A NEW ERA FOR TANKER SHIPPING

Panel Discussion Speaker Highlights

9th Capital Link Maritime Leaders Summit – Greece

This panel discussion at the 9th Capital Link Maritime Leaders Summit on June 3, 2024, in Athens during Posidonia Week, brought together leading shipowners to explore the challenges and opportunities in the tanker shipping sector amid the energy transition. Key topics included the need for better infrastructure, availability of alternative fuels, a stable regulatory and geopolitical landscape, and enhanced collaboration between all stakeholders on technology adoption and energy transition costs. Against the backdrop of the looming uncertainty, the focus remained on maintaining energy security and delivering stakeholder returns.

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Moderator: Ms. Elina Papageorgiou , Vice President – Greece & Cyprus - Lloyd’s Register

Panelists:

? Mr. Svein Moxnes Harfjeld , President & CEO – DHT Holdings (NYSE: DHT)

? Mr. Ted Petrone , Vice Chairman – Navios Maritime Partners (NYSE: NMM)

? Mr. Ioannis Alafouzos , Founder, Chairman & Director – Okeanis ECO Tankers (NYSE: ECO) (OSLO: OET)

? Mr. Fragiskos Kanellakis, Executive Director – Alpha Bulkers / Pantheon Tankers / Alpha Gas

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Highlights:

• Energy Security and Transition: Tankers are crucial for energy security, and owners are planning for the next 20 years amidst the energy transition, balancing emissions reduction with mature systems and technology.
• Future Fuels: Studies show new fuels will be expensive, scarce, and require significant energy to produce, highlighting the need for energy security before transition.
• Market Dynamics: The tanker market is strong, but new fuels are costly and not widely available, requiring cost distribution across the supply chain and investment in temporary measures like carbon capture and LNG ships.
• Efficiency and Infrastructure: Focus on modern, efficient engines and safest routes; investment in infrastructure and dual fuel engines is necessary, along with rigorous crew training to handle new fuels safely.
• Regulatory and Geopolitical Challenges: Need for clearer regulations and stable geopolitical conditions, with a call for stakeholders to collaborate on cost distribution for green transition efforts.

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Link to Replay:

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Panel Discussion Speaker Highlights

Ms. Elina Papageorgiou, Vice President – Greece & Cyprus - Lloyd’s Register, stated: “Tankers play a key role in energy security and tanker owners are considering their options for the next 20 years of energy transition. Whilst the role of tanker shipping is assured during this period, costs associated with emissions reduction must also be countered with maturity of systems, people and technology for a decarbonised future.”

Mr. Svein Moxnes Harfjeld, President & CEO – DHT Holdings (NYSE: DHT), stated: Last year, we did a comprehensive study with the help of two research firms, trying to better understand what fuels we’ll use in the future, what’s the cost to build production facilities, their geographic location, as well as how to deliver fuels to the market which other sectors will also compete for. Also, the energy required to produce these new fuels makes for a complex picture. The two firms worked on this task, unaware of each other, for ten months. Their conclusions were similar: the new fuels would be very expensive, very scarce in volume and availability, and there can be no energy transition without guaranteeing energy security first. Therefore, any attempt at radical change is unrealistic.

Customers that are interested in stimulating green investment offer more long-term partnerships. As a tanker company in NY, I’ve only had one conversation about ESG recently. That being said, high-level of governance is important for stakeholders. The problem is that we’re asking European citizens to reduce their living standards. It’s a tall order for politicians to say “vote for me to be poorer”. Or to convince people in developing countries that they won’t reach our living standards for environmental reasons. More pragmatic solutions are missing from their conversation. As Margaret Thatcher famously said, “socialism is great until you run out of other people’s money”.

Mr. Ted Petrone, Vice Chairman – Navios Maritime Partners (NYSE: NMM), stated: “The tanker market has been on a roll for a while. With regards to new fuel, they’re both expensive and not readily available. We must be able to spread their adoption cost across the supply chain. Meanwhile, one could invest in carbon capture or LNG ships, but we need the next fuel to get us to carbon zero. We need a fundamental change in our way of thinking; stakeholders, including oil companies, need to step up and figure out who’s paying for what. That’s the conversation that’s needed today.

We’ve got 26 new buildings coming in, with less of a carbon footprint, and we’ve sold the oldest ships of our fleet. The Chinese are the ones taking over, since the house market crashed and workers were moved over to shipyards, in an effort to keep people employed.

In shipping, until now, there never was any first mover advantage. This time things looks different but the parameters should be the same worldwide, not just in Europe.”

Mr. Ioannis Alafouzos, Founder, Chairman & Director – Okeanis ECO Tankers (NYSE: ECO) (OSLO: OET), stated: “I haven’t really seen any alternative fuels capable of promising a bright future. There’s still a lot of confusion, so modern conventional engines are the way to go until we see new developments. The energy that’s required to produce alternative fuels is immense and there’s no infrastructure work being done that would suggest that these new fuels are just around the corner. I remain quite pessimistic and skeptical about them.

The simple road we’ve decided to take a few years ago is to have the best possible engines with the smallest emissions, going through the safest routes, while we order from 1st class yards in Korea and Japan, which have a slight edge compared to China. The results of this young and efficient fleet have proven us right. In the end, our goal is to maximize returns for our shareholders. There’s quite a bit of hypocrisy involved in the green transition, as the world seems to be ignoring major polluters, much worse than shipping, such as agriculture or textiles.”

Mr. Fragiskos Kanellakis, Executive Director –Alpha Bulkers / Pantheon Tankers / Alpha Gas, stated: “We’ve expanded and renewed our fleet. We hope that this decision helps us navigate the difficulties we’ll be facing in the next years. The younger the vessel, the greener the environmental impact of the ship. Charterers always want safe and efficient vessels with the lowest possible consumption. Some of them are highly focused on reduced carbon emissions and specifically ask for scrubbers in their specifications. There’s need for more investment in infrastructure, as well as dual fuel engines. New fuels can cause safety issues around unfamiliar or untrained crew, so we invest a lot to enforce the company’s safety culture, through training courses. Greek shipowners are taking the lead, but we need clearer rules and a less volatile regulatory framework and geopolitical situation.”

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9th Capital Link Maritime Leaders Summit – Greece “Dashing Ahead - Leadership in Action”

Monday, June 3, 2024 | Four Seasons Astir Palace Hotel, Athens, Greece

In Partnership with ABS. Part of Posidonia Week.

For more information, visit here

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