More than a third of the up to 50 respondents thought that cost, sustainable energy and inadequate infrastructure were the major barriers to decarbonisation.
In addition, the respondents said that understanding and compliance with complex new environmental regulations was a key concern. That uncertainty was reflected in the choices by nearly half of those surveyed, who answered biofuel and green hydrogen, when asked which sustainable fuels had the most potential.
Respondents were not limited to the maritime industry, with thes survey reaching transportation specialists across maritime, aviation, logistics, manufacturing, utilities, and environmental services.
Reed Smith’s partner for commercial shipping and maritime law, Thor Maalouf, said: “It is unsurprising that our respondents had more confidence in green biomass derived fuels rather than ‘blue’ fuels. The outlook for likely future regulatory treatment of ‘blue’ fuels, which are created artificially using electricity or other power generated from sustainable sources, is less clear than treatment for green or biomass-derived fuels which have a clearer low-carbon footprint.”
Transportation partner Nick Austin, meanwhile, pointed to the fact that cost and regulatory restrictions were seen as having the biggest impact on the uptake of sustainable fuels.
“This reflects our experience in maritime decarbonisation, where companies are facing new costs, such as EU ETS, and a range of other initiatives such as the IMO’s Carbon Intensity Indicator (CII) which impose both an administrative and economic burden on vessels to reduce emissions,” said Austin.
He went on to say that any fundamental change in marine fuels “will inevitably require both higher cost and new regulation.”
A lack of infrastructure was also a concern for respondents. Austin said that Reed Smith clients believed major investments were needed to develop the infrastructure for new fuels, and that there appeared to be a “lack of commitment from global governments” to make those investments that would support the energy transition.
“Identifying the best solution, taking into account factors such as cost, safety, storage, and scalability, poses a significant challenge. Therefore, we decided to engage directly with our clients, who are deeply immersed in these issues, to gain insights into their forecasts, perspectives, and to understand the biggest challenges they face,” concluded Antonia Panayides, another Reed Smith transportation partner.
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