Carrots or sticks – an age-old metaphor used to discuss what works best to motivate and direct behaviour towards desired outcomes. Are rewards and incentives efficient means to facilitate progress or would threats of sanctions and penalties be better? Is regulation always needed to ensure compliance or are there other ways to accommodate conformity? How to decide which measures to use?

These questions, and many more, were discussed at ECOPRODIGI’s policy seminar Carrots or sticks – what measures are needed to foster the implementation of clean shipping technologies? which took place at the Forum Marinum Maritime Centre in Turku, Finland on 21 May 2019. As ECOPRODIGI’s project manager Milla Harju explained to the audience of over 50 participants from around the Baltic Sea region, the seminar was organised to serve one of ECOPRODIGI’s main objectives: to strengthen public support for maritime industry digitalisation. To this end, the project and its policy seminars aim to provide fresh, industry-driven ideas for policy-makers on how to support the digitalisation of the maritime industry by facilitating interaction between industry representatives and regulators. In order to foster the exchange of opinions and ideas, the seminar programme was crafted to accommodate views from both the private and public sector. The seminar also included a presentation of the project’s industry case focusing on optimising shipyard processes which provided the audience with information about the work done and progress made in ECOPRODIGI.

Policy approaches to sustainable maritime logistics and protection of the seas

The first keynote speaker of the seminar was Eero Hokkanen (Senior Specialist, Finnish Ministry of Transport and Communication, Climate and Environment Unit) who discussed Finland’s policy approaches to sustainable maritime logistics and protection of the seas. Mr Hokkanen emphasised the fact that, due to the country’s location, Finland is basically an island and very dependent on maritime logistics. It is therefore essentially important that maritime transportation is conducted in a sustainable manner. According to Mr Hokkanen, the Baltic Sea region has made some good progress with SECA and NECA approaches to control airborne emissions but the challenges in protecting the seas are still huge, especially in terms of reducing GHG emissions in international shipping.

Eero Hokkanen delivering the policy-side keynote.

Reflecting back on IMO’s Marine Environment Protection Committee’s latest session, Mr. Hokkanen noted that some of the best ways to combat the challenges include improvements in ships’ energy efficiency, reductions in methane slips and emission of Volatile Organic Compounds, support for research and development, promoting the uptake of alternative low-carbon and zero-carbon fuels, and incentive schemes for first movers. When it comes to digitalisation, Mr. Hokkanen emphasised that digitalisation can serve as a tool to scale new solutions and thus pave the way towards GHG emission reduction goals.

Digitalisation as a way to remove inefficiencies in shipping

The second keynote speaker of the seminar was Tero Hottinen (Director, Emerging Digital Business, Cargotec Corporation) who discussed digitalisation from the maritime business point of view. According to Mr. Hottinen, digitalisation is changing the landscape in maritime logistics as digital solutions, greater vessel automation and unmanned ships are increasingly disrupting the industry and its traditional way of thinking. This disruption is a welcomed phenomenon, noted Mr. Hottinen, as digitalisation is one of the main ways to remove inefficiencies which are currently causing the shipping industry to lose billions of euros as well as harming the environment in various ways. Mr. Hottinen explained that with the help of digitalisation, maritime logistics is able to eliminate inefficiencies holistically, including operations and activities at sea, at port, and at intermodal transfer.

Tero Hottinen discussing digitalisation from the maritime business point of view.

So what is hindering the development? According to Mr. Hottinen, commercial factors are extremely important and efficient – to both advance and delay the progress that is being made. It is challenging to stir established traditions, especially when the old way of doing things is still business as usual to some. In addition to commercial factors, siloed systems are among the biggest bottlenecks to digitalisation.

Who should steer the transformation?

The seminar’s panel discussion revolved around the topic of public and private sector actions in the digitalisation of maritime industry. The panellists Anssi Lappalainen (R&D Project Manager, Ship Intelligence, Kongsberg Maritime Finland Oy), Ari Viitanen (Chairman of the Board, Carinafour), Johanna Salokannel (Project Manager, Sea Traffic Management Validation), Johannes Hyrynen (Vice President, Digital Engineering, VTT Technical Research Centre of Finland Ltd.) and Vilja Klemola (Senior Specialist, Ministry of the Environment) discussed the topic from various perspectives and used their own expertise to bring ideas and opinions forward. The panellists recognised the traditions of the maritime industry, the indeterminate nature of the future and its unknown requirements, and the pace of technological development vs. the relative slowness of policy responses as the main challenges affecting digitalisation. At the same time, the panellists largely agreed that the pressure towards change is increasing as global competition is intensifying and environmental concerns are mounting. This necessitates responses and actions from both the public and private sector in the form of both carrots and sticks. Cooperation between the sectors was also highlighted as crucial in addressing the challenges and reaping the benefits of digitalisation.

Digitalisation of maritime industry – who should steer the transformation?

Carrots or sticks?

So, as the seminar day drew to close, were we any wiser in terms of what works best: carrots or sticks? Based on the discussions and opinions heard during the seminar, it seemed that many were willing to err on the side of a happy medium. In other words, carrots in the form of incentives and supportive frameworks are useful in encouraging  industry actors to take action but, at the same time, sticks such as regulatory instruments are still needed to advance objectives set at the policy-level. Cooperation between the private and public sector was raised by many as an important factor contributing to finding the best methods to support and direct the development towards more sustainable shipping. These issues and many more will be discussed further at upcoming ECOPRODIGI events.

The seminar attracted interested participants from around the Baltic Sea region.