WEBVTT - Kopi Time E088 - Dr. Lynn Loo on Decarbonising International Shipping 0:00:06.410 --> 0:00:09.950 Welcome to Coffee Time, a podcast series on markets and 0:00:09.950 --> 0:00:13.299 economies from dBS group Research. I'm Tamar Beck, chief economist 0:00:13.300 --> 0:00:18.050 welcoming to our 88th episode. Pretty Auspicious number. Uh today's 0:00:18.050 --> 0:00:21.340 guest is dr lin liu, who will talk about efforts 0:00:21.340 --> 0:00:23.650 to bring a critical part of the global economy, which 0:00:23.650 --> 0:00:25.040 is international shipping. 0:00:25.340 --> 0:00:29.170 Uh an academic by training Dr Lewis presently on leave 0:00:29.170 --> 0:00:33.140 from Princeton University where she is Theodora D and William H. Walton, 0:00:33.150 --> 0:00:37.460 third professor in engineering in 2017, she co founded and 0:00:37.460 --> 0:00:42.000 Luca Technologies, a startup, developing wireless smart window solutions to 0:00:42.000 --> 0:00:46.120 increasing energy efficiency of buildings and improve occupant comfort. 0:00:46.450 --> 0:00:50.019 Since 2021. She has been here in Singapore shaping and 0:00:50.020 --> 0:00:54.920 leading the Global Center for Maritime decarbonization or GCM D. 0:00:54.930 --> 0:00:58.120 You will hear that acronym several times in this podcast. 0:00:58.130 --> 0:01:00.370 T C M D is a nonprofit set up to 0:01:00.370 --> 0:01:04.460 help accelerate international shipping transition to a low and zero 0:01:04.459 --> 0:01:08.190 carbon future. We've done quite a few podcasts on climate change, 0:01:08.200 --> 0:01:10.830 but this one is very sectoral, very specific and I'm 0:01:10.830 --> 0:01:14.050 really excited about it. Dr lin liu. Welcome to Covid Time. 0:01:14.530 --> 0:01:16.830 Hi, thanks for having me. 0:01:16.840 --> 0:01:20.229 It's a pleasure to have you tell us about GCM D. 0:01:20.240 --> 0:01:24.429 Yeah, I prefer to go with the acronym G cmd 0:01:24.430 --> 0:01:28.140 because the full name is indeed a mouthful. Um so 0:01:28.140 --> 0:01:30.950 as you said, G cmd is a nonprofit, we're about 0:01:30.950 --> 0:01:35.540 14 months old. We were set up at the recommendation 0:01:35.540 --> 0:01:40.330 of this international advisory panel for maritime decarbonization that was 0:01:40.330 --> 0:01:41.670 convened here in Singapore. 0:01:41.860 --> 0:01:48.050 Um that that had basically chief executives of shipping companies, 0:01:48.060 --> 0:01:51.720 battery companies, etcetera. To think about what we can do 0:01:51.720 --> 0:01:56.910 here to really um move the sector forward. And so 0:01:56.920 --> 0:01:59.880 the I. P. Met over covid and recommended the setting 0:01:59.880 --> 0:02:03.790 up of um a coordinating body uh to look at 0:02:03.800 --> 0:02:08.389 action oriented things that we can do to accelerate decarbonization 0:02:08.389 --> 0:02:10.270 for international shipping. 0:02:10.680 --> 0:02:14.940 Um This recommendation was put forward um in april last 0:02:14.940 --> 0:02:18.350 year and that was accepted. Uh Six industry partners came 0:02:18.350 --> 0:02:21.780 forward and said they would start, so they are our 0:02:21.780 --> 0:02:26.960 founding partners essentially and they provided $10 million apiece. And 0:02:26.960 --> 0:02:30.070 then Singapore's Maritime and Port Authority came in and match 0:02:30.070 --> 0:02:33.650 that with $60 million and that formed the first tranche 0:02:33.660 --> 0:02:34.270 of our fund 0:02:34.287 --> 0:02:37.567 for G C M G. So G CMd sits right 0:02:37.567 --> 0:02:42.167 at the private and public interface. Um and really our 0:02:42.167 --> 0:02:46.427 mission is to help the international shipping sector eliminate g 0:02:46.427 --> 0:02:50.776 emissions and we do this by doing three following things. 