 Welcome everybody to this afternoon's climate breakthrough dialogue on getting to zero for shipping. I'm Margie Van Gogh and the lead for supply chain and transport initiatives at the World Economic Forum. We've heard in earlier conversations today that collaboration between sector pairs, investors, local and national policy makers and civil society is crucial to achieving deep decarbonisation and transformational breakthroughs in the early 2020s. Shipping requires clear road maps and transparency between now and 2030. Shipping is no exception. An important first step by the International Maritime Organization in 2018 targeted at least a 50% reduction in shipping emissions by 2050. However, given technological development, the latest climate science and active engagement across the full maritime value chain, many suggest that the ambition for shipping should be to achieve zero greenhouse gas emissions by 2050. Getting to zero coalition hosted by Friends of Ocean Action, Global Maritime Forum and the World Economic Forum's mission possible partnership unites many companies, 160 plus organisations, NGOs, academia and governments around 2030 ambition, aiming to have commercially viable zero emission vessels already operating on deep sea trade routes within this decade. Ambitious focus leadership across the maritime ecosystem supported by national and international policy measures will of course be needed to ensure zero emission vessels are indeed the default choice by 2030. With this, I welcome and invite our panel of highly engaged leaders to share their thoughts to discuss how their organisations are investing for a sustainable zero emission future and the support that is needed to achieve this. Our panel is moderated by John Defterius, former emerging markets editor and CNN anchor, chair of the Agora Group and longtime friend of the forum, having led me catalyzing discussions over the past three decades. Before I hand over to John, I'd like to introduce our guests. It is my great pleasure to invite Rachel Kite, the Dean of the Fletcher School of Tufts University to share a few opening remarks on a subject that she too is passionate about. Rachel presently chairs the Rwanda Green Fund and the Private Infrastructure Development Group's ESG Board Committee. Previously, she was the chief executive of Sustainable Energy for All and the World Bank Group Vice President and special envoy for climate change. Rachel, thank you and over to you. Well, Margie, good morning, good afternoon, good evening, everybody, and delighted to be here. Just a few years ago when we would talk about shipping at the World Economic Forum or in any other climate or sustainability related into governmental meeting, this was always put in the category of very hard to abate, maybe impossible to solve. And the people in the room were really perhaps those who were persuaded that there was hard work to do. Here we are in May of 2021, a super year of sustainable development diplomacy where the economic recovery from COVID coincides with the science which shows us the urgency of the need for an energy transition and a deep decarbonisation and coincides with our understanding of how perilously close we are to tipping points in the way in which we relate to nature. So all of this coming together and we see a sense of ambition but a sense of commitment coming from coalitions of the willing in each of the hard to abate sectors, no more so than shipping. I think it's been very important that the race to zero and the climate champions of Chile and the UK have put their weight behind the ambition that's coming forward, in particular the idea that by 2030 we could reach tipping points by achieving 5% of fuels for shipping to be zero emissions. That kind of pragmatism of how far can we get this decade in order to be at net zero in 2050 is important because it gives a toe hold or a grapple hold to all of the different stakeholders that have to be involved. We can see and we will see on this extraordinary panel the opportunities to support relationships, the opportunity for investors, if we understand that land-based fuel production is the biggest part of the emissions curve that we have to tackle. But there are still questions out there that we haven't resolved yet. In a global shipping industry, what about flag states? How do we make sure that countries that depend upon the shipping routes but aren't big players within shipping do well and can see their way forward? Because we will need their votes at the IMO and we will need their commitment to fast progress. How can we continue to add people to these coalitions, the willing? How can we continue to educate the investor community about what good practice would look like and not? And how can we perhaps have some unilateral action going forward with different shipping routes, maybe for the ammonia and LNG production that they would only ship on zero emissions vessels? How can parts of the shipping industry go faster, further, first and then bring everybody else along? It's such an exciting time. This could not be a better timed conversation. Over to you, John. Rachel, thanks very much. Margie, thanks again for the invitation to chair the session, getting to net zero in shipping. I was hosting for CNN the Global Energy Challenge in 2019 and 20 and actually had firsthand experience here in terms of trying to make this transition. And boy, I think it's fair to say that the narrative has changed over the last three years when I embarked on that project with the original narrative being that the hill is too steep to climb, that we can't make the inroads that everybody was asking for from the global community when it comes to shipping. The transition is underway, but it's not an inexpensive one, if you will, particularly for the next two decades. We're looking at an estimated cost of a trillion to $1.5 trillion to make it happen. And there are a number of options on the table. Again, if you go back just a few years, that nobody was really discussing at the time, Rachel touched upon the ammonia, hydrogen, biofuels, even nuclear in terms of power for these giant vessels. How realistic are they? And then we talk about the chicken and egg approach. If you declare there's an interest in this market from the major shippers, will the major energy companies meet the need in the future? And that's clearly a point of debate. We have a fantastic panel, as Margie and Rachel were suggesting, let me introduce them now. Lehung Kwa is the CEO of the Maritime and Port Authority, joining us from Singapore. Soren Skow is the Chief Executive Officer of AP Moeller Merse, the Global Logistics Group, joining us from Copenhagen. Young Dielmans, the Head of Ocean Transportation for the Giant Commodities Trading Group. Cargill, he's joining us from Geneva. And Johanna Christensen is the Managing Director, Head and Projects and Programs for the Global Maritime Forum. She is also joining us from Copenhagen. Before I jump into the debate, we have about 50 minutes. Just going to lay out the landscape for