A Q&A with Quadrise PLC (AIM:QED) CEO Peter Borup about the challenges and opportunities facing the shipping industry amid regulatory uncertainty.
He discusses how Quadrise’s MSAR and BioMSAR fuels offer cost-effective, lower-emission alternatives, and how shipowners can take proactive steps while global frameworks evolve.
Proactive: The International Maritime Organization's delayed adopting its net zero framework for another year. What's your reaction to that decision and what does it mean for the pace of shipping's decarbonisation?
Peter Borup: There's no doubt it is adding uncertainty to the path forward — not just the exact fuel that shipping will focus on in the future, but also the whole decision-making process. That being said, the three major alternatives for shipping fuel in the future have been methanol, ammonia, and people have also talked about nuclear — all three fuels that are not readily distributable now. They all come with a certain question mark. So it's not an imminent fix.
I think overall, it's a little bit hard to tell whether this is good or bad for a company like Quadrise. But the uncertainty suggests that shipowners need to find a way of taking agency themselves. There are a number of technologies out there that they can look to — everything from rotor sails to blowing bubbles along the hull, to changing the paint used on the hull — that can easily offer 7% or 8% fuel savings. Or they can use our products — the Quadrise family of MSAR and bioMSAR — which also offer significant reductions in emissions and cost savings.
For me, the thing is that we may not have the perfect fuel yet, but if you're combining some of these technologies, the effect is cumulative. You can actually go pretty far and save money at the same time. So there's more confusion now, yes, but I do think that shipowners can still do a lot themselves while regulators figure things out.
Proactive: I wanted to ask about your fuels, Peter, because with no global carbon pricing mechanism in place until at least 2027, how does that uncertainty affect the commercial rollout of cleaner fuels like MSAR and BioMSAR?
Peter Borup: It's hard to say. I think it's more of a sentiment shift, if anything, that could affect it. Fuels like MSAR and BioMSAR offer cost savings compared to regular fuels and reduce emissions. So from that perspective, they are on fairly safe ground. I don't think it should be affected much.
There are already operational regulations in place — the EU is probably the most well known. Traditionally, many of the fuels have been appealing mostly to liner companies, or ships on a regular service, where you can build up distribution. But some of the content in the EU rules — the EU Emissions Trading Scheme — actually offers a tertiary market to asset players, traders, and operators.
They would take positions in physical markets and freight derivatives, and now they can also participate in the ETS. There are already players selling credits on the biofuels they’re using, having saved CO2 emissions compared to regular operations — selling them at more than €300 per tonne to big players like Microsoft.
So that market is there, and that still means many of these technologies remain very attractive to a wider audience.
Proactive: Do you think the delay could actually play in your favour? Some in the industry worry it could slow investment in new fuels. Does that create more short-term opportunities for transitional solutions like yours?
Peter Borup: I'm not sure. It really depends on how the shipping world reacts. I don't see it as a risk. I don't think this is clearly bad for us. It could be in our favour. But it also depends on how quickly we can have the fuels adopted. That is probably more important. I'm aware there's a window here — I think it's fairly broad — but the earlier we have adoption, the more good we can do.
Proactive: Your sense from attending that IMO meeting — how important is regulatory clarity for your customers and partners when deciding whether to switch from conventional heavy fuel oil to your lower emission alternatives?
Peter Borup: I didn't actually participate in it, but I followed it closely. What's really important for our clients — shipowners — is that there is a level playing field. That's also why the EU introduced their rules. Initially, it wasn't necessarily because they wanted to regulate, but because there was an absence of global regulation through the IMO.
That's one of the biggest fears of shipowners — having to comply with different regulatory frameworks depending on where they are in the world, and knowing there may be competitors who don’t have to comply with stricter rules. That could be in the EU or somewhere else. So the need for a level playing field remains — and probably only the IMO can provide that.
Proactive: Peter, I hope you'll continue to keep us posted on developments. Thank you very much for speaking with us today.