: accelerate decarbonization between for for ships that sail between these
Speaker 2: two ports. Right? And then finally I would say Japan,
Speaker 2: I think Japan, you know, has done a lot of
Speaker 2: trials to look at different bringing in different hydrogen carriers,
Speaker 2: both for their power sector and for the shipping sector.
Speaker 2: Um and so they are very progressive in that sense
Speaker 2: as well. And um there are
Speaker 2: my opinion, there are lots of learnings to be had
Speaker 2: um and sharing to be had with Singapore because like
Speaker 2: with Japan, sorry, because like Singapore, Japan has very little
Speaker 2: natural resources. Right. Um so if we, as we move
Speaker 2: to a renewable energy economy, like we need to import
Speaker 2: our energy. And so how do we think about this?
Speaker 2: So there are lots of, I think exchanges that can
Speaker 2: be had, you
Speaker 1: did not mention the U. S. Or china?
Speaker 2: Um Well, I mean um the U. S. Is not
Speaker 2: a big player in shipping. Um um and so I
Speaker 2: think from a from a sectorial perspective, I didn't mention
Speaker 2: us because it's not a friend shipping.
Speaker 2: Um and and um china certainly has uh is building
Speaker 2: its fair share of ships. And so I think in
Speaker 2: that sense, I think um working with the shipyards is
Speaker 2: very important because they are the ones that are gonna
Speaker 2: be responsible for putting on retrofit, uh technologies hardware on
Speaker 2: on the ships, they're gonna be the ones that are
Speaker 2: going to install new engines on the ships. Right? And
Speaker 2: so I think in that sense they're important too
Speaker 1: Sure because you know, at the very beginning of the podcast,
Speaker 1: you said that, you know, 90% of global trade is
Speaker 1: on on the waters and I think of China, you know,
Speaker 1: the largest exporter in the world, but I suppose it
Speaker 1: also depends on, you know, who actually owns that shipping
Speaker 1: line and where the sort of the responsibility of the
Speaker 1: regulatory uh sort of the window goes in.
Speaker 1: Um so, so yeah, I suppose, you know, countries like Singapore,
Speaker 1: you know, which are big entre ports, you know, it
Speaker 1: makes sense for them to take the lead into, so
Speaker 1: to speak. Um Lynn in a recent interview, you were
Speaker 1: talking about the CMD and you said something to the
Speaker 1: extent that you know, you've got a role to play
Speaker 1: but not just in providing funds but also in providing
Speaker 1: value adds. So curious about this this role of G. C. M. D.
Speaker 1: As a neutral convener of sorts.
Speaker 2: Yeah, I mean um
Speaker 2: yes. So I'll come back to the ammonia bunkering study
Speaker 2: um to illustrate this. So with the ammonia bunkering study
Speaker 2: um Typically when one does a study like this, it
Speaker 2: takes a couple of years to get a safety study done.
Speaker 2: Um because one typically does it serially meaning that one
Speaker 2: does the study then consults with industry to kind of
Speaker 2: refine the study. When the study is done, you submitted
Speaker 2: to the regulatory authorities who then kind of say, well
Speaker 2: you're deficient in this, this this and this go back
Speaker 2: and do more
Speaker 2: And that iterated process takes a couple of years. We
Speaker 2: didn't want to wait a couple of years because we
Speaker 2: don't have time to wait. And frankly, I'm impatient. Um
Speaker 2: so what we did was we were pretty heavy handed
Speaker 2: about this study, we assembled at the get go 22
Speaker 2: industry partners across the supply chain.
Speaker 2: And we when we um selected after technical evaluation D.
Speaker 2: N VSERv wrong and Singapore Maritime Academy to do the study,
Speaker 2: we told the trio that they needed to work with
Speaker 2: these 22 partners that these 22 partners have experience dealing
Speaker 2: with ammonia, They have knowledge they need to work with them.
Speaker 2: And then alongside, we worked with M. P. A. And
Speaker 2: had mph help us set up a regulatory working group.