us here. We're going to have a Slido chat room there on the platform. We welcome your questions, and I would hope to have about at least 10, if not 15 minutes to entertain those questions. My only point is make them a brief and to the point. If you can direct them to one of the panelists, even better, and let us know where you're joining us from on the platform. Let me bring in Le Hun Kwa from Singapore and to discuss the new maritime decarbonization center that you set up there. How will Le Hun address zero carbon vessels, the infrastructure around ports, which is often overlooked. And then this idea I was talking about here, fuel production, what comes here, the chicken or the egg, when it comes to the fuels that will power this industry in the future? Do you want to take it from there? Thanks, John. First of all, I thank the World Climate Forum for giving me the opportunity to speak here. Now, to address John's question, the reason why we actually want to set up this maritime decarbonization center is because we recognize that climate change is a global challenge, which requires global collaboration. And we need solutions. This is particularly true for shipping because it's not just about shipping, it's about the energy transition that's also taking place in parallel and also about the infrastructure and the port infrastructure that needs to be put in place. So this is one of the recommendations, which is by our international advisory panel which was set up in 2020 with 30 distinguished sea speed leaders. And what we hope to achieve is definitely on three areas. First is we actually want to encourage more private public collaborations. Here, I mean, it's not just about the ship itself, but it's across the whole value chain as what John rightly mentioned, how to get the fuel in, what is the port infrastructure, what is the bunkering standards, what are the safety standards, and then it's to come together into play. It needs to focus definitely on collaboration and I think we recognize, and that's what we share very clearly from the shipping community that it is not one individual or one player who has the solution. So we need to come together to actually share such experiences and allow the solutions to snowball. And more importantly, I think it's really talking about this value chain ecosystem. So when we join in the Castel Initiative on Ammonia Fuel Vessel, we aim to come up with the ship by 2023-2024 and then Singapore is ready to welcome the Ammonia ship to do bunkering. I think that is the type of value chain ecosystem that is required. Now, the decub center is not just seen as follow. It has to be, it has to collaborate with other decarbonization center Perhaps later, Soren can speak more about it because there is the 2.0 carbon center which the MERS has also set up. And together, I think in Singapore with the different players together, we hope that we can contribute at least the safety standards, bunkering standards, which are common sort of a game field for everyone and help to level up everybody towards global shift. Yeah. Okay, thanks, Lehmann, for being so directed. And to the point, you raised the idea of a public-private collaboration and let me bring in Soren Schohe here from AP Molar Marist. Can governments set up a framework, and particularly in this March to COP26, would you suggest Soren, to facilitate the transition? And I don't want to suggest pick winners when I talked about those energy examples in my opening comments, but to give a roadmap here and even policy apparatus to make this transition accelerate in a timely fashion. Yeah, I certainly believe that we can get some help from governments. Actually, I'd be quite blunt by saying that today, business is ahead of governments on this agenda. We need more sense of urgency, frankly. Obviously, fossil fuels are quite cheap, they're easily available, very reliable, easy to get. And frankly, that's tough competition for green fuels. And therefore, we need more regulation that can start to ensure that we actually have availability of green fuels. Rachel already referred to this in her opening remarks, but we have some important dates coming up this year in IMO. And IMO, in our view, needs to deliver a market-based measure by 2025 that can be implemented in the second half of this decade. It needs to be at a reasonable level that actually tries to level the playing field between much more expensive green fuels and fossil fuels, but they also have to very, very importantly to include all greenhouse gases and has to consider the full life cycle of the fuel. Then I think we will start to push further ahead when it comes to getting new green fuels into the market. We and Singapore and others are working on the technical aspects on the ships and what it takes to run on green methanol and what it takes to run on green ammonia. I'm actually confident now, having worked on this agenda for two and a half years, that we will solve the technical problems. Actually, those are getting to a point where we clearly understand what the issues are and also what the solutions are likely to be. The next, if you will, stage on the journey, that is actually to figure out how to make the green fuels available. Okay, thanks, Soren, very much. You talked about this basket of fuels and this gap that was gonna suggest the terminology that we have in the UK in the underground system, mind the gap. What do we do, would you suggest, Jan, at this stage, from a cargo perspective, to address the gap? Is that the role of government to say that we do need to finance this transition because of the gap between the hydrocarbon fuels in the market today and the green basket, if you will, that's coming to the market? What needs to be done in the transition near term to accelerate adoption? Well, thanks, Soren, thanks for having me. And I think some of it is also very much linked to what Soren said and what Leihun said earlier. I think it's a basket of things that needs to happen and I think we all need to keep on focusing on efficiencies because every drip of efficiency is gonna make the problem smaller going forward. So I would really see us keep on going on that and ourselves, we've been very much involved in wind technology, which we all know is not gonna be the zero carbon solution, but it will help at least to reduce the problem and the green premium or as the mind the gap, as you call it. So I think that is one, I think the other thing is things like the institute that was talked about earlier is the collaboration because the technology, I fully agree with Soren, is gonna be available. But how are we gonna scale this? And the scaling is gonna be the big issue. And I think if you really wanna scale it, you are gonna come back to policy where putting a price on carbon and leveling the playing field between those fuels is absolutely needed to really make the next step in this. But I think it's a mix of things and the private sector is doing its bit. I clearly see that. And I think it's now also up to governments in the IMO to weigh