ZeroNorth Webinar Highlights: why fuel consumption model benchmarking is supporting shipping's decarbonisation mission
22 September 2021
Earlier in September 2021, ZeroNorth hosted a webinar expanding on the news shared this Summer on our working group on fuel consumption model benchmarking.
The group, consisting of eleven participating companies - spanning ship owners, operators and managers, fuel consumption model providers and voyage optimisation software companies – was created to enable us to work together on an industry-wide methodology for fuel consumption model benchmarking to further enhance vessel optimisation.
The expectation is that the new standard will drive an increase in the accuracy of fuel consumption models over time, generating greater cost and emissions savings across the industry.
We wanted to explore the working group and its intentions further, which is why we gathered some of the experts involved in creating and working within it.
Alongside ZeroNorth’s CEO Søren Meyer and Chief Purpose Activist, Lora Jakobsen, fellow working group members George Wells, Global Head of Assets and Structuring, at Cargill, Tobias.W Balchen, Head of Vessel Optimization at Western Bulk and Harshit Tripathi, Business Analyst, at Ultrabulk joined the webinar panel to discuss how accurate fuel consumption models can support shipping's decarbonisation mission.
Our full ‘Fuel consumption predictions: how accurate models can support shipping's decarbonisation mission’ webinar is available to watch here.
“With the IMO’s decarbonisation goals set for 2030 and 2050, long term solutions are now being created by an industry that's realising it must act. However, there's many actions that can be taken today, voyage optimisation being one of them. The revived industry focus on decarbonisation has put voyage optimisation right in the spotlight, thanks to its ability to immediately both increase TCE earnings but also generate a reduction in carbon emissions.” – Lora Jakobsen set the scene for the discussion.
George opened the conversation by speaking on how voyage optimisation is a ‘low hanging fruit’ for immediate action. He argued that its ability to help owners and operators meet shipping’s decarbonisation targets is becoming increasingly understood. However, he also highlighted that to truly understand how well ships perform in different conditions, and how performance changes over time, the quality of the data gathered from ships must be considered, especially when looking to build quick and accurate digital twin fuel models.
Adding what charterers are requesting into the discussion, Tobias spoke on the importance of the cost savings that intelligent vessel routing can unlock by increasing fuel efficiency. He argued that the increased pressure for transparency and reporting from charterers’ customers is trickling directly to the dry bulk sector. He also added that, today, maximising profit and reducing emissions is key for survival of all owners, operators and charterers and that voyage optimisation will be integral in achieving this.
Harshit then expanded on why there needs to be an industry standard for assessing fuel consumption model accuracy; because the key operational consideration for an owner - alongside market and bunker rates - is how much fuel a ship is consuming. The discrepancies in current fuel modelling are based on the fact that there is no single agreed definition for what “accurate” means. The first step, he argued, was for the industry to come together and determine what accuracy really means in the context of fuel modelling.
Søren agreed with Harshit. He added that without an agreed standard, everybody will be able to claim that their fuel models are 95 % to 98% accurate. He concluded the webinar by discussing the strength of industry partnerships, such as ZeroNorth’s working group, in tackling these challenges in a way that truly supports maritime decarbonisation.
Questions and answers
After the panellists discussed the meaning behind the working group, they took some time to answer questions from the audience.
Firstly, the audience started off simple, asking the panellists why it was important that the working group had been kickstarted earlier in 2021.
Tobias explained that consumer demand for more sustainability in the supply chain was trickling down from larger corporations to ship owners and operators, with some of the larger charterers asking for more granular reporting on CO2 and other emissions, as well as for optimised vessel routing. These demands require action from the shipping industry that working groups such as this can generate.
George spoke of the importance of working groups in building up confidence for the wider industry. Initiatives like the group help key stakeholders to determine that they are on the right path and that the tools that are supporting the industry to decarbonise are as accurate as possible.
Next, the panellists were asked to share their thoughts on how the working group can be impactful if vessels have similar fuel curves.
Harshit responded to the question by adding that while a sister vessel may have a similar design, the external factors influencing their voyages, usage and reporting means that the fuel curves are very different, requiring a working group to assess model accuracy.
Seconding this, George and Tobias agreed, adding that using digital twin models offers the industry a good way to compare and benchmark vessels against each other, but that the unique circumstances of individual voyages require smart, data-enabled solutions to generate actionable insights.
Next, the panel were asked to share their thoughts on how initiatives like the working group are helping the industry to meet its decarbonisation goals.
Highlighting the importance of standardisation, Søren answered that if the industry is to alleviate the need to debate around the measuring itself, it can instead focus its attention on improving fuel models and the accuracy of the model interactions.
The final two questions took a different tack, focusing on how fuel models can help in short term time charters and also how charterers and cargo owners can be brought into the process of voyage optimisation in general.
To the first point, Harshit stated the current challenge with optimising short or spot charterers is that there is very limited data an operator can use to optimise. This amplifies the importance of having a fairly reliable fuel model at the outset, to enable owners, operators and charterers to determine the optimisation actions they can take.
Speaking on the importance of the reliability of these fuel models, Søren commented that the working group’s standard will ensure that the sector has a common language around what is a reliable fuel model, meaning that anyone that is using a fuel model will have the same basic understanding. This would pave the way for better collaboration and trust between charterers and owners, as they understand reliable and effective voyage optimisation from the same baseline.
On bringing charterers into the room, Søren spoke on how the current misalignment between key industry stakeholders was leading to there being a lack of incentive to optimise. He stated that standardisation would be important for bringing charterers onboard, as a common understanding of how the data is measured and determined would in time lead to greater trust and understanding between all parties involved in voyage optimisation.
We hope that you enjoyed this recap of our webinar on the fuel consumption working group. We’ll be sharing more information about the working group’s latest initiatives and focus areas in the near future, so be sure to follow us on our social channels to keep up to date.