Speaker 2: Um and so these discussions are happening in parallel and
Speaker 2: the consultations are happening in parallel so everybody has kept
Speaker 2: abreast of the progress. Okay? So that if there's anything
Speaker 2: deficient that we need to address or there's any concerns
Speaker 2: from a regulatory standpoint, we address it at the get go.
Speaker 2: And so by doing so we've been able to kind
Speaker 2: of shorten the study down to about eight months. Um
Speaker 2: and we're hopeful, I mean at the end of the
Speaker 2: day it still needs to be approved but we're hopeful
Speaker 2: that it would be approved relatively quickly
Speaker 2: um for that reason. Right. And so this is sort
Speaker 2: of how we can value add as a neutral convener,
Speaker 2: we can bring people um both from the private sector
Speaker 2: and then the public sector together um we can convene
Speaker 2: um we can bring nominally competitors together to work together
Speaker 2: um in another example. So um so in in in
Speaker 2: the biofuels trial, I mean we brought
Speaker 2: 13 vessel owners and charters together to work together on
Speaker 2: this pilot. Right? Um so so again, I think where
Speaker 2: we value add is where there's tremendous complexity when it's
Speaker 2: simply to pilot a single solution by putting it on
Speaker 2: board ship and it's sort of a one player, one solution,
Speaker 2: one solution provider, one player type thing. I think
Speaker 2: there are lots of other players that can add value
Speaker 2: that way, but we can add value where there's tremendous
Speaker 2: complexity and where there's a lot of stakeholders because we
Speaker 2: can bring people together and we can provide the transparency
Speaker 2: where the transparency is needed uh to move,
Speaker 2: does that make sense?
Speaker 1: Absolutely. I think this is an important role for you
Speaker 1: to play in addition to just, you know, funding pilots,
Speaker 1: but it helps, you know, results on these complexities and
Speaker 1: knotty issues around that. But Lynne the other big constraint
Speaker 1: is funding
Speaker 1: uh you know, green financing. So as you know, we
Speaker 1: have dbs are, you know, very big champions of green
Speaker 1: financing and green loans um but I don't think, you know,
Speaker 1: the financial system has solved this issue yet. So tell
Speaker 1: me a little bit about your experience and sourcing green
Speaker 1: financing from both the bank and non bank sectors.
Speaker 2: Yeah, okay, well just to put things in perspective to
Speaker 2: Dick carbonized shipping, the number that's been thrown around is
Speaker 2: you need $3 trillion.80 percent of the $3 trillion is
Speaker 2: going to be spent on land infrastructure. Right. So, so
Speaker 2: think about it to Dick carbonized shipping, you need to
Speaker 2: spend money on land infrastructure right there in itself is
Speaker 2: already a hard problem because the money actually flows out
Speaker 2: of the sector.
Speaker 2: Um, and then of course this land infrastructure, well, what
Speaker 2: are they, they would be storage terminals for new fuels,
Speaker 2: they would be, you know, bunker facilities for new fuel, etcetera, etcetera. Um,
Speaker 2: and so these are first of a kind projects and
Speaker 2: I'm sure you've heard plenty because I've certainly heard plenty.
Speaker 2: These are not bankable. These are not bankable. So there's
Speaker 2: plenty of climate action money out there, but they're really
Speaker 2: for things like solar projects, wind projects. But these first
Speaker 2: of a kind projects, it's really hard because they are
Speaker 2: not bankable. So, um, we're thinking hard about how, you know, um,
Speaker 2: we can distribute risk
Speaker 2: with organizations that can best tolerate these different kinds of risks. Right?
Speaker 2: And I think, you know, GCM B has a special
Speaker 2: role to play here because we can help the risk technology,
Speaker 2: we can help lower the risk on the operations side
Speaker 2: of things. We can even open dialogue with regulators. So
Speaker 2: to lower regulatory or policy risk to, um, and then
Speaker 2: is there an opportunity to crowd in monies from different
Speaker 2: sources with different tolerance of risk to,
Speaker 2: to be able to start moving on these kinds of projects. Right.