in. Okay, yeah, I'm very quick follow up. I've heard from others in the industry that the IMO was being a little bit too conservative initially with the targets. Is that a fair comment here? And there's a kind of wake up call to the industry to step on the pedal here and be more aggressive. Yeah, I do think you need to put things in perspective and it was said earlier around five years ago. I think there was a lot of noises saying that shipping should be completely excluded of this topic. Then the 50% reduction came by 2050. And I think to me, it's just a question of when we're gonna say it has to be zero and not if because I think we're already past that station. I think the momentum is growing in the industry but also outside the industry. And I think the technologies that we're working on are already zero carbon based anyway. So I think it makes a lot of sense to raise the ambition level which hopefully also is a catalyst for some of that regulation that we need. Okay, I'll bring in Rachel Clyde after that on the worthiness of setting targets but I wanted to bring in Johanna Christensen of the Global Maritime Forum which those in the industry know has been working with the World Economic Forum and the Friends of Ocean Action to create Getting to Zero Coalition. Would you say, Johanna, there's a particular focus here on 2030 and on this net zero progress that Jan was just addressing here to accelerate full decarbonization by 2050. What's the interim goal here? Yeah, so that's on two levels actually. So the reason that we've focused so much on 2030 is because of the average lifespan of merchant ships that have, that comes to about 25 to 30 years. So in order to meet those decarbonization targets zero emission vessels really have to start entering the global fleet by 2030 at the very latest but not only that their numbers have to be rapidly scaled up through the 30s and 40s. But as others have pointed out already shipping's decarbonization is not really done with the ships alone. So we've had research done that shows that around 90% of the investment needed to decarbonize shipping will be in land-based energy infrastructure. Energy needed to zero carbon fuels, the distribution, storage, bunkering infrastructure for their supply, et cetera. So it's really a challenge that shipping can't solve on its own. And that's the basis on which we founded the Getting to Zero Coalition. The Coalition now unites more than 160 companies from across the maritime value chain including not only shipping but importantly the energy sector. And that's both the sort of the fossil fuel industry but it's also the new entrance if you will. So the incumbents and the new entrants that are looking to develop those new green fuels cargo interests, OEMs, banks, governments and other stakeholders around this collective objective of having commercially viable zero emission vessels operating along deep sea trade routes by 2030. But I think another important component that we're sort of honing in on now is something that Rachel mentioned in her introduction where we've been working on what we call shipping's tipping point. So all industrial transformation pretty much follow an S curve. So it starts with a slow emergence phase where there's rapid learning and the cost start to come down of new technologies. And then there's a sort of a diffusion phase that starts with rapid adoption of new technologies, positive feedback loops that raises confidence in the transition, more demand, investment, et cetera. And then the curve flattens out again where there's reconfiguration and sort of a new normal is established. And we've done some work together with the COP26 climate champions and UMass where we estimate that about 5% adoption rate of zero emission fuels by 2030 could be that tipping point for shipping. So that's a sort of a more specific goal that we're working towards. And there are some really specific ways that that could be achieved. I mean, we've already heard from Søren that container shipping is a front runner. They're close to the end consumers. So where the pressure is likely to be the greatest but also where the conditions are maybe there to pass on some of the higher costs of those fuels to the end consumer. They also trade in a way that means that with relatively few ports and routes, you know, that accounts for a larger share of volume. So that makes it relatively easier. I'd say relatively, and I hope Søren agrees. Søren has a much harder job than I do. And then there are other sort of more niche trades that could make up some of that difference. So with some of that 5%, that's ammonia and LPG tankers that are also, you know, they already have the storage and systems and crew while adapted to these new fuels. And there are other sorts of niche international routes that could really have good enabling conditions to be first movers. So that's really where we're honing in. How can we get those first movers going at scale so that we can reach that 5% target? Okay, Johanna, thanks very much for the comprehensive outlook here both near and medium term. Rachel, I wanted to bring you back in about this idea of assisting the industry by setting concrete targets. Does this, would this accelerate the development of the fuels that we've been talking about here and push this industry along in the right direction? Yeah, it's a great question because I think we're really in a new age where we're in an age of hybrid governance where actually the private sector and government and science and civil society are sort of egging each other on in a way which has not always been the case. And so for example, the science is very clear that we need to be at net zero by mid-century. That then gets understood by companies who have got long range investment R&D decisions to be made. So why would you be investing in something that's going to be obsolete? You need to be positioned for success. So you have private sector committing to 2030 targets or 2050 targets. You have investors thinking, okay, so if that's the direction of travel we need to be there at 2050, where am I investing? You see investor pressure. And then you see the public policy not enabling that race to zero but people setting targets anyway. And so I think where we have a situation now where the public policy internationally, that means the IMO, domestically that's different governments are going to have to lay the policy, lay the policy path so that people can race really quickly. And that means effective pricing. It means putting, making some bets on green hydrogen and ammonia, especially around port infrastructure. And so these targets are actually speeding everybody up at the moment. And I think the very important thing is that every company that has committed to being transparent about its scope, three emissions. So these are the emissions that come from its supply chain, its value chain is going to be putting pressure on the shipping industry to ship its products in a zero net in a zero emissions way. And so this isn't about the industry evolving from