Building Shipping’s Start-up Culture

By Noah Silberschmidt, CEO, Silverstream Technologies first published in Marine Professional, January 2018

Clean technologies will help us overcome some of the industry’s greatest challenges – but now it is time to rally around them as a credible solution, argues Noah Silberschmidt

It’s clear that shipping is at a crossroads. The countdown to January 1, 2020 – and the implementation of the global 0.5% fuel sulphur content cap – is now well and truly underway, and shipowners need to decide on their strategy. Do they use more expensive distillate fuels to comply with the new regulations? Do they absorb the cost of installing and operating emissions abatement technologies? Or do they focus on converting their fleets to operate on new fuels, like LNG?

The 2020 global sulphur cap will impact budgets at least in the near term, regardless of which route shipowners choose to achieve compliance. According to several industry-leading experts, the most likely intermediate choice for shipping companies will be the adoption of distillate fuels. But increasing fuel bills will add additional strain to already over-stretched operating budgets. Solutions that will help shipowners to mitigate some these increased costs already exist on the market in credible, proven clean technologies. Awareness is growing, and in an industry of tight margins – and one coming under increasing external pressure to demonstrate an environmental conscience – leading lights are now accepting of the benefits of clean technologies in principle, if not in practice.

Charterers are recognising the importance of innovation too. Increasingly, hiring decisions are being made with sustainability in mind, and in a commercial environment where vessel utilisation can be the difference between success or failure, owners must understand that clean technologies can help them to demonstrate their eco-credentials.

We are now calling for the industry to go further. To meet the challenges of the coming years, shipping as a whole needs to embrace its latent potential for innovation.

For the last 10 years, our mission has been to lay down a blueprint for how credible clean technologies can be developed and commercialised within this industry. We have brought our air lubrication technology, the Silverstream® System, to market – often against the odds – with the system now installed on multiple vessels and with a strong pipeline of orders to be announced over the coming year. In helping to create the evidence for the commercial and environmental benefits of clean technologies we have helped to lay the groundwork for wider change within shipping.

But the industry has continued to change over the last few years, and we believe that every company has a responsibility to drive the proliferation of innovative technologies.

The time to drive a step change in shipping’s approach to both its environmental impact, and navigating its inevitable commercial challenges is upon us. The Silverstream® System increases a vessel’s efficiency by between 5 to 8%, depending on its particular characteristics. If just ten more clean technology companies developed solutions that achieved these savings in other areas, there would be the potential to cut shipping’s emissions output by circa 50%. This makes plain the clear and pressing commercial case for clean technologies.

The International Maritime Organisation has begun to recognise this too. Our work with GloMEEP, the IMO’s project aimed at supporting the uptake and implementation of energy efficiency measures for shipping, has shown that there is a definite appetite for supporting innovation at the regulatory level.

Through initiatives such as the IMO’s Global Industry Alliance, which Silverstream joined last year as a founding member, the industry is now coming together to reducing its environmental impact in a way that also profitably navigates the challenges brought about by impending environmental regulations.

Start-up enterprise will be instrumental to this ambition. The operational installations of the Silverstream® System came as a ‘bucking of the trend’ for shipping. It proves that, despite the sector (and, indeed, the wider economy) still recovering from one of the toughest downturns in living memory, innovation is recognised and valued if it is demonstrated with credibility and transparency.

We also believe that a changing international attitude regarding the environment, and particularly how businesses can improve their sustainability, has trickled down into our industry.

However, to capitalise on this, it remains the responsibility of clean technology manufacturers to ensure that they take ownership in bringing their innovations to market in the right way. This is the only way to drive widespread uptake, which in turn is the only way that we will see a significant reduction in emissions from the global shipping industry, whilst also protecting the commercial interests of shipowners and operators.