Detect hidden emissions

Albrecht Grell: First of all, thank you for inviting me to be here today. It’s always a great opportunity for us to join in discussions with you. I’m Albrecht Grell and I’ve been the Managing Director of the Hamburg start-up OceanScore for 18 months now. We’re situated here in the beautiful port city of Hamburg, right around the corner. OceanScore develops digital solutions, primarily for the shipping industry, to help with managing various regulatory requirements relating to sustainability and emissions.

Tobias Bohnhoff: I’m also very happy to be here. I’m Tobias Bohnhoff, Managing Director of ShipZero. Our company is also based in the Speicherstadt historical warehouse district and we are completely dedicated to the topic of door-to-door emissions management in the logistics industry, i.e. measuring greenhouse gas emissions for each consignment for the forwarding industry and for logistics service providers. And I’m looking forward to an interesting conversation today!

Moderator: Two great start-ups and HHLA, all in the Speicherstadt historical warehouse district. Is this a hotspot for start-ups?

Albrecht Grell: Well, for our part, I’d say yes, absolutely. We’re headquartered at the Digital Hub Logistics, in which HHLA is also a partner. The building houses a total of 90 start-ups. It’s not only a great opportunity for using fantastic office space and the excellent infrastructure – the networking opportunities with other companies are also extremely valuable to us. That’s why we’re very, very happy to be where we are and I couldn’t imagine a better place to be.

Tobias Bohnhoff: That’s how I see it too. We’re also part of the Digital Hub Logistics and have been since 2020, actually. Back then, we started out with a very small team, including as tenants of a co-working space. We’re now a team of 50 and are still working at our old location in the hub: We’ve been able to adopt some of the old space as office space. It’s incredibly atmospheric to have your offices in such a venerable warehouse building.

Moderator: Tobi, can you explain what sets ShipZero apart from its competitors? You measure emissions along the entire transport chain, is that right?

Tobias Bohnhoff: That’s right. The term “emissions” is always associated with ways of calculating them. That’s to say, with an emissions calculator. That’s one central task we take care of with ShipZero. Firstly, we conduct a greenhouse gas impact assessment for an individual consignment or logistics process on behalf of a company, and prepare the impact assessment so it meets the various regulatory reporting requirements already in place, and those in the pipeline. And secondly, we exchange data with our partners and clients. There are, of course, lots of other companies involved in this market. How we stand out is by offering a primary data strategy, right from the start.

That means that we focus on obtaining and converting energy data directly from logistics processes, telematics, fuel cards and refuelling. On the other hand, the topic of data management is also involved: We see ourselves as a quality management system that monitors the process from end to end for the customer – from data collection, processing, standardisation and quality assurance to conversion, analysis and reporting. That’s what sets us apart in the industry.

Moderator: Let’s bookmark the term primary data. We’ll come back to that later. But first of all, let’s ask Albrecht: Your focus is more on the maritime industry. And that’s how you distinguish yourselves from ShipZero.

Albrecht Grell: That’s right. I find Tobi’s door-to-door approach with emissions very interesting. However, we are the ones who focus on the maritime industry, i.e. on emissions from shipping. That’s our focus and where we believe our greatest strengths lie. We pursue various business models. But currently, we are seeing that the shipping industry in particular is under extremely high pressure from European regulations, for example due to participation in carbon credit schemes and the FuelEU Maritime regulation.

These regulations were made in good faith and are all justified. But they affect an industry that is very, very fragmented and is barely able to keep up with the speed of regulatory change as it is. For this reason, we help our clients by providing digital solutions – so, with software that makes these processes clearer and creates transparency. Like ShipZero, we are also heavily involved in the data business. For us, that’s really heavily focussed on the maritime business, with primary but also secondary data.

So, we primarily work for the shipping companies. However, we also see that there is a great need for interaction between shipping companies and banks, shipping companies and insurance companies, as well as shipping companies and transport logistics companies who want to exchange emissions data. And that’s where we also provide solutions so that maritime emissions in particular can be gauged more accurately.