the inside, it's about the industry evolving from the inside meeting huge pressure from the outside. Well, that's an excellent point, Rachel. And thanks for that. The other element I'll introduce now I think is that money talks and the Poseidon principles where you see banks holding to account those in the supply chain suggests you we're not going to lend for a future expansion unless you meet these principles. What sort of influence do you think this could have soaring on the industry and decision-making by the companies themselves? And how do you see it from your vantage point? Well, clearly I think it's the right direction to go and it will incentivize, incentivize shipping companies to do the right thing when they order or order new ships. I think actually for me and continuing on Rachel's point about companies setting science-based targets for their scope three emissions and especially our customers who don't produce anything they rely on us to come up with zero carbon if you will solutions or products and services. And for us it means that we're really thinking more and more about this not as a capex or a cost problem but as a business of opportunity. We are already today offering a transportation service that is carbon neutral, which is based on biofuel that we drop into the tanks in the quantity needed for the containers that we have sold. There's a significant premium on that product because the biofuel is more expensive but the product is growing exponentially and that's because some of our customers out there are actually putting their money where the mouth is in terms of saying we want to get to net zero in our supply chains and we realize it's gonna cost a little bit of money and we're willing to pay that. So for us it's really about growing the availability of zero carbon products and that's why you see most for all ships that we order from now on all the ships that are at least the dual fuel capable so that they can burn a carbon neutral fuel if we can procure some fuel. Okay, thanks very much for that. Sorin Lehune, I'd love to get your thoughts because you have the decarbonization center in Singapore. We know that there's one in Copenhagen which Johanna can address as well. How dependent though is the industry on research and development at an accelerated pace? So you look at the take up of the electric vehicle. Again, if I had that conversation, five, six years ago people say you're nuts now we see all the major manufacturers with an EV in the fleet. How does this apply to shipping Lehune? Thanks John, I think that's a very valid question. I just want to go back to what Rachel mentioned about first mover, whether you can move first. I think at this point actually, despite the pandemic, we actually see many players coming forth to talk to us about this energy transition and this shipping transition that's going on. And actually I've been in the industry for about two and a half, three years. The momentum is just picking up year after year. I would say that for example, on Sorin's point on the availability of fuel, it is true. I think for all port authorities like Singapore we are preparing for a multi-fuel transition. In the transition, I think there will be a few different types of fuels because different companies are going to test it with different fuels. So there's ammonia, there's LNG that is already established, there's biofuel, there's some we're going for carbon capture. The long-term solution, people are looking at hydrogen and that's true. However, the molecule is too expensive. We don't have a proper hydrogen tanker carrier yet. So these are where technology still needs to come in. And I think the key is really about scaling up. Once you have the technology solution, whether we can find that S-curve which Johanna mentioned about and how we can reach that scaling up, I think financing needs to come in in the bigger ways. Whether at the global level, for example, this international maritime research and development fund, that industry is putting forth to the IMO and moving forward towards it, having a fund to go into the technology research. And I think private sector let financing needs to come in. Poseidon principle, we have more institutions are willing to come on board to offer a certain preferential interest rates that will allow smaller medium enterprises who may not own hundreds or thousands of feet, 20, 30 feet to also come in and start buying the ships. So these are some of the areas that I think needs to go in parallel if you're looking at scaling up at the global level. Okay, thanks, Lei Hoon. I wanted to take a question that we have from the Slido app and I appreciate you feeding in with our audience here. I wanted to call upon Yan but I think he has a signal back. Yan, can you hear me there? You have to unmute your microphone, Yan, if you can. And I'll bring Johan into the meeting. Yeah, I can hear you, perfect. Once you get back on the chair. Yeah, that's okay. Here's a question from the audience. We talk about market-based measures. Lei Hoon talked about it. Rachel talked about the desire if you get the incentive here into the marketplace. Can I discuss the carbon tax? This is a big debate when it comes to onshore and obviously one that would be for the shipping industry as well. Do you have any strong thoughts on that, Yan? Well, I think in the end of the day, everybody would prefer to see a global scheme because that is the easiest. I think the reality is that it's extremely difficult to pull off. So, and that's why you see some of these local schemes being pushed forward like the ETS and you might see some others going forward. So I do think the preference is for a global scheme but if that is going to take too long, I think the industry will just need to live with some intermediate steps because we need to get going on this topic. Okay, Johanna, please, from a trade association discussion point, is this the time for the global carbon tax in the industry has been bantied about, as you know, for at least a decade? And I thought I saw momentum going back two years ago, but it hasn't come to the fore. Yeah, so maybe I should allow me just to correct briefly, we're not a trade association, we're actually a not-for-profit foundation based out of Copenhagen. So also we do have members from the industry or not members, contributors from industry. We also have philanthropic and government supporters, et cetera. So it's a multi-stakeholder platform for collaboration. And yes, I agree, there needs to be, so there are a couple of different things that need to happen in preferably to Jan's point at the IMO, but there are other avenues to achieve that kind of the closing of the cost gap, if you will. Rachel already mentioned like a clear direction of travel towards to zero emissions. So in other words, making sure that the targets at the IMO are well aligned with the targets that have been set at a global level through the Paris Agreement and that our science aligned, right? So that's the first piece. The carbon tax issue, so some kind