Speaker 2: And G CMd is fortunate in that we have a
Speaker 2: small war chest that we can also put money in,
Speaker 2: but let's face it compared to these numbers that we're
Speaker 2: talking about GCM these money is chump change, Right? And
Speaker 2: so we need to see how we can crowd in
Speaker 2: this money and and what it means again to do
Speaker 2: things in the 30 years that we want to do
Speaker 2: things in. It's really, we can't afford to wait to
Speaker 2: do things sequentially. We need,
Speaker 2: we need to be able to invest in fuel production
Speaker 2: facility before they're off takers. We need to invest in
Speaker 2: zero carbon emission ship before fuel production is at scale.
Speaker 2: I mean, these things just need to happen in parallel.
Speaker 2: And so um folks like you need to help us
Speaker 2: think about how to do this. I mean, I know
Speaker 2: nothing about finance. I just know that we need to
Speaker 2: kind of mobilize these so that we can crowd in
Speaker 2: the resources to be able to get going quickly.
Speaker 1: Yeah, like I said, I don't think finance has solved
Speaker 1: this yet. It's another of those, you know, big issues
Speaker 1: and in terms of risk underwriting or public private partnership,
Speaker 1: uh and the cost of capital associated with these things
Speaker 1: as well as the risk mitigation, it's, it's a big area,
Speaker 1: we will have to revisit this in a couple of
Speaker 1: years timeline to see, you know, whether my part of
Speaker 1: the industry is being a good partner to your part
Speaker 1: of the industry in pushing this forward um lin you
Speaker 1: used the phrase multi fuel future earlier.
Speaker 1: Um I think having talked about a bunch of, you know,
Speaker 1: sort of narrowly defined points earlier, maybe as a final
Speaker 1: question for this podcast you just lay out for me,
Speaker 1: let's say the 2030 vision that you have for a
Speaker 1: multi-fuel future.
Speaker 2: 2030 is hard man because I think a lot of
Speaker 2: these um I think a lot of these green fuels
Speaker 2: aren't going to be available at scale to us until
Speaker 2: about mid 20 thirties. So I suspect um there's still
Speaker 2: gonna be a lot of um a lot of ships
Speaker 2: running on fossil. Um And I think to the extent
Speaker 2: possible we should look at um
Speaker 2: you know um where we can do biofuels um where
Speaker 2: we can again do L. N. G. Responsibly. One of
Speaker 2: the things we're looking at is L. P. G. Um
Speaker 2: um and that lowers carbon emissions too and doesn't deal
Speaker 2: with methane slip. So could that be an opportunity? So
Speaker 2: that's something that we're still kind of trying to understand
Speaker 2: and wrap our heads around.
Speaker 2: Um and then um to the extent that green fuels
Speaker 2: are available, I mean if you look at these reports
Speaker 2: they basically say in order for us to hit Paris targets.
Speaker 2: So net zero by 2050 you need to have 5%
Speaker 2: of the fuels being green fuels by 2030. And so
Speaker 2: we need to crowd in that 5% green fuels uh
Speaker 2: to get going on this. So um yeah um it's challenging.
Speaker 1: I'm really glad that you are sort of you know
Speaker 1: waited in reality that you see that, you know, just
Speaker 1: because I gave you this eight year, you know, window
Speaker 1: to sort of expand the vision that everything's gonna work out,
Speaker 1: but you're being very, very realistic and I appreciate that
Speaker 1: very much these are, you know, generational existential issues, but
Speaker 1: we have so much work to do in in cracking
Speaker 1: the code. Um, lin liu thank you so much for
Speaker 1: your time and insights,
Speaker 2: thank you for having me again. I mean I think I'll,
Speaker 2: and by saying that you know, it's, it's really important
Speaker 2: to be grounded and understand what what is happening on
Speaker 2: the ground and how fast we can move. But that's
Speaker 2: not to be despondent. Right? I think we need to
Speaker 2: roll up our sleeves and get going and we need
Speaker 2: to double down is what it comes down to.
Speaker 2: Thanks again, absolutely
Speaker 1: appreciate your call to action. I also thank our listeners
Speaker 1: for listening to this very interesting episode of copy time
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Speaker 1: Sharma and violently provided additional production assistance, copay time is
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