Moderator: Let’s talk about standardisation. How can you make the data comparable in the first place? But we’ll come back to that later. First, let’s ask ourselves the fundamental question: Do the transport and logistics industries really result in an above-average proportion of harmful carbon dioxide, nitrogen and other emissions? Do you see it the same way?

Albrecht Grell: The figures show that around 25 percent of all emissions are the result of transportation. Shipping accounts for around 2.5 percent, so only one tenth of these emissions. This is still a lot but you also have to recognise that shipping, with its 2.5 percent of the emissions, transports 90 percent of all goods globally. So, it’s a very efficient means of transportation. But, of course, it would be even better if it could reach 0 percent emissions. And that’s what we’re all working on.

Moderator: In other segments of the transportation business, the proportion is even higher.

Tobias Bohnhoff: I can confirm the figures. But I think for freight transport, it always depends on which studies and sources you base them on. Between 6 percent and 8 percent of all emissions actually come from the industry. And if you include the movements, which we also include in our calculations, in warehouses, transshipment hubs or terminals, you come to between 10 percent and 11 percent.

The key point is that after the major contributors like energy consumption in buildings or manufacturing, ours is the only industry to have not been successful in reducing emissions in the past 30 years – since we’ve been measuring these benchmarks. And why? Because volumes have just kept getting bigger, particularly in the maritime setting. That means there’s a rebound effect – or cannibalisation. In simple terms, everything that has been poured into the system in terms of efficiency measures – better engines, better exhaust filters, etc. – is swallowed up by the fact that more and more goods are being transported around the world.

And perhaps I can say another few words about other modes of transport for context: We tend to look at the figures from the perspective of road transport. After all, 60 percent of emissions are produced on our roads. But this cascades downwards because other modes of transport are much more efficient. With the exception of air freight – which is far worse but thankfully only accounts for a much smaller proportion of the volume. This means that road freight is our focus. One pithy phrase you hear in logistics is: Every product that you buy or touch or have in your home has, at some point, seen the inside of a truck. There’s a lot of truth in that.

Moderator: I once heard that air freight results in 100 times more emissions than shipping. Can you confirm that?

Albrecht Grell: I don’t have those figures to hand. But if I think about the sheer scale of it, I can well imagine that it’s true.

Moderator: There are various ways of calculating all this. But we’re probably all agreed on the fact that our industry has not really grasped over the past few years that it needs to slash emissions – which is essential. What do you both think is the actual driver of decarbonisation?

Tobias Bohnhoff: I don’t think there’s just one driver or driving force behind it. Thankfully, there are lots of different influencing factors that all come together. One particularly prominent one is the topic of regulation. Because it’s new, because it’s mandatory for lots of companies, and because it throws up a lot of questions.

I personally believe that companies are now showing that they are taking a lot of initiative. Particularly when I speak to family-run logistics companies who want to transform their business models because they know they have been built on 100% fossil fuels in the past. And if we follow the science and know that this energy transformation is here, it’s unavoidable that I’m now going to be faced with a major energy revolution if I want to maintain my business model and my company. As a result, there is more and more impetus to change.

This is flanked, of course, by pricing mechanisms that tax greenhouse gases more heavily. And this takes us very neatly to what you are working on at OceanScore. I think this mixture of price, regulations and reporting requirements, and customer convictions, including consumer awareness, this is the triad driving the significance of this whole issue forwards at the moment.

Albrecht Grell: I’m very grateful that you also just mentioned this entrepreneurial approach. Lots of people dismiss that and say: “Oh well, they’re only doing that because they have to.” I see it a lot. The shipping industry is characterised by family-run businesses – there are so many of them with children or grandchildren and who want to take the initiative and really make the effort to make the industry cleaner.

The regulatory situation and cost framework can’t now stand in the way of this. And the EU is actually introducing regulations that support the right measures being put into place. I think that the most extreme example of this is the FuelEU directive, which will come into force on 1 January next year and determines the emissions per energy unit that I use on board. This directive charges each tonne of CO2 over the established limit with a fee of EUR 650. It’s a lot of money, all of a sudden. And that will have to lead to real change – not in the next two years because the limits aren’t so tough yet – but certainly from 2030.