of, we should say, some kind of market-based measure, carbon tax is certainly one avenue for that, but one that really comes close to closing that cost gap. And to instill confidence in the entire maritime value chain that the transition is gonna be possible and that we're gonna be able to pay for it, right? So, and that it's gonna be commercially possible to do this and that we can do that ramp up phase in the 30s especially. And I mean, there's a way to bring down the cost or the price, it's sort of the tax, if you will, if the revenues generated are recycled into subsidizing or supporting the uptake of fuel. So there is a way to bring down the overall cost. So there's all sorts of different price levels that have been floated, but it is possible to actually make that a price that's much closer and sort of within, you would even say sort of the price fluctuations that you see on oil over the past, even the past few years, which has been significant. So that's really kind of where we see this landing. And another really important point in this is that we look at what the impact is gonna be on climate, especially climate-vulnerable countries and the least developed countries. That we look at this from an equity perspective because there are many countries that are gonna be negatively impacted either from an increase of cost and trade or the like. And so we need to make sure that it's an equitable transition. Okay, perfect. I'm gonna bring Soren into this debate on the carbon tax. Do you wanna weigh in, Soren, and your thoughts of it being implemented in your view? Is it realistic by 2030? Yeah, so in my view, we have one huge advantage in the shipping industry. And that is that we are global and regulated by the IMO. It's the IMO that decides the fuels that we are using. And we just did that when we went to low-solver fuels in the first of January, 2020. And it worked even though it was much more expensive for the shipping companies. And we can do the same here. So that means that we can create regulation that creates a global level of playing field. Many other industries do not have that opportunity. So we need to use IMO as a vehicle to get a level playing field and to take regulatory measures that will help us get to a new fuel. And that includes, in my view, a carbon tax or what I call a market-based measure. We can start talking about that now because we have line of sight to what the alternatives are to the current fuels that we use. Two years ago, three years ago, we were not keen on a market-based measure because we didn't know what it could push us to. But today, we're starting to have the point that we actually know what the solutions could be. It's going to be some kind of combination between methanol or anamonia. And we know it's going to be more expensive. And therefore, a carbon tax is starting to make sense for us. And we're calling for that to get implemented in the second half of that decade to help push us towards the right kinds of fuels. Okay, thanks for the candor. I want to circle back on this idea that Johanna brought up at the Global Maritime Forum. And that is, how do you ensure equity in the transition? And as a merchant market editor for CNN, I had traveled the different corners of the world looking at port operations and economic parks linked to the maritime trade. And if it's not handled well, the damage it could cause. Rachel, you have any thoughts on this? And let's get Lehunta Wei in as well. How do you ensure equity at the same time accelerate this move to zero emissions in your view? I think this really goes to the heart of the IMO role because what the IMO should be doing now, and of course, the IMO is made up of its member states. So they're not, it's not a separate body, it's made up of its member states, but we need the IMO to sort of tilt the playing field towards faster decarbonization, but also to equity, which means the technical support to developing countries so that they can know how to use their, I mean, especially if they're flag states, they have all kinds of powers and ways in which they can incentivize ships under their flags to be best in class. They have all kinds of ways in which they could potentially innovate so that they are demanding zero emissions vessels under their flags or in their territories or in their waters, but they're going to need technical support to be able to do that. So levy taxes or levy prices on fuels take some of that and use that as a fund to help developing countries benefit from this race to zero rather than thinking that they are going to be punished by it. So I think that there are many other little sort of intricate things that the IMO could do, but we need to start doing it now so that everybody sees that they have a stake in this and everybody will benefit from it. Okay, was it a mistake, Rachel, for the IMO to suggest an initial target of 2100? I mean, if people kind of raise their eyebrows and said, you know, the game will be over if we don't accelerate this process in the industry. And I'm listening to the narrative of Soren and Jan Le Hoon in the industry, Johanna from the Global Maritime Forum's view on this is the IMO waking up to the fact that the world wants action at a much faster pace. Well, 2100 is, I think you could consider it a political target, not a science-based target. And I think we're in an era where consensus is being weaponized to sort of undershoot where we need to be. But the thing about targets is that they can be revised. And we're seeing in many other areas of the transition and transformation that those targets are being ratcheted up. So I would expect at some point, this needs to be ratcheted up, especially as people have confidence that we do actually know how to get there. Okay, Le Hoon, I wanted to touch base with you and circle back on the whole idea of equity. You have a fantastic vantage point from Singapore into markets like the Philippines and Indonesia as well. Is it a concern from the Southeast Asian view that this is managed correctly with equity for the developing countries? I would say that the inclusive agenda, like what Rachel said is definitely important and is critical if you want to talk about mass adoption and moving the whole world towards together. So actually, I mean, if I could just add in a point that we are a member of IMO, where IMO is made up of 490 members. And the fact that there is a hunger actually is a good reference point. And it has generated quite a number of a lot of momentum in terms of private sector and also quite a number of discussions within IMO itself, whether it's about energy efficiency for a start. We are coming out, we have already come out with an index. And then moving forward, what are some of the market-based mechanisms? So these are some of the proposals which are on the table for member states to discuss. Now what we need now is actually to see like what Rachel mentioned, how do we bring other member states along? And that requires technical support and that requires sharing of information. So for example, together