ENERGY WATCH #1 - December 7, 2018
Shipping’s decarbonisation forecast: cloudy, but bright spells expected for the future
by Matthew James
The International Maritime Organisation has joined the race to net zero emissions. The decarbonisation of shipping, especially for long-haul marine transportation, remains one of the biggest challenges facing the energy and business community. Innovation in infrastructure, technology and new fuel solutions all need to play their part in setting the maritime transport sector on the right course.
The maritime sector was always a “green pioneer”. That was down to submarine technology. Early submarine engines were part battery powered (nuclear came much later). Even before World War 1 all the major powers had submarines. So they can claim to be the first to prioritise battery power and come to grips with the struggles of minimising weight and size. So what went wrong?
Today, shipping is one of the largest greenhouse gas (GHG) emitting sectors of the global economy, responsible for around 1 Gt of CO2eq every year. EU shipping is responsible for 1/5 of those emissions. If shipping were a country, it would be the 6th biggest GHG emitter. And there are other problems completing a pretty black environmental picture.
The umbrella NGO, Transport & Environment (T&E) has recently produced a pretty pessimistic report which gives the impression that (apart from smaller inland and coastal marine transport) shipping will keep churning out more and more CO2 long into the second half of the century. T&E’s Faig Abbasov describes shipping as the neglected child of the transport sector, alluding to the fact that until now, shipping has not been subject to the same scrutiny and intense regulatory pressure as other sectors. But significantly, the report assumes that larger vessels will struggle to go low-carbon. The ocean going tanker and cargo fleets are the worst emitters. That means design efficiencies and speed-capping must play a part in reducing emissions on big boats.
If shipping carries on ‘as is’ the International Council on Clean Transportation warns sea transport could be responsible for 17% of all CO2 emissions by 2050. The International Maritime Organisation (IMO), the UN agency responsible for regulating shipping, quotes figures that show some progress: 796 million tonnes of CO2 emissions in 2012 (an improvement on 2007). Not bad considering that shipping falls into the “difficult to decarbonise” category. But that drop was helped by a decade of stagnant growth in key economies. IMO regulations mean the shipping industry has to adopt alternative fuel sources to achieve more and faster progress.
[Graph taken from DNV GL Energy Transition Outlook 2018: Maritime Forecast to 2050]
In April this year the IMO adopted an initial greenhouse gas (GHG) strategy for international shipping. Called the “Initial IMO Strategy on Reduction of GHG emissions from ships”, it says: “The Initial Strategy envisages for the first time a reduction in total GHG emissions from international shipping which… should peak as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008, while, at the same time, pursuing efforts towards phasing them out entirely.”
The IMO also includes rules on ship design “to strengthen the energy efficiency design requirements for ships [to achieve] reduction of CO2 emissions per transport work by at least 40% by 2030, and 70% by 2050”. That sets a clear target for the shipping engineers to sit down with those at the forefront of the renewable energy industry, find some answers and launch those new ships.
Which alternative fuels are best?
T&E concludes that “a mix of alternative zero emission technologies including battery-electric, liquid hydrogen and ammonia would cause the least additional strain on the broader energy system. Synthetic fuels such as electro-methane and electro-diesel, on the other hand, would be the least optimal and also extremely difficult to monitor and enforce.”
They split the problem into two categories: short and long sea journeys. Their view is that the most efficient and immediate solution for short sea voyages is battery powered ships. For longer journeys, it’s liquid hydrogen and liquid ammonia produced with zero-emission electricity.
The big problem with the “theoretical climate neutrality” of synthetic methane is, as with LNG, the methane leakage and slip that can take place during the transportation, bunkering and onboard combustion of the fuel.
T&E’s Faig Abbasov warns: “We need to avoid wasting lots of time and money on solutions that can’t deliver shipping decarbonisation. The biggest pitfalls are biofuels, which can’t be scaled or enforced sustainably, especially in shipping. LNG and synthetic methane are other dead ends due to methane leakage and enforcement problems.”
On a positive note, a surprisingly high percentage of European shipping emissions come from vessel types which are already suitable for fully electrified alternatives. As much as “15% of the EU’s maritime emissions could be in this category of short sea shipping, ro/ro passenger vessels and et cetera,” says T&E’s Lucy Gilliam.