0:02:50.776 --> 0:02:55.017 One is to shape standards for future fuels, uh the 0:02:55.017 --> 0:02:57.880 other is to finance first of a kind 0:02:57.894 --> 0:03:01.113 projects and then the third would be to pilot low 0:03:01.114 --> 0:03:06.434 carbon solutions uh in real world operating conditions. And the 0:03:06.434 --> 0:03:09.304 reason we can do this is because um you know, 0:03:09.304 --> 0:03:11.714 we are a group of engineers and scientists, we have 0:03:11.714 --> 0:03:16.044 domain and technical expertise, we can scope projects, we have 0:03:16.044 --> 0:03:19.104 the flexible funding that our founders have provided us with 0:03:19.114 --> 0:03:21.490 and subsequent partners have provided us with. 0:03:21.501 --> 0:03:24.001 We are an N. G. O. So we're neutral convener 0:03:24.001 --> 0:03:27.061 so we can bring the stakeholders across the supply chain. 0:03:27.071 --> 0:03:30.951 Um and even beyond the ecosystem together to work on 0:03:30.951 --> 0:03:34.430 these pilots and then finally with mph as our partner 0:03:34.431 --> 0:03:36.891 we have access to regulators and so we can begin 0:03:36.891 --> 0:03:40.251 to think about putting sandboxes together so that we can 0:03:40.251 --> 0:03:43.311 actually do these meaningful pilots. So that's in a nutshell. 0:03:43.321 --> 0:03:45.110 Woogie cmd is 0:03:45.440 --> 0:03:45.740 oh 0:03:45.740 --> 0:03:49.530 this is so exciting. Um the ability to have that 0:03:49.530 --> 0:03:53.450 kind of flexibility and be in a coordinating role. Um 0:03:53.460 --> 0:03:55.410 and that sounds like a role of a lifetime Lynn. 0:03:55.420 --> 0:03:58.380 Um but let me step back for a second and 0:03:58.380 --> 0:04:00.470 ask the most obvious question, which is why do we 0:04:00.470 --> 0:04:03.630 need to solve for maritime decarbonization and how large are 0:04:03.630 --> 0:04:04.460 the States? 0:04:05.400 --> 0:04:08.600 Ah that's a really good question. I mean um so 0:04:08.600 --> 0:04:11.839 14 months ago I knew nothing about shipping, right? And 0:04:11.840 --> 0:04:15.780 so to me shipping was um sort of you know 0:04:15.790 --> 0:04:18.430 out of out of sight out of mind and I'm 0:04:18.430 --> 0:04:21.190 sure that's the case for lots of people. We think 0:04:21.190 --> 0:04:23.089 about shipping when we think about O. R. 0:04:23.105 --> 0:04:25.375 Perhaps we think about shipping when we think about our 0:04:25.375 --> 0:04:30.425 Amazon boxes coming outdoors. Um but shipping is really integral 0:04:30.425 --> 0:04:33.455 to the global supply chain. So tomorrow do you know 0:04:33.464 --> 0:04:37.825 that shipping is responsible for 90% of the global trade? 0:04:37.835 --> 0:04:40.805 So it touches 90% of the global trade, right? 0:04:40.960 --> 0:04:45.440 Um and it's responsible for 3% of global carbon emissions. 0:04:45.450 --> 0:04:48.810 Um and just to put things in perspective, 3% may 0:04:48.810 --> 0:04:52.120 not sound like a lot, but 3% makes it um 0:04:52.130 --> 0:04:55.430 a the sixth largest emitter, if you will from a 0:04:55.430 --> 0:04:59.550 country perspective, um shipping is regulated by a single entity 0:04:59.550 --> 0:05:03.220 called the International Maritime Organization or the IMF. 0:05:03.440 --> 0:05:08.620 Um and so shipping submissions is actually counted um separate 0:05:08.620 --> 0:05:13.050 from individual countries carbon inventory. Right? So it has its 0:05:13.060 --> 0:05:15.969 own carbon emissions. That's why I can tell you it's 3% 0:05:15.980 --> 0:05:19.960 and that 3% is comparable to that of aviation. So 0:05:19.960 --> 0:05:22.990 why is this such big stakes? Well, because it's such 0:05:22.990 --> 0:05:25.190 an integral part of the global supply chain, 0:05:25.200 --> 0:05:28.799 essentially our scope one emissions is always gonna be somebody 0:05:28.800 --> 0:05:33.020 else's scope three emissions. So the cargo owners, the consumers, 0:05:33.029 --> 0:05:36.430 they can't dick carbonized if we don't dick carbonized. So 0:05:36.430 --> 0:05:39.180 that's how linked we are in in in terms of 0:05:39.180 --> 0:05:41.950 the global supply chain. Right? So it's really important for 0:05:41.950 --> 0:05:45.580 us to think about decarbonization shipping so that the whole 0:05:45.580 --> 0:05:46.950 world can be carbon eyes. 0:05:47.810 --> 0:05:52.120 Yeah. So speaking of International Maritime Organization, so I understand, 0:05:52.120 --> 0:05:54.420 you know, there are these certain targets that they have said. 0:05:54.430 --> 0:05:58.380 So tell us a bit about those targets and your 0:05:58.390 --> 0:06:01.020 overall thoughts, we're gonna go into specific label your broad 0:06:01.020 --> 0:06:04.339 based thoughts on how do we go about addressing these targets. 