Moderator: Do I understand it correctly that these regulations only apply to the EU? We saw this with the IMO guidelines, that certain areas like the North Sea, the Baltic Sea or the navigation of the River Elbe have specific regulations, so ships can only be powered by marine diesel, for example. If the EU puts it in place for a particular area, that must have an effect on the competition?

Albrecht Grell: I don’t know how it is in other areas. But in terms of shipping, the EU’s done really, really well. It said: No matter where the shipping company is based, where its headquarters are, who it belongs to – if your ship arrives at a European port, you need to be compliant. That means there’s no unfair competition because everyone is treated the same. If I want to transport goods from A to B and a European port is involved, everyone is subject to the same rules.

Moderator: What types of transportation does that apply to then? Just for the cargo being brought to Europe? Or are you on the system wherever you enter a European port?

Albrecht Grell: For all ships arriving from anywhere outside of Europe, it’s counted from the last port before arriving in Europe to the last port in Europe. When leaving, it’s counted from the last port in Europe to the first port outside Europe. And all transport routes within Europe are also counted. If I have a service provider operating container ships between Dubai and Rotterdam, everyone pays the same CO2 prices, the same fees, if their emissions are over the threshold.

These regulations have probably even led to a certain competitive advantage for Europe: The European shipping companies – I’m looking around in Hamburg, for example – are up to date with the regulations, they are familiar with the EU’s systems, are better prepared than many in Asia or South America. That means that, because they’re better prepared, they can be more proactive and make cost savings compared with those who are not so quick off the mark. So, I think the EU’s done pretty well with that in my opinion.

Moderator: But that’s nothing to do with what’s known as the ETS, is it?

Albrecht Grell: Yes, it is. The ETS, or emission trading system, is precisely this system. All emissions arising on journeys to Europe, in Europe or from Europe, are calculated. No matter who they are emitted by, everyone has to pay. Now we can say: But, what about a shipping company that travels to Europe, leaves again and ignores it – that can happen. But we don’t want to put the logic of an entire regulatory framework into question on the basis of one-off cases. And if it does happen, the company will soon get a bill landing on their desk. If they don’t pay the fee, they will no longer be allowed to use European ports. So there is a certain degree of risk.

Moderator: That’s already pretty drastic.

Albrecht Grell: Yes, that’s true.

Moderator: So, you’ve probably got a lot to do, all of a sudden? The deadline is coming up and there are bound to be some companies that approach you who need a little support with this or that...

Albrecht Grell: We actually have our hands very full at the moment. Which is great, of course. The emission trading system, or ETS, has been in force for the shipping industry since 1 January this year. We can now look back on nine months of very hard work. And it’s not over yet because there are lots of companies who are a little late to the game coming up to us and saying: Oh, we need to come up with a solution. And in five months’ time, the FuelEU initiative will be coming into force, where the carbon intensity of energy on board is measured and taxed. That’s when the next big wave will hit. We can’t complain that we don’t have enough to do and you [at HHLA] are building this up very systematically and fundamentally. Of course, we are highly driven by the regulatory framework. It’s just one wave after another. We always need to be ready when they come. And that’s why we’re all in overdrive at the moment.

Moderator: That definitely illustrates that rules and regulations can actually have an impact. Or are you more sceptical? Not every law or rule brought into force has the effect that the politicians originally intended.

Albrecht Grell: What the EU’s doing here – and I’m singling out the EU on purpose – is really very, very well thought-out. There’s a lot of sense in it. The challenge is that it affects an industry that is very fragmented. One company owns the ship, another manages it, another operates it and another sells it. That’s our problem. The regulations per se are fantastic but the shipping industry isn’t designed for it to work really well. That’s our business model: to build this bridge for the shipping industry so that it actually does work really well.

Moderator: Let’s look at this process from the perspective of ShipZero. If the managers of family-run companies, which tend to be very small in Germany, come to you, what are the problems you help them with?

Tobias Bohnhoff: The problems we manage are very wide-ranging because our customer base is also very diverse. If you look at door-to-door logistics, you have at first glance five main carriers. Those are shipping – which has a very, very high volume. Then road transport. But also inland waterway ships, rail and air cargo. All of these areas, and individual industries, are subject to regulations that are just as specific as those above. So I’m happy that we are able to look at it from a macro perspective a little more.