with the IMO Secretariat, we developed this next-gen mechanism and platform. What we want is to build a platform so that we can have not just the private sector players, but also member states, thought authorities to come and share some of our experiences and help level each other up. And these are the type of capability development and technical support which will be very helpful to help level up different countries, whether it's Southeast Asia or other parts of the world. And I think this is something which we need to continue to work on because the least you want is to have member states feeling very left out and that you are not able to go along with it. And the key is whoever can go faster should be willing and as much as possible, share the wisdom, share the knowledge and actually fun and get things going. Okay, thanks, Lake Hoon. Another question from our audience and we appreciate them. This is pertinent to our discussion that we're having now. What is the role of the value chain actors and the shippers in the short term? And this could kind of unlock that quandary of where the demand comes from in the future. How can that help overcome the chicken and egg scenario that we talked about before? Johanna raised it, so did Rachel. Jan Deleman from Cargill, do you want to jump into the debate on that side? The entire value chain and the pressure coming from that? Yeah, no, and I think it's a very good question. And I think there's been an initiative launched under the Global Maritime Forum as well, where I've been heavily involved is the whole Chicago charter, which is really trying to create transparency around the topic. And I think what we've been lacking in the industry is also the transparency on emissions and everybody's starting to talk the same language. And I think that has been a really good starting point to really look at end to end in the value chain. Where are some of the issues? Where are some of the opportunities? And I think that is a very good first step at least to show a little bit more and shine a little bit of a light in the industry, what the levers are. And I think that has been a good starting point for us in looking at the whole value chain and not just the shipping piece, I would say. Okay, Sorin, what's your view from the APROM Maris on this? But I think, Frankie, we are beyond the chicken and egg situation in our case, because we already have ordered our first ship that's going to run on agreed fuel. And we have said that every ship that we ordered from now on will have to be capable of running on agreed fuel. So we are creating that demand now. We are scratching our heads, trying to figure out how to satisfy it. But I'm sure that we're going to get there. And as we discussed before, we are seeing in the container sector where the customers, if you will, are all the global brands that you can think of that sell to consumers, that we are starting to, we're seeing customer demand for zero carbon products. And we're seeing also a willingness to pay a premium for that demand. I think that we will see a significant growth in this demand in the coming years, almost half of our top 200 customers have now set science-based targets and they will need our help to deliver on those science-based targets. So that's really where we are. We are beyond the chicken and egg. We see this as a market opportunity, not a cost problem. Okay, Srinath, thanks very much. I'm going to drill down and just open the floor up to everybody here in the boxes on this. And how do you get a common standard? Lately, you were talking about transparency and the need for transparency. How do you set the level playing field here for the developed and developing world regionally seen like-to-like Asia to Europe and the United States and then going South to Africa and Latin America? How do you get that common standard, Lehmann? Is that the IMO responsibility? I mean, it has to be a global discussion at global initiative. So IMO has really a proposal that's on the table. I mean, to continue to discuss that as members, it's about what actually fundamental is really carbon accounting. I think that's where you need a common metrics in terms of accounting for carbon, and therefore you can talk about carbon credits and carbon exchange. So for example, in Singapore, we are actually trying to set up a climate impact exchange where you can actually exchange carbon credits. So that's one of the few areas we need to look at. Actually, I wanted to go back to the topic on energy, the value chain ecosystem. We've been talking, in fact, by a number of energy companies have been approaching us and actually there is quite strong interest there to try to align to where the demand is. In fact, many of them, they actually tell us that they have tanks. They are actually interested to convert their tanks to take in new energy. But what energy? Whether it's ammonia, methanol, ethanol, vinyl, biofuel, if something which I think they are the process of making division, which is why the value chain ecosystem, the question from the audience is actually very important. You need to form as many of that as possible so that you can generate the demand. And therefore your energy companies will then move along with us and actually have the demand and energy in place. Okay, this is a natural follow-up to that. Who pays the bill for this? Soren said that consumers are very sensitive now. It was almost out of sight, out of mind, the shipping industry, to the mind of the consumer. But because of the awareness in the March to 2050 and the Paris Climate Agreement in COP26 in November this year in Glasgow, is there a willingness by the consumer to actually pay more at the till for their products? Has anybody done a gauge of that? Johanna, what's the debate within the Global Maritime Forum? Is there resilience amongst the consumer after coming out of a global pandemic which is not over yet? Well, I think we need to bear in mind that at the end of the consumer, actually the cost is tiny. So there's lots of different studies that have been done on this, but we're talking cents on the dollar, right? So it's a really... So while the cost at Soren's end for a shipping company in terms of the cost of the fuels is substantial at the end of where we're talking about, whether it's sneakers or electronic products or whatever it may be, the additional cost is actually minimal. And thus we think it's something that the consumer can actually bear. And that's where there's only a tiny difference. So that's not something that worries us. I think one also needs to bear in mind the huge... I mean, to lay who's point, the huge market opportunity that we have here. I mean, the 5% of zero emission fuels, we've done some... I have to say, this is like back of the envelope, kinds of calculations, but that represents about 7 million tons of green hydrogen. That's a huge market opportunity for companies that are entering into the renewable energy space, right? And so I think when Le Hoon talks about the companies that are approaching