0:06:05.180 --> 0:06:08.920 Yeah. So, um so I M. O. Has set targets 0:06:08.930 --> 0:06:13.180 for decarbonization. International shipping and the target is to reduce 0:06:13.180 --> 0:06:19.219 carbon intensity by 40% by 2030 relative to 2008 levels, 0:06:19.220 --> 0:06:24.740 and then to reduce total g emissions by 50% by 2050. Now, 0:06:24.740 --> 0:06:28.460 you'll notice that these targets aren't exactly pairs aligned because 0:06:28.460 --> 0:06:28.640 power 0:06:28.915 --> 0:06:32.895 um targets call for net zero by 2015. Nonetheless, these 0:06:32.895 --> 0:06:37.235 are very ambitious target for shipping because in order for 0:06:37.235 --> 0:06:40.495 us to get to these kinds of targets, um basically 0:06:40.495 --> 0:06:43.945 we're looking at low carbon and zero carbon fuels that 0:06:43.955 --> 0:06:47.705 are currently not available today. Okay. Um so that's that's 0:06:47.705 --> 0:06:49.685 just the target side of things. So how how am 0:06:49.685 --> 0:06:52.115 I looking at this? Well, I think um 0:06:52.380 --> 0:06:57.460 you know, um shipping went from using wind as propulsion 0:06:57.470 --> 0:07:00.650 to coal to generate steam to oil. And now we're 0:07:00.650 --> 0:07:03.450 looking at sort of the fourth incarnation of what we 0:07:03.450 --> 0:07:05.060 should be using as fuels, right? 0:07:05.190 --> 0:07:08.750 Um just the industrial revolution alone, if you look at 0:07:08.750 --> 0:07:15.100 sort of um what um really helped um economies develop, 0:07:15.110 --> 0:07:19.140 that uh industrial revolution took place, and that energy system 0:07:19.140 --> 0:07:22.370 that was built took more than a century. Um and 0:07:22.370 --> 0:07:26.740 now we're talking about a completely different energy infrastructure and 0:07:26.740 --> 0:07:28.800 we'd like to build this in 30 years. 0:07:29.080 --> 0:07:32.880 Um That's a really, really tall task. It's a challenging task. 0:07:32.890 --> 0:07:37.100 Um It's saying this is not meant to cripple one, 0:07:37.110 --> 0:07:40.310 but it's just to put things into perspective, right, in 0:07:40.310 --> 0:07:43.230 terms of how long it took for us to kind 0:07:43.230 --> 0:07:46.080 of embrace oil and gas, and now we're saying, okay, 0:07:46.080 --> 0:07:48.690 forget about oil and gas. Let's think about renewables. And 0:07:48.690 --> 0:07:51.170 by the way, let's do this in 30 years. Um 0:07:51.180 --> 0:07:54.150 so in order to think about this energy transition, I 0:07:54.150 --> 0:07:57.250 think we need to chunk it up into pieces. 0:07:57.265 --> 0:07:59.865 We need to think about near term solutions. We need 0:07:59.865 --> 0:08:02.185 to think about medium term solutions and then we need 0:08:02.185 --> 0:08:05.115 to think about long term solutions. It's easy to just 0:08:05.115 --> 0:08:07.285 kind of look at the long term solutions because there's 0:08:07.285 --> 0:08:09.935 no question where we'd like to end up, but it's 0:08:09.935 --> 0:08:12.235 not obvious how to get there right. Like I said 0:08:12.245 --> 0:08:15.425 for shipping, the long term solution is really the zero 0:08:15.425 --> 0:08:20.115 carbon fuels, the green pneumonias, green methanol, etcetera that's needed 0:08:20.125 --> 0:08:23.445 um for us to to to be able to sail 0:08:23.445 --> 0:08:26.455 without admitting G. Um 0:08:26.660 --> 0:08:28.680 so, so I think what we need to do is 0:08:28.680 --> 0:08:30.660 to keep an eye