And holistic data management and the provision and processing of data, of course. So, simply transparency within the company, preparing for it or managing company processes in such a way that we can handle it. I think that’s one of the areas of action that is our biggest driver, going by capacity. Of course, there are lots of questions about the technical aspects of regulation. What will I have to deal with? What do I need to do? Which processes will be involved? One thing that unites all companies at some point is: We understand that the topic of sustainability is something we will need to manage in future. But we just don’t have the processes in place to do so at the moment.

Moderator: So, consulting work regarding how companies can access the data they need. You not only support them by providing software – you first of all need to create the requirements?

Tobias Bohnhoff: Yes and no. It’s a very good question because, at its core, our product is a data hub. It is connected to various software workflows that appear like a piece of software to the company. However, it’s not just a plug-and-play model that offers immediate access to a sustainability management tool within the company. That wouldn’t be realistic. And so, the intention isn’t what I read between the lines in regulatory texts such as the CSRD, for example. Instead, this regulation and these reporting requirements for companies are actually saying to us: Companies, you need to really deal with the topic of sustainability. Integrate it into all of your processes, create a quality management process to handle this issue. What impact does your company and its business activities have on the environment? Factor it in and transform yourselves into a business model that uses fewer resources – particularly fossil resources.

That’s not something where you can just double-click somewhere and you have your web interface and everything immediately becomes clear. It’s a change process within a company. Despite this, our core area of business is clearly a platform model, a data business, and the consulting part of this, we try to standardise it as much as possible and network companies with one another. I think networking is a very, very important buzzword that characterises our business model on the one hand but also indicates how we want to approach the problem: data exchange and the exchange of experiences works better when companies work together. That could take the form of benchmarking. Or transparency. Which companies and, above all, which sub-contractors do I actually work with, and to what extent? That’s one statistic that often baffles people. We might be familiar with it from financial accounting. What rates do I actually pay?

But that doesn’t necessarily correlate to what actually appears on the emissions side. Because I have different types of transport: I have inner city transport routes and I have journeys with a fully laden 40-tonne truck – those have very different carbon intensities. That gives you an idea, for example. Or if we look at it from a more global perspective: Which lanes actually have the highest impact for me within the company?

Moderator: You briefly mentioned the topic of price. At HHLA, we have a certified product, HHLA Pure, which offers carbon-neutral transport. I spoke to the manager and discovered that some companies are not prepared to pay more for this carbon-free option. Are logistics companies too greedy?

Tobias Bohnhoff: It depends what carbon-free means. We touched on the topic of standardisation at the beginning. There’s a new ISO standard, ISO 14083, that governs CO2 calculations in our field and this provides certain prerequisites or guidelines in terms of what you can disclose and how you can calculate your emissions. Offsetting, so, investing in reforestation projects in the Global South, for example, is explicitly not accepted as a way of offsetting transport emissions generated here in Germany. You can still declare it as a mitigation measure but you can’t just reduce your footprint by this amount.

So, it really depends what kind of product it is. We are intensively dealing with the topic of book-in claims or insetting. This means I have a sustainable intervention – for example, an alternative fuel source or electrification – that I intend to integrate directly into my transport network, such as into my fleet, and this means I will be lowering my carbon emissions sustainably. So, over the long term and not just with a single offsetting process. That’s a product that we get completely different feedback from our customers for because it is absolutely feasible to charge a premium price for this with the relevant documentation and transparency. Having said that, it does really depend on the fact that you can prove that it is certified end to end. Standards have skyrocketed in recent years.

Moderator: For rail, there are several products that also claim to be carbon-free – is there already a shipping line that offers such a product?

Albrecht Grell: Particularly in the field of biofuels, clients are increasingly demanding carbon-neutral journeys. To date, these only make up a few percent of global transport volumes – and only in the container segment, where I have a consumer at the end of the transport chain who’s interested. In the bulk goods industry, it’s not a topic yet but it will have to start somewhere. And, remarkably, a few months ago, we got a call for tender from Ikea and Amazon that said: We’re looking for a carbon-free maritime shipping route that can get so many thousands of containers from A to B. They really stated it clearly. And by doing so, they force logistics companies – in this case, Hapag Lloyd, who won the bid – to stock up on carbon-neutral fuels.

