Sofie van der Enk: Welcome to the Supply Chain Talks podcast. My name is Sofie van der Enk and in season 2 of this podcast, I will dive into the world of sustainable container supply chains. As decision makers, cargo owners, and freight forwarders play a key role in boosting sustainability in the logistics chain. But how do you build a c o two neutral and at the same time resilient supply chain? And what are the possibilities and standout examples that exist today.

Reduce, replace, rethink is a concept that can be used as a strategy to decarbonize your supply chain. In each episode, I will dive into one of these three concepts with container industry experts. This episode, we're talking about replace, and we'll dive into sustainable container shipping, replacing fossil fuels with renewable fuels, the fuel switch obviously. It is vital that the shipping industry makes this, switch to renewable fuels to achieve net zero emissions by 2050. And what are the options for these huge container vessels that facilitate international trade?

And how challenging is the fuel switch? What role can cargo owners play? Joining me to find these answers are Naomi van den Bergh, the, Port of Rotterdam Authority. That's where you work. Good to have you here, Naomi.

Yeah. Thank you. And Elias Mohammed from Carrier HAPAC Lloyd. Really good to have both of you here to talk about this super important topic because if you guys can manage to really make a change, we do it on a huge scale. So that's exciting.

Elias, to start with you, can you maybe introduce yourself? You're originally from Pakistan, and now you work at HAPAC Lloyd. Why do you feel passionate, about this topic, and what do you do there?

Ilyas Muhammed: Yeah. Good morning, and thanks for inviting me to this podcast. So, I'm working as a head of Greenfields at Hapag Lloyd, and the passion basically comes from, the way the work which we are doing is basically creating an impact in terms of reducing the greenhouse gas emissions. Mhmm. And I grew up in Pakistan and my hometown is located in between 2 largest rivers in Pakistan and we I mean, we as a community have seen the firsthand effects of climate change in terms of floodings.

And this year, we hear that, in Himalayas, there there will be less there was less snowfall. So there is a there is a likelihood that there will be droughts, in the summer of this year 2024. Wow. And while, working at Humber Lloyd, I see that I I can create this impact by reducing our as a company we can, by switching from fossil fuels to renewable fuels, we can reduce our greenhouse gas emissions and, and and create an impact in reducing the global warming and climate change.

Sofie van der Enk: Wow. Yeah. So because of your background, you really understand, in a in a very real way the effects of climate change, and that makes you want to make change.

Ilyas Muhammed: And also, like, I'm coming with the engineering background. So I previously was working for Shell and Holotopso and and worked with oil and gas projects previously. So I understand what it takes to develop greenfields projects. Right? And having this, let's say, personal motivation to bring this change along with having this, strong industrial experience, really helps in developing the supply for the green fuels.

Sofie van der Enk: I'm so curious to hear way more, about, how we can go about this and and and help our listeners get inspired, on, yeah, how to make this switch to to green fuels. Naomi, really lovely to have you here.

Naomi van der Berg: Thank you.

Sofie van der Enk: Rotterdam obviously plays a vital role. What is your role? And do you share that same passion as Ilias?

Naomi van der Berg: Thanks yeah so, my personal role here is to work on sustainable transport so, very heavily linked to what Ilias is doing and I think looking at that sector and looking at how we achieve that I think you can say that shipping is with right a hard to abate sector so for my personal passion for shipping and sustainability it is really interesting to work her because we need to do a lot still and I think that's where you can have a lot of impact so that's where, where I come from. My background is in marine engineering so I'm, I used to work in shipbuilding started 8 years ago and at that time sustainability was not very high on the agenda in any organization. I mean you cannot say that now it's it's very in in such a short period of time a lot of change has come about I think in that sense. But for me it has has led to me for 1 year leaving the maritime sector to work in Uganda in a completely different sector in a clean cooking sector and then I was very happy to, come back to the Netherlands and be able to join port of Rotterdam because Rotter dam is a huge energy hub and this is where shipping and energy come together and where we need to make the change and see the difference.

So, so that's where my, passion, comes from.

