Decarbonising shipping – a possibility or a pipe dream?

Malcolm Latarche
Malcolm Latarche

07 May 2018

Shipping has finally made the headlines in the mainstream media and for once the decision to follow an ambitious decarbonisation strategy sees the industry and the IMO being congratulated and not castigated.

It may not have been the outcome that everyone wanted but then a compromise never is. The greenhouse gases (GHG) roadmap agreed on at MEPC 72 in April was never going to please all sides, especially as some states – notably the US, Saudi Arabia, Brazil and Argentina – wanted no commitment at all whereas some wanted an agreed reduction in carbon emissions of between 70% and 100%.

What had seemed almost hopeless just days before when the Intersessional Working Group on Greenhouse Gas Reduction had been unable to come to any sort of agreement, was thrashed out in an MEPC which had relatively few other issues on the agenda compared to previous meetings.

The result is not yet a commitment to any defined reductions beyond the Phase 3 of EEDI which occurs in 2025 although a new Phase 4 of EEDI is in the offing for 2030 which could mean a 40% reduction of CO2 for newbuildings over the 2012 baseline figures for EEDI. According to the decision taken at MEPC72 there is then a future target of 50%-70% for CO2 reduction by 2050 and movement thereafter towards an eventual phase out of all greenhouse gases from shipping.

Exactly how the reductions are to be realised has so far been left open and not even the IMO is exactly sure how it might be achieved. In a statement issued immediately after MEPC 72 concluded, the IMO set out is vision and the levels of ambition of the initial strategy.

In the statement, the IMO noted that ‘technological innovation and the global introduction of alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition. It also said, reviews should take into account updated emission estimates, emissions reduction options for international shipping, and the reports of the Intergovernmental Panel on Climate Change (IPCC).

The initial ambitions were described as carbon intensity of ships to decline through further phases of the EEDI for new ships. The statement then switches from talking of carbon intensity and refers to peaking GHG emissions from international shipping as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008 whilst pursuing efforts towards phasing them out as called for in the Vision as a point on a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals.

It is clear that a great deal of faith is being put in alternative fuels but by themselves the potential to reduce GHG emissions is limited. Of all the fuels so far promoted as alternatives to oil fuels, only LNG is making an impression and even that is on a small scale at the moment.

Some pioneering shipowners have opted for LNG-fuelled vessels including container ships, bulkers, tankers and more despite the general consensus being that it is not an ideal fuel for deep-sea ships. Their decisions will however help them meet the 2020 SOx reduction and even Phase 3 of the current EEDI rules but likely not any further phases that may be added to EEDI.

This is because the CO2 emissions from LNG are between 25% and 30% lower than from oil fuels depending upon the methane number of the LNG fuel. None of the other alternative hydrocarbon fuels can match this reduction in CO2 although LPG and methanol come close. The reduction in CO2 from using LNG may not be as great as the chemistry of combustion suggests because unburnt methane that escapes through methane slip is also a potent GHG.

One study done on a ferry in 2012 actually concluded that the dual-fuelled ship actually emitted more GHG when running on LNG than on MDO. On the other hand, a more recent study by the Norwegian research organisation Sintef suggests that the problem is being contained. The IMO has already recognised the problem of methane slip as impacting negatively on shipping’s GHG emissions.

As well as alternative fuels, the IMO’s new strategy mentions the need for technological innovation. There have been many such innovations in recent years ranging from energy saving devices to new ship designs and hull forms. Engine makers have also managed to squeeze more efficiencies out of their products, but each new small increment becomes harder to achieve. Ironically, some of the efficiency advantages that have been won are being negated by demand for more power on board to meet other environmental initiatives such as ballast water treatment.

Where new technological innovations are to come from remains open to question. There have been suggestions that the IMO should take a leading role in promoting research aimed at improving vessel efficiency. One of the papers presented at MEPC 72 came from the European Shipyards Association (CESA) and proposed a possible course of action.

In the document CESA proposed that the IMO should initiate and fund research, development and innovation activities. In support of that proposal, CESA said “Although shipyards and maritime equipment manufacturers continuously improve their products, these advances are driven by the commercial demands of their customers. The technological progress that the GHG Strategy will require may take considerable time to develop, and it may not be commercially attractive to develop or to utilise them. It is therefore desirable that some advances are hastened in advance of a commercial demand”.

CESA’s proposal stresses the importance of creating a system that ‘would allow participation of both public research institutions delivering publicly available results, as well as commercial entities with proprietary knowledge to contribute while retaining their intellectual property rights’.

The proposal is not limited to improving new ships and also suggests an Existing Fleet

Improvement Programme is needed in order to require technical and operational improvements of all existing ships some of which should be mandatory. Mindful perhaps of the financial strain that might place on shipowners, CESA says the burden for the industry has to be minimised by investment aid, which should increase if measures are implemented before the application date. Since not all technical newbuilding options can be retrofitted the programme should be complemented by legally binding operational efficiency standards.

The proposal might seem to be reasonable, but the IMO is not structured to take on the role proposed for it and any funding would need to come the member states many of which may not be so keen for their contributions to be spent in such a manner. The EU and its member states do already finance a fairly diverse research programme but there are budgetary constraints building within the organisation and calls for a smaller role for the EU are being made by many of the newly elected governments in some of its members.

Reducing shipping’s GHG emissions to the more ambitious levels without adversely affecting the commercial performance of ships would be impossible given the current level of technology. Proposals such as speed limits would aid in reducing the fuel consumption of individual ships but since more vessels would be required to cover the same volumes of cargoes in a given time period there is likely to be an increase in GHG emissions when the construction of the extra ships and their equipment is taken into account.

One option that was previously discussed quite recently is for shipping to consider the possibility of nuclear power. Selling this alternative to the world at large is an almost impossible task and although it would allow for decarbonisation to occur quite rapidly it is almost certainly not really an option.

What is noticeable in many of the various studies that have been commissioned on reducing GHG from shipping is that they appear to take little account of the structure of the shipping industry. Calls for co-operation and transparency and working for a common goal ignore the fact that shipping is by and large financed by private capital and is highly competitive. Forcing shipowners into bankruptcy by obliging them to fit new equipment, convert propulsion systems or even to scrap ships and replace them with newbuildings will not solve matter of shipping’s GHG emissions.

If existing ships were to be made obsolete the effect on world trade – even allowing for the overcapacity that exists – could be catastrophic with insufficient tonnage available to carry essential goods and commodities. It is highly doubtful that many governments would sacrifice their nations’ prosperity and the outcome could be the very opposite of what is being aimed for.