ARTICLE
13 March 2024

Australia and Singapore enter into MOU for a green and digital shipping corridor

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Holding Redlich

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Both countries will explore opportunities to develop zero greenhouse gas emission fuel supply chains for the maritime industry.
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On 5 March 2024, Australia and Singapore showed their commitment to a more efficient and sustainable shipping future by entering into a memorandum of understanding (MOU) to formally collaborate on establishing the Singapore-Australia Green and Digital Shipping Corridor (GDSC).

Under the MOU, both countries will work with industry stakeholders to explore opportunities to develop zero or near-zero greenhouse gas (GHG) emission fuel supply chains for the maritime industry. This includes building necessary infrastructure, formalising standards and developing and implementing training requirements for the production, storage and supply of green marine fuels.

The establishment of a digital shipping corridor will also enable both countries to explore the exchange of digital information which will result in efficient port clearance, port calls and an uptick in the flow of vessels between Singapore and Australia. This will include collaboration with the Maritime and Port Authority of Singapore (MPA), Australian federal, state and territory governments and industry stakeholders.

Australia has already shown its commitment to reducing emissions and has great potential to be one of the leading producers of green marine fuels. Meanwhile, Singapore has already established itself as one of the world's largest bunkering and busiest trans-shipment hubs. The MOU holds promise for both countries to further expand and develop their advancements towards a sustainable and digital shipping future.

Australia and the GHG space

Australia introduced its long-term emissions reduction plan in 2021 with a goal to reach zero emissions by 2050. Signing the MOU with Singapore signifies a step towards attaining that goal. It is estimated that the maritime sector is responsible for about three per cent of global GHG.

As part of Australia's emissions reduction plan, several projects have been implemented in both the ports and private sector. For example, Australia is currently working towards introducing port hydrogen hubs across various strategic locations such as Newcastle, Port Kembla, Gladstone, Port Hedland and Geelong, to promote the production, storage and export of hydrogen as a sustainable energy source.

Australia has also implemented projects with various global private sector entities, such as Fortescue Metals Group and BP, to produce green ammonia and hydrogen as marine fuels. Among these projects is the construction of a 250 MW green hydrogen and ammonia plant in Bell Bay, with the capacity to produce 250,000 tonnes of green ammonia per year for domestic use and export. There is also a proposed 26 GW wind and solar renewable energy facility under development in the Pilbara region, east of Port Headland, with the capacity to produce 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia per year.

From a strategic standpoint, Australia and Singapore's respective positions in the maritime supply chain show promise that both countries will collaborate to ensure that existing projects and those in the pipeline relating to green marine fuels will be successful.

Other trade benefits

Aside from the potential benefits in green marine fuels, the partnership with Singapore also aims to foster advancements in digital shipping, which could lead to more efficient and beneficial trade between the two countries. According to the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA), a statistical report on Australia's sea freight from 2020 to 2021 showed that exports and imports between Australia and Singapore were among the top ten highest in value of sea freight between Australia and other countries. The report further indicated that between 2020 and 2021, Australia's exports to Singapore grossed $10.5 billion while imports from Singapore to Australia grossed $8 billion. So, it is clear that this MOU will be mutually beneficial to both parties and their continued trade.

According to DITRDCA, the areas expected to be actioned under the GDSC are as follows:

  • exploring opportunities for a joint supply chain and logistics of zero or near-zero GHG emission fuels
  • developing training programs to safely handle zero or near-zero GHG emission fuels
  • supporting bunkering requirements and standards for vessels servicing the maritime route between Australia and Singapore
  • conducting test pilots and demonstration projects for bunkering zero or near-zero GHG emission fuels
  • leveraging digital technologies together to enable and enhance port call optimisation, and identifying opportunities for shared platforms, technologies or processes to streamline port calls
  • exchanging information to enable just-in-time arrivals, departures, and marine services.

The signing of the MOU between Australia and Singapore will greatly benefit Australia's renewable energy sector and Singapore's bunkering capabilities through shared expertise and resources while simultaneously upskilling both workforces to support the transition to clean energy.

With the implementation of the digital shipping corridor, trade between both countries will increase, providing further opportunities for Australian and Singapore importers and exporters, as well as other businesses in the maritime supply chain. The digitalisation of shipping will also create opportunities for businesses in the technology and communications sector to forge partnerships and integrate into projects. Overall, the GDSC will help bring together stakeholders across the maritime and energy supply chain and governments to collaborate and accelerate sustainable and digitalised shipping.

At present, the MPA and DITRDCA continue to discuss work on the action areas with interested Australian state and territory governments, port authorities and operators, and maritime and energy value chain stakeholders.

If you have any questions regarding the MOU or the GDSC, please get in touch with a member of our Transport, Shipping & Logistics team below.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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