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Morten Bo Christiansen
VP- Head of Decarbonization
Maersk

13 September 2022

The past couple of years faced us with the harsh reality of a global pandemic and, most recently, of a war - how are these two events affecting your business?

The pandemic impacted our industry in a highly significant way, feeling like a series of perfect storms that never seemed to end. After a standstill where our customers stopped orders to preserve their economies, the levees broke when governments started injecting money. A never-before-seen imbalance was created, with demand going up in a steep curve and supply rapidly being toppled by people's drive to buy goods, since they could not go on holidays, to restaurants, etc. Since supply chains are complex structures, any kind of shock throws them into a frenzy that is difficult to recover from. The recent congestions in the ports as well as on land (due to a lack of workforce) show us we're definitely not out of the woods yet. The energy crisis prompted by the devastating war in Ukraine is the proverbial cherry on top of an already hard-to-swallow cake of hardships.

Digitalization is an important tool in making supply chains more efficient, how do you use it to your benefit at Maersk?

Six years ago, you would meet people in our industry who could not fathom that someone would go and order a container online. Back then, we made the decision to massively invest in digitalization. We recruited 3,000 to 4,000 data scientists and software engineers that helped us streamline and modernize our processes by adding creative ways in which customers are able to track their containers throughout the entirety of the purchase process. To get rid of inefficiencies in the system, we teamed up with IBM and developed TradeLens which is a platform that totally digitalizes the paper trail using blockchain technology.

20% of the total carbon emissions in the world come from the transport industry, how is Maersk trying to change this discourse?

We have been in global trade for more than 100 years but the proudness of being part of such a solid legacy is matched by the awareness that we are a part of the climate change issue. As a result, a couple of years ago we decided that decarbonizing our company is a strategic imperative as well as a moral obligation. Running global supply chains that emit CO2 is not exactly sustainable for the future and by 2040 we plan to meet the science-based targets we imposed across all our businesses and scopes. We already paved a green pathway for our fleet and we are currently working on solutions for the warehouses, rail systems, air freight and all other emissions. By 2030, we intend to move 25% of our ocean container volumes to green fuels, so significant parts of the fuel that we burn will definitely be green.

How important is for the industry to create demand for green fuel?

 

The usage of green fuel is very much like the chicken and the egg dilemma: we need special ships that can use this fuel in order to produce more of it and vice versa. In scale and cost comparison, green fuel is still a challenge. Maersk spent over $5 billion on fuel last year and this sum would likely have been triple if we were buying green methanol, so we really need to cut down costs, but this is only achievable through producing big volumes.

 

The current alternative is biodiesel which works with existing engines and has increasing popularity. There are customers that demand to get a green product since they already don't have Scope 1 and Scope 2 emissions (they sell sport shoes, for example). In this sense, we signed memorandums of understanding with seven companies that are willing to invest in producing. 

We firmly believe that we need to get production going and technology is going to show us that it can go faster than we can imagine. In the first few years, we will probably need to cover some of that extra cost ourselves but we made peace with this idea and we're ready to absorb this. It's extremely encouraging that there's a lot of support coming from customers throughout this journey of becoming sustainable. For example, Cargo Owners for Zero Emission Vessels is a group of eight leading companies that by 2040 pleaded to only buy zero-carbon shipping.

Would a worldwide centralized measure like a tax on carbon speed up the sustainability process?

The general sentiment is that we need a level playing field and this can only be done with regulatory support, which tends to work kind of slowly at UN level with so many countries having to agree and vote. Shipping is a global industry and having centralized measures would be ideal, but the second-best thing that we can benefit from our regional initiatives such as the EU ETS platform. On top of these, developments would probably go much faster with more regulatory support, like the support we see in the United States.

What would you like to achieve with priority in the next five years at Maersk?

The following few years are really exciting because we are all only getting started and we are going to completely revolutionize the global emission system. Next year we will have the first carbon neutral container vessel sailing on green methanol being produced here in Denmark, so small but meaningful steps are being made towards becoming climate neutral. With investors and customers supporting this transition, there's a lot of positivity towards the future and we actually feel like we are beginning to solve the climate change problem and we not only talking about it.

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