on the ball on the long 0:08:30.660 --> 0:08:33.770 term solution and work hard on that. But in the meantime, 0:08:33.770 --> 0:08:35.880 do what we can with what we have now to 0:08:35.880 --> 0:08:38.650 start bending the curve. And so what it means is 0:08:38.650 --> 0:08:42.060 we need to simultaneously work on near term solutions. So 0:08:42.059 --> 0:08:43.309 that include a 0:08:43.330 --> 0:08:47.720 but it includes technologies that can reduce fuel consumption, like, 0:08:47.730 --> 0:08:52.090 you know, wind sails, like whole cleaning robots, like air lubrication, 0:08:52.100 --> 0:08:55.309 but also look at um low carbon fuels that are 0:08:55.309 --> 0:09:00.740 available today. So biofuels perhaps even liquefied natural gas now 0:09:00.740 --> 0:09:04.160 they aren't without their set of issues, but I think 0:09:04.170 --> 0:09:07.930 done right and used properly, they can reduce our carbon 0:09:07.929 --> 0:09:09.300 footprint in the meantime 0:09:09.600 --> 0:09:11.780 and then the in the medium term, I think we 0:09:11.780 --> 0:09:15.790 need to think about things like shipboard carbon capture um 0:09:15.790 --> 0:09:20.140 carbon capture provides the runway for green fuels to scale 0:09:20.140 --> 0:09:22.660 for green fuel costs to come down. And so we 0:09:22.660 --> 0:09:25.209 need to think about mid term solutions as well. So 0:09:25.210 --> 0:09:28.170 basically to chunk up the energy transition and think about 0:09:28.170 --> 0:09:33.190 solution in three buckets um most importantly, I think um 0:09:33.200 --> 0:09:37.110 you know, we can't do this alone, right? Um um 0:09:37.309 --> 0:09:39.790 just talking about fuels, right? I think if you think 0:09:39.790 --> 0:09:42.830 about shipping fuels is really outside the sector, so we 0:09:42.830 --> 0:09:47.699 need to think about um sectorial collaboration and partnership, but 0:09:47.700 --> 0:09:51.010 we also more importantly need to think about cross sector 0:09:51.010 --> 0:09:55.340 collaboration and partnerships as well in order to really uh 0:09:55.350 --> 0:09:58.040 get moving and move the needle and 0:09:58.065 --> 0:10:00.745 and I think finally we need the carrot and the stick. 0:10:00.745 --> 0:10:04.715 So having a price on carbon certainly will help. Um 0:10:04.715 --> 0:10:08.434 and and also having regulations and having these targets so 0:10:08.434 --> 0:10:11.564 that we know where we're headed and that you know, 0:10:11.565 --> 0:10:14.605 these policies are enforced. So all those things need to 0:10:14.605 --> 0:10:16.575 come into play if we're going to get to those 0:10:16.575 --> 0:10:18.819 targets that we just talked about. 0:10:19.000 --> 0:10:21.439 Right, okay, we are gonna unpack some of these because 0:10:21.440 --> 0:10:23.600 some of the stuff you said, we can't just, you know, 0:10:23.610 --> 0:10:25.679 just use the word you have to explain to us 0:10:25.679 --> 0:10:30.079 in greater detail. So um first technologies than solutions and 0:10:30.080 --> 0:10:31.860 then I want to talk about carbon capture. Alright, so 0:10:31.860 --> 0:10:35.770 starting with current and frontier technologies, you sort of touched 0:10:35.770 --> 0:10:38.740 upon them and I'm really tantalized by them. So what 0:10:38.740 --> 0:10:41.390 is a little greater detail about some of the technologies 0:10:41.390 --> 0:10:43.949 that you think are promising now and then the frontier 0:10:43.950 --> 0:10:45.000 stuff that you know 0:10:45.017 --> 0:10:47.797 almost sounds like science fiction, but we'd like it to happen. 