This brings me back to my colleague, Tobi: What is carbon-neutral? There’s a lot of discussion about this. Today, we’re delighted that biofuels, which produce less emissions, are even available. But it’s the right way forwards – and it starts with container shipping. With regulatory pressure and pressure from people like us and you, who make it clear for all to see what the difference is, this area is going to gain momentum fast.

Moderator: Now I want to come back to the primary data. Tobi, what are the kinds of data that you need? Where do you get them from? Do you do data mining, or do you sometimes have to work with assumptions in order to map a transport chain?

Tobias Bohnhoff: There’s quite a bit to say about that. Generally speaking, there are three levels from the Smart Trade Center. That’s an NGO in Amsterdam that works very intensively with the topic of transport and greenhouse gas accounting. They defined a triad. First is the simplest: I have almost no information about the transport. I might know how many containers are travelling from where to where; so I have the route but I will need to make a whole lot of assumptions in order to calculate a CO2 value or greenhouse gas value. That’s the “Default” level. So, I have to factor in a lot of global averages so that I can come up with a figure.

Second, I can say: OK, I might have more information in my system. I know exactly which ship was used. I also know which forwarders were used before and afterwards. Using the product or cargo mass, I can also derive what size vehicle that is. That means, I can set more and more smaller parameters in order to improve the accuracy of these assumptions. We work with this second level a lot because of course not all data is always available to us in the third level.

And that data is, thirdly, energy consumption data, i.e. quantities, volumes or weights of fuel that I can convert using its chemical and physical properties to derive an energy value in terms of how much CO2 and greenhouse gas emissions it produces. That’s a fixed amount. It might depend a little on temperature and density but otherwise it’s very, very precise. And I’m trying to really use this second level more.

That means, I feed a type of survey or questionnaire with a sample into a data set. By doing so, I try to measure as much data as possible. That can also be done using vehicle sensors. Particularly in road transport, one of the main channels for us to use is vehicle telematics, which has been integrated into vehicles in western countries since 2017, and to make calculations based on the manufacturers. The same goes for fuel cards, including court petrol stations, which can be integrated. There are then also reporting schemes for other carriers, such as the Clean Cargo Initiative for maritime transport. There, too, we could also theoretically get down to the level of the individual vessel. Here, it’s often down to the willingness of those involved as to whether this data is actually shared, or allowed to be shared, and also whether data, structures and architectures are even available among the companies involved. We’re also involved in some projects in order to provide this.

Moderator: The shipping companies probably don’t all have the same system, right?

Albrecht Grell: There are certainly points where all these data flows come together but they are not all publicly available. The problem is with shipping: It’s all very private, to put it nicely. There, our emissions trading solutions and FuelEU provide us with primary data for well over 1,000 ships every day. We obtain precise data that is then verified by the classification bodies. So we know exactly what happened with each vessel. That gives us a whole lot of primary data because we track the ships via satellite.

We know what engine is in which vessel. We know the basic emissions values for this engine, we have the meteorological data and data about currents. That brings us back to what Tobi says: Of course, there is a model somewhere, we map the entire global fleet with over 100,000 ships. But we have an incredible amount of primary data that informs this model. This puts us in a position to be able to map maritime emissions – and I’m only talking about maritime here – with exceptional granularity and precision, away from averages and assumptions that result in A to B always equals X. That’s our maritime method and that’s why we explicitly work with partners that are also specifically interested in the maritime sector.

Moderator: So, you take actual measurements. It’s not just a bit of AI behind it, a great algorithm that then extrapolates a value. You actually know what the consumption of a vessel is with a particular engine on a particular route?

Albrecht Grell: To put it precisely, customers that use our solutions have to submit reports several times a day. Event reports as they’re known in shipping. And they state precisely what the ship did, where it travelled from and to, what fuel it used and how much, etc., etc., etc.