Sofie van der Enk: So few things. 8 years ago, this was not high on the agenda, but we know where we're headed. Right? So 2050, net zero, still a lot needs to happen. Where are we today on that sort of trajectory where

Naomi van der Berg: We are at the beginning still. A promising beginning but unfortunately still the beginning I think we're taking first steps but it's really the first steps that show that things are possible. But there's a long way to go. I think, yeah, we set the target with the world. Hapag Lloyd has a more ambitious target to be net 0 by 2,050.

So that's still quite a few years from now, but we need to start making the change today to be able to achieve that.

Sofie van der Enk: To actually yeah. What do you see happening then in terms of sustainability?

Naomi van der Berg: So I think if you if you look at Rotterdam and at the port complex, there are more than a1000 companies active here and and 30,000 ocean going ships call our port every year and all of these organizations have their own agenda and are working on their own things to to make the changes so if we look at the port it's an energy and a resource transition and you see things happening from solar panels being placed on buildings and and being used, to for example bio refineries developing in the port, enlarging in the port, but we're also looking at different energy carriers. So whereas the port now still is quite fossil based, we're looking at, for example, hydrogen derivatives. So, yeah, another way of transporting energy would be through hydrogen, and and and ways of actually transporting hydrogen is in different, molecules, But that's something that will come up and we see developments now to put the basic infrastructure in place for that and that's very relevant also for the maritime industry.

Sofie van der Enk: Are you are you seeing that, as well, Ilias? No, indeed. I mean, at Harbour Lloyd, we have,

Ilyas Muhammed: the strategy to be carbon net zero carbon by 2,045 and we also have, 2030 target to reduce our carbon intensity in terms of EUI.

Sofie van der Enk: So you can do 5 years faster than Holterdam?

Ilyas Muhammed: Hopefully. Yeah. But as Naomi said, the challenge is actually that we are still at the beginning stage. Mhmm. And in order to understand this challenge completely, we need to understand the whole supply chain of green fuels.

Right? Because the supply of green fuels is not there and we need to create that supply.

Sofie van der Enk: Yeah. Naomi, what's happening in the energy transition? So when it really comes to that fuel switch, you just mentioned that there's multiple means of of transporting, the hydrogen, like, what's happening in terms of that here?

Naomi van der Berg: Yeah. So I think if you if you look at Rotterdam as an energy hub, we've both had local production and imports already over bio based perspective so that's the 2 pathways you can base it on electricity you can base it on biofeedstocks so for example manure or or other yeah elements that we already have in nature if we're looking at that then we look both in Rotter dam. The production is going to change. So local production will be will be different, will not be fossil based, will be bio based, and we also see electrolyzers that are being built in the port. So that's for the production of hydrogen.

Factories that will produce hydrogen. But we're also going to be importing a lot of energy. Already now, Rotterdam imports 13% of the EU energy demand and over time, we still need to do that because we do not have enough renewable sources here in Europe for the demand that we have.

Sofie van der Enk: Yeah. Ilias what do you see as as the most suitable, alternative fuel? Because there's a lot of debate. Like, what's it gonna be? Because there's so many options right now, electric options.

And then even in the biofuels, there's many different options.

Ilyas Muhammed: I mean, at the moment, what we so we are already consuming, green fuels, right, in terms of biofuels. So we we are already bunkering biofuels at Rotterdam port. And and and I think overall Dutch government has, introduced this, HPEG subsidy system which helped a lot the maritime sector to scale up, biofuels consumption in in general. But of course, there is a limitation of biofuels availability and and if you look at the overall numbers, right, so there is like 66,000,000 tons of biodiesel production capacity in the world. Right?

And most of this biodiesel production is from 1st generation biofuels and only 9,000,000 tons of this production capacity belongs to waste and residual, materials. Right? So only 9,000,000 tons of biodiesel production is there which can process used cooking oil or animal fats as a feedstock. Right?

Sofie van der Enk: Of that 66.

Ilyas Muhammed: Yes. And then out of that 9,000,000, we we have only 460,000 tons of bottoms of that product, which is FAME residue, right, which is, which is kind of a product which maritime sector can consume while not competing with road transport or other sectors. Right? And and it's it's a tiny quantity. And if you look at overall consumption of maritime sector, it's 320,000,000 tons.

