Danish Shipping pushes for regulatory frameworks that not only incentivise sustainable practices but also foster innovation
“The green transition is at the forefront of our minds in this industry, and it underscores everything that we do, because it’s the right thing to do.” That was the message from Anne Steffensen, CEO of Danish Shipping, when she spoke to a room of assorted reporters in Copenhagen in April.
Steffensen, who was appointed as chairperson of the organisation in 2022, was launching a series of presentations from companies focused on Denmark’s aims to put decarbonisation at the forefront of its agenda for its shipping industry. The Danish maritime industry’s trajectory toward decarbonisation emerged as a central theme at the event and Steffensen’s discourse highlighted the urgent imperative to mitigate greenhouse gas (GHG) emissions, emphasising that an impressive 80% of tonnage in the Danish shipping sector is on the brink of transitioning to green fuels. This notable commitment extends beyond industry giant Maersk, with numerous Danish shipping entities, such as bulk carrier TORM, actively investing in alternative fuels, indicative of a collective determination to steer through the green transition.
The shipping industry stands as Denmark’s largest export industry, surpassing all records in 2023 with exports exceeding DKK500 billion. In 2022, Danish shipping accounted for a staggering 27% of Denmark’s total exports, underscoring its significant contribution to the nation’s economy. Despite a slight dip in the number of Danish-flagged ships over that year, primarily due to divestment by shipping companies, the fleet remains considerably larger than a decade ago. Anticipated developments such as the introduction of Danish-flagged ships powered by e-methanol signify ongoing advancements within the industry.
At the core of the Danish maritime industry’s attempts lies an imperative to sustain competitiveness in an ever-evolving global landscape while still showing it can put necessary safeguards in place to stay in the lead of tackling climate change. Steffensen articulated the industry’s solid commitment to embracing sustainable practices and attempts to position Denmark as a country innovating in maritime environmental stewardship. This is highlighted by a goal set by the country to achieve carbon neutrality by 2050.
Robust regulations and global collaboration
Central to this transition is the pivotal role of robust regulations and global collaboration. Steffensen underscored the indispensable need for regulatory frameworks that not only incentivise sustainable practices but also foster innovation. “We are working very hard to provide the leadership in our community and this association, together with our members, to make sure that we get the right regulation in place for this transition, this revolution to happen in the right way,” she noted.
Danish Shipping also actively engages with regulatory bodies, notably the European Union, advocating for policies that strike a delicate balance between environmental imperatives and industry viability.
However, amidst the industry’s ambitious green goals, concerns loom regarding competition for new fuels from other sectors. Access to sustainable energy sources emerges as a critical determinant of the shipping industry’s decarbonisation strategy and Steffensen stressed the imperative of ensuring equitable access to green fuels, warning against disparities that could undermine the industry’s sustainability objectives.
Addressing queries about competition for new fuels, Steffensen acknowledged the multifaceted challenges confronting the industry. “The big problem in what we are doing there is of course that we don’t have enough fuels. And I think that’s no big secret,” she said.
The imperative to secure access to sustainable energy sources amid growing demand underscores the industry’s urgency to collaborate with governments and fuel producers. Steffensen emphasised the industry’s readiness to embrace renewable energy sources, provided they are readily available and economically viable.
Navigating geopolitical complexities, Demark remains vigilant in safeguarding vital maritime routes crucial to global trade. Steffensen highlighted collaborative efforts with international stakeholders, including the British government, to address security concerns in regions such as the volatile Red Sea. Disruptions in maritime routes not only jeopardise supply chains but also pose risks to the safety of seafarers and vessels and the country’s proactive engagement underscores its commitment to fostering stability in crucial maritime corridors. Moreover, concerns regarding piracy attacks in regions like the Indian Ocean underscore the complex operational landscape within which the shipping industry operates.
Setting new benchmarks
Denmark’s focus on environmental protection extends beyond mere compliance with environmental regulations; it aspires to set new benchmarks for sustainability within the global maritime sector.
The country has recognised the ban on the discharge of scrubber water in Danish waters. The ban, which was reached following a broad political consensus, prohibits ships sailing through Danish waters from discharging wash water from smoke-cleaning systems. The ban is notable as scrubbers have become widespread following stricter sulfur regulations in 2015, and especially after global sulfur regulations took effect in 2020.
“I am pleased that the politicians have chosen to listen to our request to introduce a sensible phase-in period, so that the shipping companies that have invested a lot of money in complying with the rules and reducing their sulfur emissions with a scrubber have time to adapt to a new reality,” stated Nina Porst, director of Climate, Environment and Safety at Danish Shipping.
The sector’s commitment to green shipping and energy is evident in ambitious reduction targets set in the final GHG strategy of 2023, aiming to align with the Paris Agreement. Additionally, efforts to increase Danish shipowners’ contributions to global offshore wind capacity and carbon capture projects reflect a commitment to environmental sustainability.
Maintaining and developing a robust supply chain of competencies remains a priority, with initiatives aimed at providing at least 400 internships at sea annually to cater to the growing Danish fleet and offshore sector. Moreover, Danish Shipping remains dedicated to addressing members’ day-to-day challenges and monitoring and improving Danish conditions to support the continued growth of the merchant fleet and shipping industry.
Significant challenges ahead
Steffensen’s presentation in April underscores Danish Shipping notable attempts to place itself at the forefront of a transformative journey towards sustainability. However, while its initiatives are commendable, there are challenges and limitations ahead. Despite its efforts, achieving complete decarbonisation poses significant technical and economic challenges that may require further innovation and investment. A current lack of available fuels and ships able to run on alternatives could prove a sticking point.
However, Danish Shipping’s proactive approach and commitment to collaboration offer valuable lessons for the broader maritime community. By addressing these challenges head-on and fostering dialogue and cooperation, Danish Shipping sets a positive example for the industry stakeholders moving forward.