0:10:47.807 --> 0:10:49.766 Well let's not call it science 0:10:49.767 --> 0:10:50.747 fiction, It 0:10:50.756 --> 0:10:54.016 happen, it's a matter of time, it will happen. So 0:10:54.017 --> 0:10:56.636 we don't want to call that science fiction. Right? So 0:10:56.636 --> 0:10:58.627 we can talk about the near term solutions first. I 0:10:58.627 --> 0:11:01.597 mean near term solutions are things that are currently available 0:11:01.597 --> 0:11:06.686 today that when install you can shave emissions by, I 0:11:06.687 --> 0:11:09.817 don't know anywhere from 1 to 10%. Okay, it doesn't 0:11:09.817 --> 0:11:11.020 get you all the way there, but 0:11:11.034 --> 0:11:13.824 you can start shaving emissions. So those are things like 0:11:13.833 --> 0:11:16.574 wind sales that you can put on board. Um in 0:11:16.574 --> 0:11:19.894 fact just a couple days ago I saw, so my 0:11:19.894 --> 0:11:23.024 office is at, so I look I I overlooked the 0:11:23.294 --> 0:11:27.453 Panjang terminal ports. Um and I saw one of our partnership, 0:11:27.453 --> 0:11:31.383 so this is an ocean network express container ship that 0:11:31.384 --> 0:11:33.864 had this white thing at its bow, so at the 0:11:33.874 --> 0:11:36.034 front of the ship and I couldn't quite figure out 0:11:36.034 --> 0:11:37.040 what it was. So I 0:11:37.051 --> 0:11:39.801 Ask your friends at, oh any and they basically said 0:11:39.811 --> 0:11:42.331 Oh it's a wind deflector and so I looked it 0:11:42.331 --> 0:11:44.211 up and it turns out that this wind deflector is 0:11:44.211 --> 0:11:48.310 essentially like a visor on trucks or even on motorcycles. 0:11:48.321 --> 0:11:51.800 And it basically reduces drag and by reducing drag as 0:11:51.801 --> 0:11:55.751 it sails, you can reduce fuel consumption and it reduces 0:11:55.751 --> 0:11:58.641 fuel consumption by about 2%. Right? So these are the 0:11:58.641 --> 0:12:00.561 kinds of things one can do in the interim. 0:12:00.811 --> 0:12:03.061 This was a large container ship. 0:12:05.179 --> 0:12:06.319 Yeah, 0:12:06.330 --> 0:12:08.680 yeah, yeah, yeah. So, so these are the kinds of 0:12:08.679 --> 0:12:12.439 things one can do right? Um there are operational measures 0:12:12.440 --> 0:12:15.050 one can also do. So for example, this idea of 0:12:15.050 --> 0:12:19.980 just in time. So basically you can sail more slowly 0:12:19.980 --> 0:12:22.700 and when you sail more slowly, you use less fuel 0:12:22.720 --> 0:12:25.210 so that you get to the ports just in time 0:12:25.220 --> 0:12:28.280 as opposed to going fast and then getting to the 0:12:28.280 --> 0:12:30.500 ports and then having to wait at the court for 0:12:30.510 --> 0:12:33.120 a berth space or whatnot. Right? So these are the 0:12:33.120 --> 0:12:35.979 kinds of things one can do again. It shapes um 0:12:35.990 --> 0:12:39.429 fuel consumption and so it nets out carbon emissions by 0:12:39.429 --> 0:12:42.179 between 1 to 10% depending on what we're talking about 0:12:42.550 --> 0:12:46.280 in terms of fuel. Uh current fuels, low carbon fuels 0:12:46.280 --> 0:12:50.949 are available are things like biofuels. Now, biofuels are not 0:12:50.960 --> 0:12:53.780 at scale. So we understand that, but you know, if 0:12:53.780 --> 0:12:56.179 you can deploy some of it, you can reduce your 0:12:56.179 --> 0:13:01.020 carbon footprint. So the concept of drop in um is important. 0:13:01.020 --> 0:13:03.600 So that's the idea of taking some 0:13:03.615 --> 0:13:06.735 biofuels and dropping it into marine fuel so that you 0:13:06.735 --> 0:13:09.475 can reduce your carbon footprint some now of course it's 0:13:09.475 --> 0:13:12.735 important to know where your biofuel comes from because its 0:13:12.735 --> 0:13:18.575 origination um would affect its carbon footprint reduction. Right? And 0:13:18.575 --> 0:13:20.795 then it's important to know how much you have in 0:13:20.795 --> 0:13:24.675 there so that you can properly calculate your g emissions abatement. 