Sofie van der Enk: Oi. Yeah. Okay. So there's a gap.

Ilyas Muhammed: So there's a big, big gap. So the so that's why it's very it's challenging to scale up biofuels. 1, that there is no production capacity there. And secondly, the feedstock is also not there. Yeah.

Enough amount of feedstock. But what's the alternative we have is then move to bio LNG. And then within bio LNG, we again compete with similar feedstocks.

Sofie van der Enk: What is that bio LNG?

Ilyas Muhammed: Yeah. So bio LNG is produced from, biomethane, and biomethane is produced from, organic food type of feedstock. Right? And the technology which they use is called anaerobic digestion, and it's similar to our stomach, basically, that you dump all the food waste in a digester, and it converts this food waste into methane.

Sofie van der Enk: Okay. Yeah. Right. I think it's what our cows do too. Right?

Is that the methane gas? Yeah. All the stomachs in the world, they do that. And cows just have a lot of stomachs. Yeah.

Yeah. Okay.

Ilyas Muhammed: And and, of course, then, cow manure is also a feedstock to produce methane in these digesters, because these digesters can take an any any sort of organic residue as a feedstock and convert it into methane by, by by because there is a bacteria in the commune, which then reacts with the molecules and converts it into methane. And then this methane, we can purify and liquefy and then use it as a bio LNG product.

Sofie van der Enk: It sounds complicated.

Ilyas Muhammed: It is complicated, but, I mean, the technology is mature. Right? There there are already, significant amount of production of, biomethane in general in in Europe and overall in the world. Moving to the next step is, of course, we, we then see, okay, what we can scale up and there we have, methanol and ammonia. Mhmm.

These are the fuels which we can in future scale up.

Sofie van der Enk: Yeah. So the the global container shipping sector, of course, is a huge sector. We know we need to scale up to to actually make sure that the the sector has enough. So I assume it's a huge challenge to to change that. In in in my eyes, but I might be wrong, but it's a bit of a conservative industry.

And and if things work the way they do, and even though we are creating a problem somewhere between 2 rivers in Pakistan, we might not be feeling it yet. So the the sense of urgency, you know, is it's we're getting there, but it's slow. What is needed? What what can enable this fuel switch? What what might trigger this sector?

Naomi van der Berg: Yeah. Well, I think from our perspective, we look at it through the the 3 a's so to say so we say it needs to be allowed it needs to be available and it needs to be affordable. And if you're talking about a trigger, it may actually be in the allowed part. So regulations that motivate actually ship or actually obligate people to start moving while there may not be you know in the end a business case yet because that's that comes back to the affordable. So if we if we look at available affordable allowed, there's a a role to play for us, a support authority to make sure that at least it's possible to bunker those fuels in the port so that the regulations are in place and the procedures are in place to safely be able to bunker those fuels and also together with the entire ecosystem in the port to make sure that the infrastructure is there.

So for example, bunker barges. Now, if we look at the I mean, that's not easy, but we can manage that. We can oversee how we achieve that. But if we look at the major challenge and it comes back a bit to to what Ilios was just saying is is that connection between availability and affordability. And we always coin that as the chicken egg issue in in maritime.

So what the chicken egg, we we know they're there. We don't know which one was first. So that's fun to talk about. But if we're talking about, fuels, then the question is, which one will come first? Will the demand come first or will the supply come first?

Sofie van der Enk: Mhmm. And do you have examples of of companies that are sort of wanting to make that step, but are are sort of waiting for for both those conditions or what what what then? Because if you talk about these 3 a's, available, affordable, allowed, those are conditions you need to meet. But is that gonna be the trigger to actually do it once it's possible? If the alternative is also available affordable and very allowed and very easy.

Naomi van der Berg: I think there is enough societal pressure and also I think intrinsic motivation with a lot of people to make a difference. But of course if we look at the original definition of sustainability in the end it needs to be profitable as well otherwise your company will not be able to survive your your changes so that's not a long term perspective so I think yes if those conditions are met and things are moving to meet those conditions and I think it's interesting to also hear Eos perspective because you're trying to do this as an organization but then I I really think it is possible and yeah we're also looking at finding new levers to achieve this sooner rather than later so to accelerate this.