It’s clear that the early adopters must be the small ships. Approximately 14,000 ships, 22% of the global commercial fleet, are below 400 gross tonnes, most of which are small coastal ships, e.g. tugs and passenger ships/ferries. Half of these are operating in Europe. Smaller ships travel shorter distances, so can be battery (or part-battery) driven and never be too far from a charging station. Given the potential quick wins from converting smaller ships, the regulators must tighten the rules here, and soon. “The technology is readily available to start this process and [journey] range can be extended as technology matures,” says the T&E report.
DNV GL is a global quality assurance and risk management company. In their report “Energy Transition Outlook 2018: Maritime Forecast to 2050” they provide a valuable reminder to the maritime industry of what rules are coming into force, and what rules might be added to make sure emissions targets are met.
Both the shipping sector and the fuel innovators had better take note. If the IMO’s targets are robustly enforced and met, DNV GL has modelled what that future energy mix for marine will look like. They find that by 2050, 39% of shipping energy will be from carbon-neutral fuels, which will have overtaken the 34% share of liquid fossil fuels, such as heavy fuel oil (HFO) and marine gas oil (MGO).
Liquefied natural gas (LNG) and liquid petroleum gas (LPG) will, together, have a 23% share. Electric batteries will be an energy source on one third of all ships from mid-century, providing about 5% of the total energy for shipping. Shortsea and non-cargo shipping will use 40% of the total energy; and, in these segments, electricity will constitute 11% of energy use.
Digging deeper, the DNV GL report includes a fascinating analysis into the design of carbon-robust bulk carriers under possible future CO2 regulations. It explores three design alternatives for a ship designed today and built in 2020: a standard ship, an LNG-powered ship, and a fuel-efficient option. “One striking finding is that investing in energy efficiency and reduced carbon footprint beyond current standards seems to increase competitiveness over the lifetime of the vessel,” the report states.
Someone is listening. Denmark’s Maersk, the world’s largest container shipper, announced this week that it aimed to have carbon neutral vessels commercially viable by 2030 by using energy sources such as biofuels and would cut its net carbon emissions to zero by 2050.
Electric ships are the “quick wins”
If shipping has a lot of catching up to do, what progress is being made with electric-driven ships, the most likely early adopters?
In Norway, research group Sintef Ocean and Zurich-based ABB are working together on hydrogen fuel-cell technology that can power full-sized vessels.
Sintef’s vessel simulator is being used to test different combinations of diesel, battery and fuel cells under varying loads. They even have their eyes on the big ships: “Ultimately, any type of commercial or passenger ship could be driven by fuel cells,” says Sintef’s Anders Valland.
How soon will it happen? Working alongside ABB, Ballard Power Systems is pushing the current kW-scale fuel-cell technology into a full MW-scale output. That’s enough to push big vessels through the water. In mid-2018 it developed a unit capable of producing a 3 MW unit – or 4,000 horsepower – the size of a standard fossil-fuelled marine engine.
Ballard Power Systems’ Nicolas Pocard says: “Marine applications are currently in development; they should become widely available within three to five years after the first systems are implemented and proven in the field.”
Governments and regulators must keep supporting the innovators.
Entrepreneurs developing new business models aimed at helping the industry by capitalising on developments in the electricity sector are keen for governments to catch up. “More can be done using subsidies, taxes, and regulations to help with the transition. Policy makers should be aware that a solution might be closer than we think. If they can play their role in speeding up the process, we can play ours better and faster,” says Frits Muller, entrepreneur and advisor at Skoon.
Opportunities and incentives
The maritime sector has a long way to go, but the purpose of the IMO’s new regulations is to propel the sector forward and catch up with the rest of the world.
The smaller the ship, the sooner it will be converted to a low- or no-carbon vessel. The inland and short range picture is set to change spectacularly, creating a significant demand (and therefore acting as a driver) for renewable energy production.
At the other end of the scale, the existing huge tankers will be the slowest to change. Given that the vast majority of emissions from the sector come from big, long-range transport vessels, where net zero fuel options are just not viable yet, this is a big problem. Hopefully, the designers and financers of the big ships being built today can see the new fuel alternatives as the future, as more evidence comes in that efficient low carbon vessels can save money in the long term.