0:13:24.890 --> 0:13:29.559 Um you can use liquefied natural gas um provided that 0:13:29.559 --> 0:13:34.470 there's no methane slip upstream, provided you're not leaking methane 0:13:34.470 --> 0:13:38.650 because methane is an even more potent greenhouse gas um 0:13:38.660 --> 0:13:41.990 you can reduce carbon emissions by about 20%. So these 0:13:41.990 --> 0:13:43.960 are things that we need to think about. I don't 0:13:43.960 --> 0:13:48.480 think we should a priority cross anything out at this 0:13:48.480 --> 0:13:51.060 moment because we need to do whatever we can with 0:13:51.070 --> 0:13:52.349 whatever we have now 0:13:52.367 --> 0:13:55.547 to really bend the curve on carbon emissions. So these 0:13:55.547 --> 0:13:58.117 are the kinds of things we can do sort of now, 0:13:58.267 --> 0:14:01.567 just a second on the biofuel one, is that concept 0:14:01.567 --> 0:14:03.187 or is it actually happening in the world? 0:14:03.587 --> 0:14:06.747 It's actually happening. So I mean there are there have 0:14:06.747 --> 0:14:09.667 been lots of trials that have been done and you 0:14:09.667 --> 0:14:15.136 can commercially purchase biofuels, there's a green fuel premium associated 0:14:15.136 --> 0:14:19.017 with using biofuels and so then you need to justify 0:14:19.017 --> 0:14:19.747 this green fuel 0:14:19.844 --> 0:14:21.984 premium or you need your customers to be able to 0:14:21.984 --> 0:14:24.674 pay for the green fuel premium. So in fact what 0:14:24.674 --> 0:14:28.314 we've done um earlier in the years, we've spoken to 0:14:28.314 --> 0:14:31.664 our stakeholders, this is typical of how we scope our pilots. 0:14:31.674 --> 0:14:34.734 So we spoke to about 200 stakeholders across the supply 0:14:34.734 --> 0:14:37.804 chain and we asked them, why aren't you using biofuels? 0:14:37.804 --> 0:14:41.194 Biofuels are available today? Why aren't you using more biofuels? 0:14:41.204 --> 0:14:45.894 And repeatedly, the pain point that has come up is, well, 0:14:45.894 --> 0:14:47.310 the supply chain is actually quite 0:14:47.321 --> 0:14:50.471 opaque. So we don't quite know what we're getting, we 0:14:50.471 --> 0:14:53.171 don't know what we're paying for. So what we've done 0:14:53.171 --> 0:14:58.441 is we've basically scoped a pilot with 13 vessels bunkering, 0:14:58.451 --> 0:15:02.111 meaning refueling at three different ports on three different continents. 0:15:02.111 --> 0:15:06.591 So Singapore Rotterdam and Houston with different kinds of biofuels 0:15:06.601 --> 0:15:10.781 with the goal of bolstering the supply chain integrity. So 0:15:10.781 --> 0:15:13.661 we're gonna use a tracer technology, we're gonna go all 0:15:13.661 --> 0:15:14.800 the way up stream 0:15:15.010 --> 0:15:18.070 to the biofuel producer and we're gonna put that into 0:15:18.070 --> 0:15:21.920 the biofuel, it's a tag and flag so you know 0:15:21.920 --> 0:15:24.890 where it originates from. So you know, its carbon footprint 0:15:24.900 --> 0:15:27.700 at the beginning and then you follow it down the 0:15:27.700 --> 0:15:31.360 supply chain. And so then you can have assurance on 0:15:31.360 --> 0:15:35.720 the quality on the quantity on the abatement potential and 0:15:35.730 --> 0:15:40.670 that should give confidence to the purchaser um to justice 0:15:40.686 --> 0:15:43.816 by the green fuel premium that 11 is purchasing, Right? So, 0:15:43.816 --> 0:15:47.036 so that's sort of the idea to bolster the integrity 0:15:47.036 --> 0:15:49.806 of the supply chain and we're doing this for biofuels 0:15:49.806 --> 0:15:53.556 for now because biofuels are, is available today, but looking 0:15:53.556 --> 0:15:56.696 forward when green fuels become available, they're not going to 0:15:56.696 --> 0:15:59.916 be available at scale immediately. So again, this drop in 0:15:59.916 --> 0:16:03.186 concept of mixing green with gray is going to be important. 0:16:03.196 --> 0:16:05.676 And again, there you want to know how much of 0:16:05.676 --> 0:16:06.350 the green is. 0:16:06.362 --> 0:16:09.132 They're the quality of the green, the carbon footprint of 0:16:09.132 --> 0:16:12.022 the green fuel um so that you can justify the 0:16:12.022 --> 0:16:14.102 green fuel premium. So we think this framework is going 0:16:14.102 --> 0:16:17.852 to be extensible to future green fuels as well. 0:16:17.942 --> 0:16:20.862 That's really interesting. So now on the lng part you 0:16:20.862 --> 0:16:24.282 talked about the risk of methane leakage and so on. 0:16:24.292 --> 0:16:27.272 So walk us through a little bit about the potential 0:16:27.272 --> 0:16:30.052 actual practice and what kind of solutions do you have 0:16:30.052 --> 0:16:32.040 in mind to deal with the leakage issue? 