These reports are collated and once a year, when they come to Europe, these ships are verified automatically. We have access to this data. We don’t sell it of course, but we can use it to feed our models. Just like Tobi says. And then we know where every ship in the world is and how fast it’s travelling because we can track them via satellite.

We know the engines because we have the ships’ construction data. We know the consumption values for these ships at certain speeds and can put all this together to result in these models: level 2, but with a lot of information from level 1. And that puts us in a unique position in the maritime sector, including with regard to the Clean Cargo Working Group.

Moderator: At HHLA, we are at the interface between the maritime and overland transport sectors – and we are aware that we play a major role here. Here in Hamburg, in Altenwerder, we operate the first ever carbon-neutral terminal. The containers are transferred to rail, inland waterway ship and road. How do these kinds of hubs influence your calculations? Has either of you got an idea about that?

Tobias Bohnhoff: It’s actually one of the most exciting questions that has driven us this year because the ISO 14083 I mentioned earlier makes it necessary to be able to factor in these intermediate steps in a door-to-door consignment report – whether it’s for a parcel or a container or whatever. To date, the whole thing has focussed on the freight moved – a truck, a ship, etc. – but now it’s also highly relevant and mandatory to include stopovers in the consignment’s footprint.

Those stopovers can take many forms. In overland transport, it might be a transshipment centre or warehouse. In maritime transport, it might be handling at the quayside, so, movement within the terminal. Of course, that also means that we need to address entirely new data points, i.e. based on the consumption data, energy data, that a terminal generates. That’s an option that can reveal decarbonisation effects very quickly these days. If a company asks itself: Where’s my greatest leverage? Or where is my money best invested in terms of my decarbonisation budget? Today, it’s much easier with green electricity, stationary solar power, sometimes with wind, at least in comparison to the many complications that we still have with decarbonising moving freight and still achieving fast results. So that’s a topic that is at the forefront at the moment.

Albrecht Grell: I think it’s great what you’ve done here. It’s a pioneering model for lots of other ports, I hope. In the context of this conversation, I think it almost falls short of the whole picture, however. If I look at the whole port with all of its emissions, then the onshore emissions – and you’re only looking at those if you say it’s carbon-neutral – are under-represented. The same goes for how the port interacts with ships: Is there shore-side electricity or not? Do they even use shore-side electricity? It is appealing enough? How do they manoeuvre in the port, what’s the approach like? Are there long waiting times, idle times, so that there are false speeds on the approach to the port? A lot of that is withheld.

Moderator: I wouldn’t put it quite like that. You might be familiar with HVCC, the Hamburg Vessel Coordination Centre. At HHLA, we are already attempting to optimise ship calls. Whether or not shore-side electricity is available or not is not something we can influence. But Hamburg’s doing pretty well in this regard. Of course, there’s still loads to do and I think it’s great you are pointing that out.

Albrecht Grell: HVCC is also doing great work! I think it’s a benchmark for many others. I only see that we work together with ports, which allow us to give them the data for all quayside emissions in the port. So, what happens in the berth? What happens when the ship’s manoeuvring? What happens when ships enter and leave the port? And I think, once we’ve taken the first steps that you have already taken, the next logical step is to say we need to broaden our perspective and actually look at all of the emissions that the port generates. You’re already doing that for onshore emissions but representing OceanScore we like to look at the water.

Moderator: We spoke earlier about everyone having their own motivation, seeing themselves as being responsible for reducing their emissions. For our part, we can say that we are doing that. With the aim of becoming climate-neutral by 2040, we are trying to switch over all of our production processes. Of course, we only have a limited degree of influence over the truckers that come onto our sites. But we know there are already a few using electric or hydrogen-powered trucks. So as far as that’s concerned, it’s important that everyone is motivated and pulling together. And here I want to take the opportunity to look at the future with you. Some people might already have asked: Oh God, even more bureaucracy, what are we going to need to fill in now? What do we have to deal with on top of everything else? SMEs, in particular, who already have enough on their plates in order to remain competitive. But I think the whole thing can also be a huge opportunity. Maybe we can look at this from the other side. So, what are the opportunities associated with getting involved, or perhaps even spearheading this movement?