them, the energy companies, others, that's the opportunity that they're looking at. This is a huge market opportunity. There's also an opportunity for developing countries here because obviously these fuels being produced with the help of renewable energy or as a major input, that completely changes the energy landscape, right? There are lots of countries, the World Bank has done an excellent study on this that looks at all the different countries that could be kind of the energy exporters of the future. So this is really, really great. There are a huge amount of opportunity there and that's in all sorts of different countries. It's middle income countries, it's lower income countries. So there's a really great opportunity to be explored there. Which I take an advantage of. I appreciate that, but they kind of argument it and one that we're watching very carefully here in the Middle East. If you think of Iraq, Iran, Libya, Angola, Nigeria, stretching to Latin America, Venezuela, the over dependency on hydrocarbons and servicing this industry as it is today. Rachel, the geopolitical risk in this transition cannot be overlooked. Johanna talked about the opportunity, but there's also the downside risk for the major oil and gas producers. And I see your mic is muted. So if you wanna uncork it so we can hear from you. Yeah, so we're in a transition. And so the transition means that geopolitically there is an opportunity to exploit the renewable energy resources that countries have. And that's distributed globally. And then of course, for those countries that are heavily invested in the oil and gas industry and deeply brown economies, then how they manage their transition is the most important issue. And that is why I think this year, in particular, these issues are top of mind for the G7 and for the G20, not just for the climate talks in November. These issues are top of mind in the 14th and 15th five-year plans of China. And of course, this is what Joe Biden tries to get through the US Congress in terms of infrastructure bills, jobs bills. Climate runs all the way through domestic economic reforms and sort of geopolitics. So we're in a multilateral age with a great power rivalry, China and the US. How that great power rivalry works in a decarbonized energy system. How multilateralism works as we deeply decarbonize is top of mind. Of course, for shipping, you know, as part of the connective tissue and part of the world trading system, that too comes to the fore. So I don't think that there are gonna be winners and losers as we move from a fossil fuel economy to a decarbonized economy. But who wins how quickly and how big of a win I think is still to be found out because, you know, countries are in countries are each, each country is in the path of its transition right now. And there are opportunities to pivot quickly away from fossil fuels, even for the most deeply carbonized societies. Okay, thanks Rachel for that. I know here in the UAE, for example, on the East Coast in Fujera, I think it's Uniper and neutral fuels are experimenting with biofuels. And I wanted to get Soren's view and Jan's view about in our last six, seven minutes together here, where's the innovation coming from? What bets are you making as chief executives and senior officials within your organization? Soren, did biofuels have a real chance here because of the cost that we see today? Or can the innovation drive that cost down? What are your thoughts? I mean, biofuels actually would be the perfect solution for us because we can mix biofuels into the fuels that we already use today and thereby ramp up, if you will, the usage of it. And price-wise, it's also quite manageable. I think to follow up on that question, if we double the fuel cost for BERSC, then we add $4 billion to our fuel bill. That's a lot of money. But if you start doing the math on the actual finished product, it's nothing. A container can take 30,000 pairs of sneakers. So that means you're paying six cents more for sneakers or whatever for the extra fuel. So I think that part is quite reasonable. The problem with biofuels is that nobody thinks it's scalable, that we will be able to produce the quantities that we would actually need. We are using biofuels today in our eco-delivery product, and we think we can scale it this year and next year, maybe also if we are good at procuring. But over time, we need something that can deliver much bigger volumes. And there we need the electro or the e-fuels or power trucks or whatever you call them, such as methanol and ammonia. Okay, good. Jan, did you want to weigh in on this innovation, which you're excited about? And Le Hoon, I'd love to hear from you on this as well. Well, I think what's been said was spot on. I think biofuels have a role to play, especially in the transition, I think. The problem is the scalability, the availability. What it does, you get the whole food for energy debate potentially. So there's a lot of knock-on discussions here as well. So they absolutely have a role to play. But if we really want to decarbonise and scale that, we have to go to the zero carbon fuels. And I think that is the real path forward. Okay, Le Hoon? Yeah, same views as Thoran and Jan. Biofuels are technically the easiest to convert, but they don't have the availability. And also in terms of competition with aviation, I'm sure aviation pick up after the pandemic, because aviation tends to also, it's also looking at biofuels as one of the sustainable fuel that they can use. Then of course, we can talk about ammonia, but of course, sitting is a bit high. So in terms of infrastructure and port side of investment, it's a bit more tricky. Hydrogen, as I said earlier, it's really something which I think in the medium and long term, people are really looking at it. Question is how do we overcome the shipping of hydrogen, the issues, and how do you have be able to produce green hydrogen, for example, in an economical manner? So we are preparing, Singapore is preparing for multi-fuel bunkering transition. And I think it's a fact, it's a reality. We just have to prepare for that and have different bunkering standards in the meantime while waiting for that 2050 fusion to come in. Okay, thanks for that. Now there's been a lot of announcements recently about zero carbon vessels, and I had a chance to actually do some stories on in the last year. A lot of demonstration projects if you will, do we expect more of it? And how do we go beyond the headlines of somebody saying, wow, that's interesting, but is it going to be pervasive in the industry? Johanna, what are your views on that in terms of the innovation of zero carbon vessels? I mean, it already is pervasive. And I think the kind of choices that Soren mentioned earlier and that Jan has also mentioned is pervasive in the industry where more and more shipping companies are making this decision to buy only zero emission ready ships, so to speak. And that's a shift that's already happening. I think at the same time we're also seeing big announcements on the fuel production