0:16:33.080 --> 0:16:36.410 Well, I mean, I think um so the leakage, of 0:16:36.410 --> 0:16:39.620 course the engine um leakages something within the sector and 0:16:39.620 --> 0:16:43.090 that's something that engine manufacturers are working hard to address. 0:16:43.090 --> 0:16:46.510 And in fact I think um done right. Um um 0:16:46.520 --> 0:16:50.220 the engines actually have very very little slip or leaks 0:16:50.230 --> 0:16:53.720 and so the the large portion of the leeks actually 0:16:53.720 --> 0:16:57.970 happened upstream right at the wellhead etcetera etcetera. Um 0:16:57.970 --> 0:17:02.270 so there, I think you need constant monitoring technologies to 0:17:02.270 --> 0:17:05.790 know that you're not leaking methane um and and I 0:17:05.790 --> 0:17:10.389 know there are satellite companies etcetera that are looking at this. Again, 0:17:10.390 --> 0:17:13.859 this is out of this is out of our sectorial scope. 0:17:13.859 --> 0:17:16.800 So um we haven't kept track too much except to 0:17:16.800 --> 0:17:20.470 say that it's important um for upstream to manage the 0:17:20.470 --> 0:17:22.869 leak and manage the slip along the way. 0:17:24.810 --> 0:17:27.719 Very interesting. Okay, so I'm not going to use the 0:17:27.720 --> 0:17:31.050 word science fiction anymore. Frontier technology. So these are the 0:17:31.050 --> 0:17:35.369 intermediate solutions. Where do you see the most exciting? The 0:17:35.369 --> 0:17:37.770 biggest potential on the frontier side is 0:17:38.160 --> 0:17:40.479 Yeah. So, I mean, so these would be the zero 0:17:40.480 --> 0:17:43.740 carbon fuels. Right. And and so these would be um, 0:17:43.750 --> 0:17:47.770 they're also called E fuels because E stands for, you know, 0:17:47.780 --> 0:17:51.030 from electrons. And so the the implications, you have enough 0:17:51.030 --> 0:17:55.820 renewable electrons to generate green hydrogen and use that green 0:17:55.820 --> 0:18:00.030 hydrogen as a feedstock to produce either ammonia. So that's 0:18:00.030 --> 0:18:01.410 called the green pneumonia 0:18:01.420 --> 0:18:07.600 or e methanol, ethanol has one added step of complexity 0:18:07.600 --> 0:18:10.149 in its production in that methanol still has a carbon. 0:18:10.150 --> 0:18:13.080 So in order for the methanol to be zero carbon, 0:18:13.090 --> 0:18:18.050 you need either a biogenic source of captured carbon or 0:18:18.050 --> 0:18:21.740 you need direct air captured carbon to make that methanol 0:18:21.740 --> 0:18:24.669 in order for the methanol to be zero carbon. Okay, 0:18:24.840 --> 0:18:27.640 um or it could be any kind of synthetic fuel, 0:18:27.640 --> 0:18:31.620 like a synthetic diesel etcetera, etcetera. So the idea is 0:18:31.630 --> 0:18:35.869 it originates from renewable electrons. So those are the fuels 0:18:35.880 --> 0:18:39.450 of the future. And those are the fuels that would um, 0:18:39.460 --> 0:18:43.220 in the long run allow shipping to completely de carbonized. 0:18:43.230 --> 0:18:46.879 But these fuels aren't available, like, I mean take ammonia 0:18:46.880 --> 0:18:48.530 for for for a second. 