Albrecht Grell: Looking at it from the perspective of the shipping industry, it’s a topic that is highly relevant in terms of competition. At the extent to which emissions are now priced, it will at some point no longer be economically feasible to not have a handle on the topic of emissions. I mentioned earlier that the FuelEU regulatory framework results in every tonne of excess CO2 being priced at EUR 650. And we get 3.15 tonnes of CO2 per tonne of fuel on average. So it makes sense to manage this. Anyone who doesn’t factor this in now will no longer be part of the competition in five, six or seven years’ time.

Tobias Bohnhoff: I think it’s great you mentioned that because that’s how we see it, too. If you look into the topic of emissions management or the history of calculating emissions, you can see that the topic is hardly brand new but has been a topic of discussion since the outset. It has been discussed intensively for decades - but at the latest since 2010. Unfortunately, in logistics, very little measurable success has been made in that time. One of the core aspects is that the parameters were so flexible that the topic of competitiveness wasn’t affected by it. But the regulatory side has thankfully tightened since then.

We’ve now come to a point where we no longer have so many options if we want to maintain the agreed reduction targets. I would also like to add one thing that we find really interesting: The aim of not just remaining competitive in terms of costs but also by positioning the company as a green pioneer for logistics service providers and thus gaining access to new customer groups.

In the past, it was relatively hard to say why my cargo hold was so much better than that of my competitor. So, it all came down to price really. But now we have this tool that can be used effectively to position the company in a completely new way, potentially also to grow, benefit from consolidation streams, where there’s a lot of opportunity and momentum in the market because a lot is changing.

Albrecht Grell: Opportunities from the perspective of the shipping industry. Standing out from the competition is probably not something that customers are after. But the FuelEU regulatory framework is set up so that if my business is greener than it needs to be, I can sell this excess. And that makes it quite exciting not just to offer the bare minimum in terms of performance, but to say to yourself: “How do I reduce my emissions by another 50 tonnes? And how can I sell these 50 tonnes for a profit?” That’s where a lot of our clients, who are thinking very intelligently and creatively about the situation, are seeing this regulatory framework as a potential opportunity.

Moderator: Including within your Group?

Albrecht Grell: Yes, including within the Group. But also externally. In simple terms, I can choose any other shipping company and say: You know what, I’ve got 50 tonnes here – shall we create an agreement? What would you pay me so you don’t have to pay the fine? That's one of the very smart design aspects of this set of regulations – that they also considered rewarding people who want to be pioneers for doing exactly that.

Tobias Bohnhoff: That’s how I see it too. It’s a kind of reward for pioneers; the incentive to use pioneering approaches to create value for the company. We can see that in other areas, as well. The FuelEU directive will also be rolled out to include aviation. As a result, there are a lot of similar situations where I can only welcome the legislation.

Moderator: The calls for tender are also interesting. They’ll play a bigger role in future as well. Deutsche Bahn, for example, already has these approaches. So, it’s going in the right direction. To finish up, I have a slightly more technical question: It often comes down to the propulsion technology. What drive technology is in use? What is it powered by? Is it methanol? Heavy fuel is no longer appealing. Is it marine diesel? Is it LNG? Batteries aren’t likely to play such a big role in shipping. Albrecht, which fuel source do you believe will prevail?

Albrecht Grell: Believing is one thing. I’d look at the figures. As a fuel source, LNG will become a good bridge technology for the next ten years thanks to the regulatory framework. For now, it works well and gives me the green credentials I need. After that time, LNG will be considered too dirty to comply with stricter limit values. Then we come to the area of biofuels, so used cooking oils, rapeseed oil, things like that. They will help me for another five to ten years. This means that I need to ramp up the topic of biomethanol, biofuels and biodiesel. After those are exhausted, I will need e-fuels, or as they are known to the experts: RFNBOs, renewable fuels of non-biological origin. Fuels made with renewable energy.

At the moment, they are incredibly expensive. But pretty much at the same level as the fee you have to pay if you cause too many emissions. So the EU has weighed all that up very well. The problem is that there aren’t sufficient quantities of e-fuels yet. It’s the migration from the fuels we have now via LNG as a bridge technology towards biofuels and finally e-fuels if we can produce enough of them.