Sofie van der Enk: Yeah. Yeah. So what, actions is, Hepat Lloyd taking to to accelerate the transition? Is it just meeting those 3 a's and then go with it? Or what kind of resistance do you still encounter?

Ilyas Muhammed: The way we are working on it is that, we are, working across the globe with different project developers who are trying to create the supply of the green fuels

Sofie van der Enk: Mhmm.

Ilyas Muhammed: And then supporting them with the with the offtake commitments, which can then help them, to raise the project finance, and then make those projects happen, right, and create the supply. But what we see the challenge is that the future green fuels such as, ammonia and methanol, they the, the cost base for those fuels is very high and much higher than, as compared to what we see now for the fossil fuels. Even if we include EUA taxes, into that, equation, it still doesn't help.

Sofie van der Enk: Oh, yeah. Yeah. That doesn't help with the affordability.

Ilyas Muhammed: No. Not and and also, like, we have another legislation in Europe. It's called fuel EU maritime. It's also the ambition level until 2035 is not that high. So it does not create significant demand for green fuels.

So we we see that, that there is let's say from the regulatory side there is no big pressure to, to create or to develop these projects and create, to, to make the commitments based on these obligations which these regulatory bodies could potentially introduce

Sofie van der Enk: Right.

Ilyas Muhammed: Which which which are not there.

Sofie van der Enk: What do you think about this?

Naomi van der Berg: I completely agree that regulators are the ones that can really help you know get things moving Preferably, yes, ambitions of regulators are higher. I do think that we can also be positive that at least regulations are being implemented now because this is the 1st year, 2024, that maritime is actually part of such regulations. And the EU is just big enough to be able to do that because preferably indeed you would do it on a global scale and you would have a completely level playing field across the globe. So that's why we're also looking at the international maritime organization that can set such ambitions, rules, regulations for the entire globe. So I agree.

We would love to to see everything slightly more ambitious. On the other hand I think we should also be very positive that there is a a package that will move this I think the major challenge that maritime faces different from other maybe transport sectors is that there is no single solution. So we cannot say it will be, for example, let's say methanol. There will be a range of of fuels and as a port, we're preparing for all these different fuels. But having a mandate in place does not tell the fuel supplier yet which fuel they need to produce because there's still a range of fuels they could be looking at.

So that's the the challenge still in that chicken egg situation that we don't yet know what to bet on and I think if we can find a way to overcome that that's really, really helpful. And and I think also Hapalhoit is much further ahead than many other ship owner operators, of course. So that's also where there's still a difference in the market because shipping used to be pay buying bottom of the barrel fuels on the spot market. And now we're looking at long term contracts because investments in production facilities take years. It's not something we will do in in a year or weeks and and take 1,000,000,000.

So that's also a big challenge.

Sofie van der Enk: You make huge investments and and and a lot of people are are a bit wary. Like, are we really going to dive into these green fuels? But Hapag Lloyd is already doing it. So can you really break this down for us? What does that mean?

Ilyas Muhammed: So all hapa colloid owned vessels, they can run on biofuels. So we have already upgraded whatever upgraded were upgrades were needed to run them on the biofuels.

Sofie van der Enk: And does that require change within the the ship or the engine or how do you do that?

Ilyas Muhammed: So the with the drop in biofuels, we don't need significant changes. Right? But if we switch from, from fossil fuels to LNG, then, of course, it requires a retrofit, and we did it previously. We retrofitted 1 vessel from fossil fuels to dual fuel LNG, which you know we're gonna run at bio with BioLNG. And, but of course, with the methanol, there's a it's a very different engine because the methanol energy density is half the energy density of fuel oil, so you need double the size of the storage tanks on your ships.

So and and ammonia is also a whole new game. Right? It's refrigerated liquid with, with toxicity and safety issues. So there are a lot of changes needed, but I think or the fuel which can save shipping sector will be the fuel, like, biomass, pyrolysis based drop in biofuels.

