Ship propulsion: An efficient lever for lowering greenhouse gas emissions

Stick together and protect yourself and others – these are rules for survival that have been followed by seafarers for centuries. But, these days, environmental protection and sustainability also entail thinking about the well-being of future generations. If we want to protect our climate in a lasting manner, we have no time to lose. The urgent need to act is obvious: Glaciers are melting, fertile soils are drying out, and our biodiversity is under threat. We need to be sprinters and marathoners at the same time. In its expanded sustainability strategy, Hapag-Lloyd is focusing on the most efficient levers and has set realistic targets for the next decade.

Making a big difference with a big fleet

The sustainability strategy encompasses not only environmental, but also economic, social and qualitative aspects and measures. An important focus for Hapag-Lloyd will be on clean shipping and future-proof propulsion systems. Hapag-Lloyd can make a big difference by improving the sustainability of its own fleet, which is made up of over 240 vessels. In this case, greenhouse gases, clean air and sustainable supply chains will play a major role.

Of course, container ships are already the most efficient means of transport when it comes to transporting large quantities of goods, but there is still some room for improvement here. By making changes to the propulsion systems of its ships, Hapag-Lloyd is also making a positive contribution to efforts to protect our health and environment. For example, using the low-sulphur fuel oil mandated by the International Maritime Organization (IMO), the liner shipping company was able to reduce the sulphur-oxide emissions of its own fleet in 2020 by around 70 percent compared to 2019.

Acting consistently and resolutely

However, climate change – caused by greenhouse gases – remains the greatest challenge. “The fact is that shipping as a whole is responsible for roughly 3 percent of all greenhouse gas emissions, and this is precisely where we want to and must get better,” says Ulf Schawohl, Head of the Regulatory Affairs & Sustainability unit. The six state-of-the-art container ships that Hapag-Lloyd recently ordered will emit between roughly 15 and 25 percent less CO2, as their fuel-efficient high-pressure dual-fuel engines will also be able to operate using liquefied natural gas (LNG). Using LNG is currently considered the best and cleanest option available. However, on the road to decarbonisation, fossil LNG must be replaced in the medium term either by hydrogen-based, synthetic natural gas (SNG) or Bio-LNG.

Hapag-Lloyd has also taken a sustainable approach to financing these newbuildings by concluding two green financing transactions for them that are in line with Green Loan Principles of the Loan Market Association (LMA). In addition, the shipping line has placed its first sustainability-linked bond on the market, and it is linked to Hapag-Lloyd’s sustainability target of reducing the CO2 intensity of its fleet by 60 percent compared with 2008, the reference year of the IMO, by 2030. As a result, environmental efforts cannot be separated from economic activities.

Letting customers decide

Sustainability must be measurable and comparable. Responsible action is also becoming an increasingly important factor that customers take into account when selecting the carrier that is right for them. “We will be pursuing our sustainability goals with resolve over the next 10 years – which is a timeframe that allows for a realistic overview,” says Ulf Schawohl. “We will gradually increase our contribution to sustainability-related efforts and to achieve continuous improvements.”