side. So that is, I think at least three or four different stories about big power to X projects happening, including in your region in the Middle East, right? So lots of this development is happening. And so this is only going to go faster, not slower. Okay, good. So we talked about the public-private collaboration at the start of our debate and we have about seven minutes left. I think I'd like to draw a comment from each one of you in about a minute each. What are the two priority asks, if you will, from a regulatory standpoint or from a policymaker standpoint? Soren, you addressed it here about what governments can do, but if I was going to give you a magic wand and say, this is what we need between now and the next five years, what would you suggest they are? From a regulatory point of view, it would definitely be higher ambitions in the IMO and it would be in the form of a market-based measure and market-based measure that includes all greenhouse gases, not just CO2. And I'm saying that because I'm worried about the, I'm worried about the narrative around LNG and also for that reason, it would have to be a fuel that takes the full life cycle from production of the fuel to when we use it into consideration. Okay, good. You're speaking of methane here with the LNG production, Soren. Is that what you're working on? Yeah, I am. I think, I mean, I'm seeing in my own sector that we are seeing lots of people ordering ships with LNG propulsion, which, you know, some will argue with a slightly less, a bit slightly less CO2 than heavy fuel. I think there's actually a technical debate on whether that's true, but what's worse, if you order a ship today for delivery in 23 or 24 and then it has 25 years of life, that means you're going to be burning a fossil fuel until 2048. I mean, there's no way of getting around that. And so it's not a solution for us. I mean, it's just not a solution. And we should stop talking about that LNG as something that has something to do with climate change. Okay, very good. We know what Donald Trump's views were on trying to get that LNG production into the European market, obviously. So there's a change under the Biden administration, of course. Lehun, your thoughts in terms of addressing what I was suggesting here, in terms of policymaker advancements to accelerate this process? Yeah, technology advancement, I need the solution that's cheap, cost effective, something that can scale up for the industry. So for this, I really think that, I mean, if you look back, it's like PV cell, for solar energy, it used to be so expensive, people are not adopting it. So we need the mass scale to take place. And from a policy perspective, more than happy, I'm really looking at industry players coming on board, working with us. And we want to actually move with them to see how to make this, to trigger a larger scale and nudging the momentum faster forward. So technology solution, I think that's the key. Let's put it on innovation. Yes, it's just unleash it if you can, Lehun, I get the message. Yan, I think it's good to hear from you on this thought, particularly from a large commodity group that ships all over the world. Yeah, no, I think some of the things are set right. We talked about the regulation of peace. We talked about the technology piece, which I think is well on the way. I think it will be helpful if governments help to somehow foster these connection points between industries. So between the land-based and the end-of-shipping industry, the infrastructure piece, the setting of standards, safety standards, et cetera, et cetera. I think it will be very helpful that government can actually take a bit of an overarching kind of approach there. And it doesn't become just a energy problem or a maritime problem. And I think that is something that can play a big role in. Yeah, excellent point. Johanna, please, and then I'm going to circle back to wrap up with Rachel. Go ahead. Yeah, for me, I think the two most important things are sort of the support for industrial-scale demonstration projects that can help unlock some of the innovations and bring volume and scale and et cetera, all the benefits that come with that. And I think the other main thing for me is deliver the policy measures that makes zero-mission shipping the default choice going forward. That's what we're doing. Well, thanks, Johanna. Didn't mean to step on you there. In my opening comments, Rachel, and following yours, I was talking about the fact how fast the narrative has changed in the industry. You're an observer here of the industry and what has changed over the last three or four years. Are you satisfied with the pace of the debate that we're having today? We have very candid answers from Soren when we have to revisit LNG and the entire energy chain when making decisions for the next quarter century. How do you see this industry shaping up at the pace that you would like to see? Well, I think what's exciting about now is that we have leaders in terms of ship owners. We have leaders in terms of shipbuilders. We have leaders in terms of port authorities. We have leaders in terms of the fuel production companies. We have leaders on the consumer end of it. So in every point of the value chain, there are now leaders and who are pushing the debate forward. And now, really, policy needs to catch up a little bit. So we need much more R&D investment, absolutely. We need a focus on efficiency. Everything in land has got to be electrified. So set the standards that push that and then set the standards for fuel emissions so that that drives point-to-point innovation. And I think there's no reason why we can't get there. But I mean, from five years ago, where there were a few leaders in the industry, but now to see in every part of the value chain leadership, I think we need to push the public policy and the international cooperation pretty hard now. Okay, thanks very much. Rachel Kai joined us from Fletcher School. Soren Skow from AP Boulder, Marisk. Lehun Kwa, again, from Singapore and the Maritime and Port Authority there as the Chief Executive Officer. Young Deerleman, thanks for staying with us, even when you had that technical problem at the start. You hopped right back in, joining us from Geneva with Cargill and Johanna Christensen, the Managing Director for the Global Baritime Forum, joining us from Copenhagen. Margie Van Gogh, thanks for the invitation again through the World Economic Forum. And I'm glad to see the debate moving more rapidly. And as Rachel was suggesting there, it's the leaders now setting the pace. Again, I've been following this kind of closely for the last five years and it's changing quickly. And let's hope it gets accelerated as we go towards Glasgow at the end of the year. Also a thanks to the technical team behind and the editorial team at the World Economic Forum. The support's been fantastic. And last but not least to our audience, very provoking questions which fostered the debate and the candor that we've had over the last 55 minutes. Thanks again for joining us.