Sofie van der Enk: Okay.

Ilyas Muhammed: And there is a, right now, those fuels are not, stable enough to be used as a fuel in the shipping sector. So there

Sofie van der Enk: is a And there's an issue with availability, or do we can we scale that up?

Ilyas Muhammed: Yes. We can scale that up. There is a lot of feedstock available. The issue is with the technology. Yeah.

And then, for the maritime sector, these drop in biofuels made from biomass pyrolysis are very attractive because then these fuels cannot be used in other sectors, such as road transport or aviation because they are dirty enough to be consumed by the maritime sector, but not by the other, like, 4 stroke engines or jet engines. No. And like Naomi was mentioning, I mean, historically, maritime sector has been using bottom of the barrel, right? The bottom the residual material from the crude distillation unit in the oil refinery.

Sofie van der Enk: Because ships aren't picky? They they can run on anything?

Ilyas Muhammed: So the engines are big. So, they are 2 stroke big engines, and they can consume, relatively, dirtier fuel as compared to, to 4 stroke engines in cars or trucks.

Sofie van der Enk: Yeah. So the drop in biofuel, that's what you're betting on. What do you think? What's gonna be the winner?

Naomi van der Berg: Yeah. That's a very difficult difficult question from our perspective we are not the ones in the end who need to run the ships on these fuels or need to produce the fuels we need to provide the platform and the ecosystem where this can happen so we're actually, fuel agnostic in our approach that we're trying to facilitate all the fuels at the relevant timeline. So if Eos is coming to me and saying well next week I would love to then probably that's too soon but if for example ammonia is not yet mature yet so methanol has been bunkered in Rotterdam also green methanol has been bunkered here for example ammonia is a fuel that has a lot of interest in the maritime sector but the engines are not available yet so technically you cannot sail on ammonia yet but they will come hopefully this year So as a port, we keep those timelines in sight and then say we cannot be a bottleneck for this. So that's what we're working on. So it's a very boring answer but we're not betting on any fuel.

We're trying to

Sofie van der Enk: Facilitate anything. Facilitate everything.

Naomi van der Berg: And and whereas Rotterdam, we're the 2nd largest bunker hub globally so we have the luxury I think to be able to facilitate this also because we have lots of storage capacity etcetera, etcetera.

Sofie van der Enk: Because at the same time, you're also still providing fossil fuels for the companies that that need and want that still.

Naomi van der Berg: Yeah. The port ecosystem still does that. Yeah.

Ilyas Muhammed: Yeah. And that's I think that's the right strategy. Right? But but in the end, we need to see, okay, on the supply curve of the green fuels, which, so the fuels which will be enabled first will be the ones which are most cost competitive. Yeah.

And then the, and when we will mature the supply of those fuels, then the next marginal fuel will come. Right?

Naomi van der Berg: Mhmm.

Ilyas Muhammed: So at the moment, it's biofuels, and and when and as the let's say, regulatory demands pick up and voluntary demands pick up, for the green fuels Right. Then we will exhaust the supply of the biofuels, carbon biofuels. And then, of course, methanol will come into the picture of of I think before that, bio LNG will come into the picture because at the moment, you we can, we can defossilize our LNG vessels, easily with the bio LNG. Yeah. And methanol production capacity is not even there.

Right? Yeah. So the only methanol which can be produced is by using biomethane Yeah. Which actually you can directly use as a fuel. Right?

And where and and that just is also ironical because biomethane has, let's say, more than double the energy density of methanol. So you need less amount of fuel as a bio LNG as compared to methanol.

Sofie van der Enk: Yeah. Because the the idea of having having more space occupy your ship to just carry your fuel

Ilyas Muhammed: Yeah.

Sofie van der Enk: Doesn't seem like a very attractive thing when you are a cargo ship.

Ilyas Muhammed: Yes. Yes. Yes.

Sofie van der Enk: Right?

Ilyas Muhammed: Yeah. And then, of course, but if we look in the long term, let's say for, let's say in the end game, then comparing methane versus l, versus methanol, then methanol has its advantages.

