Together with the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMZCS), McKinsey has provided a 104-page framework for assessing potential corridors. According to its authors, the report, titled “Feasibility Phase Blueprint” – “provides an approach for designing and demonstrating the feasibility of green corridors”.
It is intended to serve as a ready-to-use guide for any stakeholder involved in Green Corridors for Shipping Decarbonization and includes over 80 ready-to-use pages outlining the methodology, analysis and illustrative templates to each step of the value chain and across the ecosystem. Importantly, the report is meant to be “a living document that will be refined over time as we collectively gain more knowledge and practical experience in building green corridors.”
The style of presentation is largely taken from the playbook of a high-end consultant who will likely be hired to assess the potential corridors defined here as “shipping routes on which there are vessels in commercial operation using exclusively fuels alternatives”. It’s packed with checklists and graphical diagrams, including flowcharts, timelines, and Gantt charts, to guide “stakeholders” in their assessment of potential trades.
Three types of corridors are defined, a “single point”, a “point to point” (two ports) and a “network” (three or more ports). Assessing the feasibility of a route involves making predictions about simultaneously determined variables too numerous to list. Generally speaking, the main areas to consider are alternative fuel supply chains, port and bunker infrastructure, vessel capacity, and then the demand to move particular cargoes on the route. In the background of all this, there are regulatory frameworks to support all the previous variables.
The report is rich with examples of what micro-parts of the analysis might look like, including excellent graphs showing estimates of future freight demand on a particular corridor, as well as estimates the amount of alternative fuel that might be available to ships, and the “total cost of ownership” surrounding the production of alternative fuels.
The financial aspect of decarbonization is considered corridor by corridor as opposed to general statements like “3 to 4 trillion dollars needed, in total, to decarbonize maritime transport”.
An important analytical step initiated in this methodology is to “define the number of new and modernized vessels with modifications over time”, on a particular route, and then “quantify the capex requirements for the conversion of existing and new vessels” .
Although the McKinsey/MMMZCS report was published at the end of September 2022, a number of green corridors have already been established, albeit through agreements between participants in particular trades rather than through exhaustive studies and formal declarations. . Shipowners Star Bulk Carriers and Oldendorff Carriers have agreed with miners BHP and Rio Tinto to develop a corridor for the transport of iron ore between Australia and “East Asia”, as part of an arrangement facilitated by the Getting to Zero Coalition.
At the recent session of the Global Maritime Forum (GMF) in New York, Svein Tore Holsether, President and CEO of Yara International, described a short sea corridor already in operation in the Oslo Fjord, with the gate -Yara Birkeland zero-emission containers moving boxes that would otherwise be transported by truck.
Other corridors under discussion include a link between Montreal and Antwerp, a container route from China to WC Canada, and routes around Northern Europe via the “Nordic Roadmap”. In his remarks on the GMF, Yara’s Holsether also referenced the First Movers Coalition and its efforts to reach “across value chains” to “create incentives and structures…to think about production and shipment to the final consumer”.
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