0:18:48.710 --> 0:18:51.959 Um, there's very little green ammonia to be to be 0:18:51.960 --> 0:18:56.100 spoken off today. Right. Um and so so we need 0:18:56.100 --> 0:18:59.190 time for the infrastructure to scale. We need time to 0:18:59.190 --> 0:19:01.590 build up that supply chain. We need time for the 0:19:01.590 --> 0:19:05.580 production to scale up so that these fuels are available 0:19:05.590 --> 0:19:08.540 um to the shipping community. But I mean, 0:19:08.560 --> 0:19:11.220 there are lots of end uses for ammonia. I mean 0:19:11.220 --> 0:19:15.760 like fertilizer to Right? And so um yeah, so, so 0:19:15.770 --> 0:19:19.300 so I think um time we need time. And so 0:19:19.300 --> 0:19:21.619 that's why in the interim one needs to think about 0:19:21.619 --> 0:19:24.350 the near term solution as well as the mid term solution, 0:19:24.350 --> 0:19:27.090 which is carbon capture, which I understand will come back 0:19:27.090 --> 0:19:28.389 and talk about in a little bit. 0:19:28.750 --> 0:19:32.670 You wanted to go right there? Yes, I wanna I've 0:19:32.670 --> 0:19:36.050 heard you in other forum talk about carbon capture and 0:19:36.050 --> 0:19:39.550 I've heard some challenges to the notion of carbon capture 0:19:39.550 --> 0:19:41.290 as well. So I went up and read a little bit. 0:19:41.300 --> 0:19:44.030 So there are certain climate activists who argue that, you know, 0:19:44.030 --> 0:19:47.980 carbon capture is expensive. It's energy intensive. It's risky to 0:19:47.980 --> 0:19:52.690 store and risky to dispose um walk us through the 0:19:52.700 --> 0:19:55.590 potential as well as the risks around carbon capture. 0:19:56.320 --> 0:19:57.180 I mean, 0:19:58.420 --> 0:20:01.310 the short answer is what you said is all true. 0:20:01.320 --> 0:20:02.560 But then again, 0:20:03.140 --> 0:20:06.070 what technology doesn't have a drawback, right? I mean, even 0:20:06.070 --> 0:20:09.830 the fossil fuel that we use today has a major drawback. 0:20:09.830 --> 0:20:13.860 And that's uh that's that's it's used basically has caused 0:20:13.869 --> 0:20:16.900 irreparable damage to our environment and yet we use it. Right. 0:20:16.900 --> 0:20:19.440 I mean, so I think we need to go in 0:20:19.440 --> 0:20:19.630 with 0:20:19.690 --> 0:20:23.010 eyes wide open, understand the pros and cons and then 0:20:23.020 --> 0:20:27.570 try to accentuate the pros and then eliminate or mitigate 0:20:27.570 --> 0:20:30.340 the cons. Right? And so so I think that's how 0:20:30.340 --> 0:20:34.840 I think about all technologies and carbon capture and sequestration 0:20:34.850 --> 0:20:36.169 in particular. 0:20:36.400 --> 0:20:40.350 So the idea of carbon capture is um you're going 0:20:40.350 --> 0:20:43.600 to take um C. 02 emissions out. Um And so 0:20:43.600 --> 0:20:48.619 there's point source carbon capture and that's basically carbon capture 0:20:48.630 --> 0:20:53.040 of flue gasses. Um um and so they're the sio 0:20:53.040 --> 0:20:57.090 two is is more concentrated because it comes from flue gas, 0:20:57.090 --> 0:21:00.389 whether it's, you know, a power plant or you know, 0:21:00.390 --> 0:21:00.840 a cement 0:21:00.850 --> 0:21:02.950 plan or a steel plant. So this is on land, 0:21:02.950 --> 0:21:06.200 let's talk about on land first. Um and um while 0:21:06.200 --> 0:21:09.740 the technology um overall is still sort of in the 0:21:09.740 --> 0:21:14.129 demonstration stage, these point source carbon capture technologies would be 0:21:14.130 --> 0:21:17.480 the most mature amongst them. And I think, you know, 0:21:17.480 --> 0:21:19.970 I mean depending on which report you need, it's about 0:21:20.050 --> 0:21:23.150 $100 a ton for you to break even okay for 0:21:23.150 --> 0:21:25.300 such technology. So yes, it's expensive. 0:21:25.580 --> 0:21:29.640 Um the other technology that's sort of not as far 0:21:29.640 --> 0:21:32.800 along is something called direct air capture and that's you'd 0:21:32.800 --> 0:21:36.210 have to capture carbon and and basically separate carbon dioxide 0:21:36.220 --> 0:21:40.300 out from atmosphere. And because it's less concentrated, it's just 0:21:40.300 --> 0:21:42.810 gonna be more energy intensive and it's just gonna cost 0:21:42.810 --> 0:21:46.280 more And they're, the cost is between I mean I've 0:21:46.280 --> 0:21:51.350 heard numbers between $250 a ton to upward $1000 a ton. Okay. 0:21:51.580 --> 0:21:55.889 Um um For shipping we're thinking about carbon capture on 0:21:55.890 --> 0:22:00.790