Naomi van der Berg: Mhmm.

Ilyas Muhammed: But in the short term, medium term, I think bio LNG is more preferable Yeah. Greenfield.

Sofie van der Enk: If I get you right, it's like it's all about pushing it forward. Just keep pushing it forward. What's what's available now is available now. We're gonna work with that. But the the the technology is gonna continue to develop.

And, and yeah.

Naomi van der Berg: Yeah. True. But but I think that will only happen if we find a way to address the cost gap and and it is maybe important to note that and correct me if I'm wrong Ehlers but about 70 to 90 percent of the operational costs of a ship operator are in the fuel so that's an insane premium if the fuel is, for example, twice as expensive. Yeah. So either fossil should become less cheap or we should reduce the price of, of the renewable fuels and that comes with scale so we need some intermediate scaling mechanisms that will help us to make it more attractive.

Sofie van der Enk: Yeah. And then you point to regulations obviously because if if if fossil still is cheap then of course that's gonna be a very attractive Yeah.

Ilyas Muhammed: We need to tax fossils, right, on the c o two emissions, and more that tax becomes higher, the more viable becomes the business case for green fuels.

Sofie van der Enk: Because then there's an incentive, of course. Yes. You you really make a big point that transparency in decarbonization is very important. Well, you're giving a lot of insight into your business, so that's great. Why is that so vital?

Ilyas Muhammed: Because, I mean, we we are doing decarbonization for the betterment of the world. Right? Betterment of the planet and overall, the business is business. We sell our containers, containers to our customers, and the way we are commercializing sustainability is through our ship green product, which customers can purchase and transport their goods based on biofuels consumed, for the transportation of those containers. And the way we do it is on a fully transparent basis.

Naomi van der Berg: Mhmm.

Ilyas Muhammed: So the customers, they can see, the, the index which we use. It's publicly available index for biofuels, and they can see, okay, how much has how much has been the improvements or decrease in index. So based on the changes, in the index, of the biofuels, the price, we adjust the premium on the ship crane. Mhmm. And that is fully transparent.

And if and we believe if we don't do this, if we don't create this transparency, then customers will feel that, okay, they are, because they they are paying also on voluntary basis. Right? There is no regulatory push or, penalty for them to, to not to do it. But, of course, they have a brand value and soft recognition. But still, I think we, as a company, we need to keep it fully transparent that the premium we charge on ship green is, is seeable and it's not overly charged.

And same actually we expect from our fuel, green fuel suppliers. Mhmm. And they have to be also open and transparent. Mhmm. Because if they start adding fat, our fat on the product production costs, then the greenfields will become even more and more expensive and nobody will be able to consume them.

Yeah. And like for example in the in the fossil market, market is more or less mature. Right? I mean, in different countries, there is a different level of cost of production of crude oil, and then, of course, the marginal producer is setting the price, right, in the overall market. But the green fuels market is evolving.

So there is no, let's say there is no clarity what is the production cost of 1 fuel versus another fuel. So and depending on the, project's locations and availability of the feedstocks and the incentives by the governments, the production cost can vary from region to region. So therefore, it's important that we create transparency on the fuel side and also we should give the same transparency to our customers so that, everybody can trust that this is new evolving system, but nobody is taking any unfair advantage of it.

Sofie van der Enk: Yeah. Yeah. I think maybe with any new system, trust is very important because we're still building it very much. So if I am a cargo, owner and I'm I'm seeking out opportunities to make this switch. Is is the port of Rotterdam here to sort of help me decide or to to to help me understand what the what the options are?

What what role can you play?

