For the moment, the biggest challenge for the shipping industry is meeting the 2020 global sulphur cap.
On the face of it that should be quite simple; The IMO was assured when it took the decision three years ago to opt for the 2020 date as opposed to the later 2025 alternative that there would be no problem in obtaining sufficient compliant fuel.
Some have yet to be convinced that will be the case. For the small number of ships able to use LNG, it does appear that the infrastructure in most of the appropriate localities will be in place. For the larger number of ships now equipped with scrubbers, the ability to continue with traditional HFO is mostly assured although there is a small but growing list of places where that may not be possible.
For all other ships, the gamble on the compatibility and miscibility of the new types of fuels and locally blended alternatives will have to be taken. If there are problems, then it can be expected that they will manifest themselves within a very short period. Indeed some may even be seen over the coming weeks as ships prepare for the New Year by cleaning out tanks and taking on the first supplies of new fuels.
In November, the Intersessional Work Group on GHG emissions met to discuss developments in the IMO’s plan to cut carbon emissions from shipping with an aim for eventual zero-emission shipping. The group will meet once more before MEPC 75 begins on 30 March next year and will deliver the results of their deliberations at MEPC assuming that issues with the sulphur cap do not become an overriding issue.
Once SOx and ballast treatment are relegated to little more than a watching brief on MEPC’s agenda, the industry can expect that decarbonisation will take on the dominant debating subject. Today residual fuels make up 75% of the total fuel use by shipping. A further 23% is distillate fuel and the balance is predominantly LNG but also some LPG, methanol and ethane.
So far, those within shipping believe that they have actually made a fairly good start to tackling the subject of decarbonisation even if that is not a view shared by outsiders and even some shipping practitioners. Batteries may work for some short route ferries and even as a complement to more traditional sources of power on other ship types but not even their most enthusiastic proponent would argue that they are ready to power the deep sea fleets of bulkers, tankers and containerships.
LNG as a fuel can provide a small reduction and this could eventually be for all ships if newbuildings are specified to make use of it. Obviously it would take ten to fifteen years before such a strategy really made any difference as existing ships would most likely continue as now running on oil fuels. There are other alternatives as well – LPG and methanol for example – but again it will take a long time for inroads to be made.
The big problem is that aside from batteries, all of the fuels mentioned contain carbon and so, while they may help in reducing shipping’s carbon footprint, they cannot eliminate it all together. Leaving aside the reduction in emissions due to efficiency measures, the best that could be hoped for by a wholesale switch to LNG would be around a 15-20% reduction in emissions. Measures such as slow steaming can reduce fuel use but with estimates of future global trade always suggesting an upward trend, slow steaming might reduce individual ship contributions but not the overall figures.
Looking at the world fleet of ships above 150gt, the vast majority of these – around 70 – 80% – are actually quite insignificant in the amount of fuel they use as a percentage of shipping as a whole and account for just 20%. Converting all those small ships to alternative fuels would not particularly impact shipping’s decarbonisation. Ironically, these small ships burn the majority of distillate fuels and are already cleaner than the deep sea ships.
Around 80% of all fuel use and the vast majority of residual fuels is consumed by under 18,000 vessels. The large container ships are included in here as are the bulkers and tankers. Bulkers and tankers already operate at quite low speeds and so even a small reduction in speed could lead to demand for many more ships to make up the capacity loss.
There is much talk about hydrogen’s potential role as a future fuel. It is a clean fuel if you ignore the fact that water vapour is recognised by the UNFCCC as the most potent GHG even above CO2. But the problem is that it is such a light fuel that space requirements for a deep sea vessel would be around three times that of LNG as a marine fuel. Compared to HFO, liquid hydrogen would require maybe five times the volume for the same energy potential. In turn that would mean even more ships required leading to congestion at ports and a huge demand for seafarers.
One way of solving that problem would be for every ship to have to bunker far more frequently. Instead of a bulker taking fuel sufficient for a round trip from Brazil to China for example, it would have to bunker maybe three to five times on the round trip. Again that would slow down shipping and add to the voyage costs increasing the market rate for all commodities.
Ammonia is another potential fuel that has entered the debate in recent times. In theory it could aid in a zero emission future although its use in an internal combustion engine would result in NOx still being emitted in the exhaust.
A factor that is often overlooked in debating the decarbonisation potential of any fuels is the amount of energy consumed in production and its source. Producing hydrogen can require a lot of energy – in fact after biofuels it is probably the most power hungry fuel to produce, transport and store. Unless that energy is itself carbon free, the overall impact on atmospheric CO2 may actually be higher from hydrogen than from a fossil fuel such as LNG.
With particular regard to biofuels, the argument that they are carbon neutral assumes that all CO2 emitted during combustion is recovered by replacement of the crop or source of the biofuel. That may be the intention but crop failure or reduced production caused by weather or act of nature may negate any emission reduction. In addition, preparation of land, harvesting storage and production are also high energy users.
One of the arguments frequently used to criticise the 2020 sulphur cap was that unless a way could be found to remove all the sulphur from residual fuels either during refining or as a post refining process, there will be an inevitable shortage of compliant fuels. Since residual fuels account for almost 80% of all marine fuel, replacing it with ULS distillate fuels will have an inevitable effect on all other users of distillate fuels.
There has been speculation from outside of shipping that 2020 will have a severe economic impact on many industries because of the increased demand for distillate and how accurate the predictions are is yet to be seen. The situation with hydrogen and other oft touted alternative fuels could be even worse.
In a recent presentation by Anders Valland, Research Manager Maritime Energy Systems, SINTEF Ocean, the point was made that the current world production of hydrogen would not even meet half of the energy requirement of shipping in 2019. The situation with other alternatives was even worse with world production of methanol and ammonia both only reaching a limit of 20% of the marine fuel energy requirement.
As with distillate fuels, there is expected to be an ever increasing demand for these fuels from industries outside of shipping. Even if there were no increase in demand other than from shipping, world hydrogen production would have to be tripled if all ships were to run on hydrogen. That is without any increase in demand for shipping as world trade grows as it is expected to do.
It is debatable if there is the will in private organisations or governments to ramp up production of alternative fuels to the levels needed to decarbonise shipping and all of the other industries that would need to do so to meet the goals of the Paris Agreement. And if that will is not there, will the technology producers continue to pump money into R&D projects that may turn out to be white elephants?
Ship operators know what is required of them in terms of service levels and they will try to provide that service with whatever technology is available but perhaps there needs to be a measure of realism injected into the ambitions of regulators and environmental lobbyists.
Shipowners will do what they can but they cannot achieve the impossible.