Moderator: In terms of road transport, things look a little different, as I understand it...

Tobias Bohnhoff: If I look at things from an overland transport perspective, there’s also no silver bullet here – so, no one thing that would be a complete solution. But there are possibilities. Biofuels are currently the requirement, particularly drop-in fuels, so HVO-100, that I can currently use to refuel a standard diesel-powered truck.

Moderator: That’s a new standard, right?

Tobias Bohnhoff: Exactly – it had quite a bit of media coverage recently. For a diesel-powered truck, no retrofitting is required. This is something that has an immediate impact. In terms of capacity, it’s still critical and will likely play an increasing role in the conflict of demands between aviation and shipping over the next five to ten years.

As a result, it is clear that overland transport, particularly road transport, needs to take the path of electrification. Just to avoid this conflict for resources to some degree. And because it’s the ideal set-up for many in the industry in terms of energy efficiency. At the same time, we have to issue a bit of a disclaimer because there are always people who say: Well, that won’t work for my business. And that’s just the way it is. There are probably some areas where it might be difficult: very remote areas, mountainous environments, etc. There, people will still need to use liquid fuels.

But when we’re discussing central Europe and the major transport axes, it will absolutely be possible to electrify these regions. The same goes for North America. As a result, the areas generating the largest amounts of emissions in terms of overland transport can be electrified very effectively. But only from 2030 onwards. Because manufacturers will expect to have a heavy e-truck cost around the same as a diesel in terms of the total cost of ownership – i.e. the procurement costs including service life and running costs. There will be a tipping point if sales go in a completely different direction. And even after that there may be regulations that state that there will be a hard stop at some point as to the sale of combustion engines. We’ll have to see how long it lasts.

Moderator: It’s probably also the manufacturing technologies, whether you have a hub and shuttle system or feeder traffic. How do you organise the trucks being recharged by a certain time? Do you offer support with that?

Tobias Bohnhoff: I can’t give you a precise percentage, but I would say that well over 90 percent of all electric trucks in use are hub-to-hub traffic; that’s if we’re talking about the really heavy-goods trucks. That means there’s very little charging going on on the road or between stops. The infrastructure’s just not there yet. That will be the next step in the evolution and this will increase the complexity.

Currently, it’s pretty easy to say: I’ve got network traffic for a route where I can gauge the range pretty well, I have charging point 1 and charging point 2 – and a vehicle shuttles between them. That’s the easiest method – the one I would always recommend if you want to get to grips with the technology: Take the low-hanging fruit that is easiest to harvest right now. And the more penetration there is and the more vehicles there are, the more complex it will become – and that’s where the data comes in. I think we have a great jumping-off point: The fact that we are able to use our data to identify and build on lots of application scenarios that very few people are considering and talking about currently. As a result, it’s great for us to stay on the ball and look where we are able to offer another solution perhaps.

Albrecht Grell: It’s a similar situation in shipping. Batteries just don’t make sense in shipping. The amounts of energy that we need for most international routes are just too high. But the green corridors initiative has been in place for a while, where two ports come together and say: Between these ports, we want to make it possible for certain routes to be carbon-neutral or at least low-carbon.

And that’s the question of infrastructure for us – not of electricity, but whether certain biofuels, such as ammonia, are available. And if I shuttle between A and B, I don’t have the problem with availability that I might have if I was out on the world’s oceans and looking for a refuelling opportunity. So there are similar approaches here, too. That is also something that will transfer from green corridors into more widespread use.

Moderator: We can see there is a whole host of interesting approaches and none of us know which ones will prevail. But there are people who are thinking about these things, like you, and like us at HHLA. Everyone involved in logistics needs to do whatever they can to reduce emissions. We haven’t managed to do it yet. Thank you for your insights and interesting comments. All the best for your companies and the solutions you’re offering! 

Albrecht Grell: Thank you from us as well!

Tobias Bohnhoff: Thank you very much for the invitation. I enjoyed it!

Published 23.9.2024