Naomi van der Berg: Yeah I think what we're here for is to say that it's indeed important to consider your transport as something you can influence on the sustainability of your transport and, we call that insetting so you can compensate for your emissions by offsetting I think maybe we also do that personally sometimes you can for example say planting trees somewhere which is not bad but if you do insetting you do something similar it's somehow disconnected from your actual transport so the actual movement of your container but you're paying for a share of renewable fuel that is an equivalent of the transport of that container and that way

Sofie van der Enk: saved in some way

Naomi van der Berg: yeah well and and and you could even say reduce maybe because you're actually making a difference in your own value chain and by that you help, well reduce the cost gap and and help the sector overcome that chicken egg issue so you're helping developments and innovation in the sector to really come to that scale so that's how we view it, and that's what we want to support. If you are a cargo owner and you're already willing, then you're a front runner because we see that there's a lot of cargo owners that maybe want to do something, but they're not very sure. And, also, the price tag is still pretty significant. So, of course, that's also a consideration. So we are trying to spread the word that it's possible, that it's important to do, and we're also setting up small projects around this.

So, for example, we had a switch to 0 campaign together with a fuel supplier here in the port where they provided this service of insetting to those cargo owners and together with those cargo owners we we reduced almost 200 wait 2,000 tons of sears who let me not exaggerate which is limited but it's a first step and that's what it starts with. So and and the ship green program does exactly the same so we're not, we're not going to say which one is better. I think transparency and the transparency the green chip program provides us very impressive and very important. We're here to show that it's possible.

Sofie van der Enk: Yeah. Ilias, as a front runner, maybe you can give some advice to to someone who's looking to make this change. Where where to start?

Ilyas Muhammed: So the advice would be for the policy makers that they should look at the overall supply chain. Mhmm. Right? Starting from the fuel production and the investment in the fuel production, and then ending with the consumption of those green containers. Right?

So and then there are lot of different companies involved in this whole supply chain, and the policies should be made in a way which can incentivize or penalize for the parties who are either emitting, the fossil c o two emissions or and then either it should incentivize to to for those companies who are consuming green fuels

Naomi van der Berg: Yeah.

Ilyas Muhammed: In a way that we create, let's say, cost competitive environment for the companies who wanna decarbonize, who have the ambitious agenda so that they are not outcompeted in the business, but they can still remain in the business, in a healthy environment financially while also, doing the decarbonization.

Sofie van der Enk: Absolutely. That's in terms of policy, but you, have done it as a company even with the policies that are in place right now. So it is possible?

Ilyas Muhammed: It is possible. And I would say it's thanks, thanks to our customers. Right? Those, front runner cargo owners who are buying ship cream from Hapac Lloyd.

Sofie van der Enk: Mhmm.

Ilyas Muhammed: And they are actually contributing into the decarbonization of the shipping sector. We as a shipping company, of course, we need to expedite our efforts in creating the supply for the green fuels and motivating the project developers to to develop this supply on the most cost effective basis so that our cargo owners who are our customers, they see the lowest c o two abatement cost.

Sofie van der Enk: Mhmm.

Ilyas Muhammed: Because at the moment, they are paying high c o two abatement cost. And our intention is that we should lower it as much as possible and bring it to 0 in the end. So that they nobody should pay them extra because then our all system should be evolved at a level where we are competitive, I mean, in terms of green fuels that, yeah, that we achieve the decarbonization without having any cost impact on anybody. Right? Absolutely.

That would be the ideal goal. Right?

Sofie van der Enk: Yes. Definitely. Well, there's a lot to do until 20, 45 or 2050 or whenever we can make it happen before that, but that might be tough. We've we're setting high goals for ourselves, at least you are. So thank you for sharing a little bit on how you go about that, what the different options are, and and trying to really give some hands on examples for people that are listening and share this ambition with you.

Yeah. The supply chain of the future, of course, is sustainable and, and an efficient supply chain, and the future is now. It needs to be happening now. Thank you so much, Ilias, Naomi, for joining me, today and and shedding light on how you're both working towards the supply chain of the future. In the next episode of Supply Chain Talks, I will be joined by IKEA.

Elizabeth Fauvelle Munck af Rosenschold: For us, in IKEA, first of all, we do not believe that that sustainability should come at a premium, that you need to pay more for sustainable products. I mean, sustainable products should really be the better option, the option that you choose for the benefit of the environment and the customer.

Sofie van der Enk: If you wanna know more, check out portofroterdam.com/container shipping. Thank you again for joining us. Feel free to share this podcast with others that might be interested in the topic, and please tune in again. Thanks for listening.