Andreas Solomonides: We will not achieve climate-neutral shipping with one "magic" fuel

Andreas Solomonides, the managing director of BSM Cyprus, talks to CBN about the company’s efforts to achieve climate neutrality – as he explains, the shipping industry will not achieve climate-neutral shipping with one "magic" fuel but rather is looking at a multi-fuel future – while he also refers to BSM’s opening of EU registry trading accounts in Germany and Cyprus as part of its bid to facilitate market access and the acquisition of emission allowances through its extensive network.

He says, “The opening of an EU registry trading account in Cyprus possesses the potential to boost the country’s significance within the maritime sector and demonstrate its ongoing leadership in industry advancements. Cyprus could be the enabler of an efficient implementation of the new regulation and channel activity towards its administering authority, solidifying its position as a key player in the sector's evolution”.

The biggest challenge facing the global shipping industry currently is reaching the goal of becoming climate-neutral by 2050. You recently said that the use of alternative fuels and new propulsion concepts will be of major importance. Can you please elaborate?

The use of alternative fuels and new propulsion systems will be of major importance. We will not achieve climate-neutral shipping with one "magic" fuel but are looking at a multi-fuel future. Meanwhile, we might not be able to switch to these new fuels as quickly as we would like. Therefore, we must make every effort to operate and optimise our fleets more efficiently, pushing them to their sustainability limits.

For example, mid of last year, Bernhard Schulte Offshore, the offshore unit of the Schulte Group, ordered two new Commissioning Service Operation Vessels (CSOVs). The ships will have hybrid battery propulsion and be prepared for methanol fuel to enable carbon-neutral operations. In December 2023, Bernhard Schulte ordered his first CO2 tanker from Dalian Shipbuilding Offshore. The primary fuel for the ship will be LNG. Combined with other proven technologies, such as wind-assisted rotor sail and air lubrication, the CO2 tanker will have around 34% lower carbon footprint compared to conventional ships running on marine fuel.

As a ship manager, our goal is to support our customers in these endeavours. Hence, BSM must adapt to every option, whether this is LNG, methanol, hydrogen, or ammonia. As we navigate the logistical and technological challenges of transitioning to alternative fuels and energy sources, we actively collaborate with owners, charterers, and industry experts to accelerate this process. Our priority is developing in-house expertise in managing vessels powered by alternative fuels through internal efforts and strategic partnerships. For example, together with the Norwegian ammonia specialist Amon Maritime, we created a 50/50 joint venture “Ula Ship Management”, which aims to offer ship management services for the Norwegian market, specialising in ammonia-powered vessels.

The EU’s Emission Trading System (EU ETS) came into effect in 2024. Bernhard Schulte Shipmanagement (BSM) reported that it developed a comprehensive range of carbon compliance and EU ETS management services designed to support owners and operators mastering the complex regulation requirements and to reduce their carbon footprint and related costs. Can you explain a bit more about this?

BSM offers a broad package of measures and value-added services aimed at ensuring a seamless transition to EU ETS. BSM’s services cover the monitoring, collection, and reporting of required emission data, as well as verification for each voyage affected by EU ETS. The company has devised a highly automated, integrated end-to-end solution, enabling the creation of validated emission statements through the authorized third-party verifier DNV and calculation of equivalent allowances for regulatory compliance. This includes streamlining interactions with EU authorities, and administration of maritime operator holding accounts. Leveraging strong in-house IT capabilities, BSM is in the position to provide the entire process fully integrated into its ERP-ecosystem transparently visualised for the customer. An intuitive interface allows real-time oversight of emissions related to EU ETS and compliance status, with continuous monitoring of outstanding emission allowances and timely reconciliation. In addition, BSM facilitates market access and acquisition of emission allowances through its extensive network. BSM has opened EU registry trading accounts in Germany and Cyprus, onboarded a network of providers and implemented EU allowance trading mechanism. We have partnered with selected banks working on emission allowance deposit and safekeeping solutions and with carbon certificate brokers offering trading services. Another crucial component is optimizing the fleet performance. Through continued vessel performance monitoring, BSM tracks major fuel consumption contributors such as the hull, machinery, speed, route, and weather. This approach ensures voyage optimisation, regulatory compliance, and increased vessel energy efficiency. Inefficiencies are promptly identified, allowing for swift corrective actions.

BSM has opened EU registry trading accounts in Germany and Cyprus as part of its bid to facilitate market access and the acquisition of emission allowances through its extensive network. What does this mean for Cyprus?

The opening of an EU registry trading account in Cyprus possesses the potential to boost the country’s significance within the maritime sector and demonstrate its ongoing leadership in industry advancements. Given its strong bond to the maritime industry, Cyprus could be the enabler of an efficient implementation of the new regulation and channel activity towards its administering authority, solidifying its position as a key player in the sector's evolution.

BSM has a central unit that supports performance optimisation and decarbonisation of the managed ships. Can you tell us a bit more about this and what it entails?

Whether it is CII, EEXI, or EU ETS, new regulations and measures aiming at minimising the shipping industry’s carbon emissions call for a more proactive approach towards managing carbon intensity while encouraging data transparency. At BSM, our aim is to enable our crew, shipowners, and charterers to make data driven decisions for most efficient vessel operations that reduces their environmental impact and thus costs and comply with or even go beyond the requirements of international regulations. Through a holistic process of vessel performance monitoring, decarbonisation management, data collection and data analytics managed by our Fleet Performance Centre (FPC), we are helping our customers to optimise voyage efficiency, environmental sustainability and compliance while cutting OPEX, manual reporting and performance claims. Our team of experts uses smart technologies to continuously track and analyse carbon emissions. We identify patterns, trends, and inefficiencies to develop data driven decarbonisation strategies and take corrective actions to reduce emissions. We also work with smart technologies and artificial intelligence to enhance the efficiency of energy management, emission monitoring and data analysis.

Back in 2020, BSM launched a liquid cargo training facility at its Maritime Training Centre in Cyprus. How has this been coming along?

With around 120 gas carriers under full and crew management, of which more than 60 are LNG carriers, BSM is the largest third-party ship manager of vessels in this segment. To ensure safe and efficient operations in this highly demanding segment, the company actively invests in crew training and development through their own training facilities, the Maritime Training Centres (MTCs). BSM’s MTCs have been upgraded to meet requirements of the increasingly demanding LNG sector and offer tailored basic and advanced LNG courses that adhere to 4 industry standards. The MTC in Cyprus was the first of BSM’s training facilities to include an innovative Liquid Cargo Simulator offering realistic training and immersive experience for seafarers working onboard gas carriers and LNG fuelled ships. It made the centre a valuable gas training hub for the whole region and set new standards: today, the MTC in Kochi and Manila are also equipped with LNG training facilities and state-of-the-art Liquid Cargo simulators.