PART 2 of 2
Decarbonization Solutions:
Overall solutions can be grouped into Operational, Technical or Market Measures.
We have also separately listed the considerations for alternative fuels which is a significant area of consideration in its own right.
Key Solutions are outlined briefly in the graphic below with the emission reduction potential outlined.
Note: These can be considered as use of proceeds categories, however, AER etc are more commonly used KPI/Targets in Linked structures.
Source: Infographic produced by UMAS: www.u-mas.co.uk
A. Operational
- Route Optimization/Weathering: Taking the most efficient route to minimize fuel consumption.
- Cargo Space Utilization: Ensuring no dead space and efficiency/cargo load is maximized.
- Cold Ironing: Port infrastructure for ships to use in port which is electric (powered by renewables) rather than auxiliary engines powered by non-renewable fuels.
- Speed Reduction (Slow Steaming): In basic terms going slower, re rating engines to go slower and use less fuels (this can actually have one of the largest reductions in emissions)
B. Technological
- Wind and Solar: Assistance for propulsion of a ship.
- Bulbous Bow: To maximize aerodynamics.
- Advanced Hull Coating: coating and running air down the sides of a ship to maximize aerodynamics which results in less fuel useage.
- Ballast Water Design: Waste water on the ship to be minimized.
- Hull Form Optimization: Really around design and aerodynamics.
- Electric Hybridization: For engines – dual fuel ships
- Main engine improvements: Re-rating and improving
- Auxiliary engine improvements: To electrify what is possible for non fuel use
- Waste Heat Recovery: Reusing waste heat for additional energy
- Propulsion: Looking at Propulsion aspects and also polishing rudders etc
- Construction Materials: Lightweighting/performance and possibly for embedded carbon
C. Market Measures
- Carbon Taxes
- R&D taxes
- EU ETS (Emission Trading Scheme)
- Offsets and Natured based Solutions (reforestation etc)
Alternative Fuels:
In addition to the measures above, fuel is probably one of the most challenging and key areas for decarbonization.
As there is no clear winner yet, flexibility is key and we will probably see continued hybridization of engines hence fuel useage for some time.
Shipping has been spoilt for many years using a very dirty fuel called HFO (Heavy Fuel Oil) so its about time for a change. However, given the costs of fuels compared to the capital costs for a ship over its lifetime, fuel selection and flexibility is a huge consideration and a very complex area.
The selection of an alternative fuels is not straight forward and has many aspects as we can see below.
We have tried to group these into specific considerations as they are the main reasons why so much debate rages in this area currently.
High Priority Parameters include –
- Cost
- Energy density (hence storage needed)
- Fuel maturity
- Bunkering and supply availability
- Actual emission savings
Other Considerations include –
- Need to change infrastructure
- Need to change engines
- Drop in fuel or not
- Availability
- Toxicity
- Safety
- Regulations
- Landed based infra to support the usage of these
Hopefully the renewable fuels turn green in the future because they are not commercially viable at large scale yet unfortunately.
In terms of natural gas it can work for a short period, however there are no substantial development in carbon capture technology. Furthermore, there is no way that gas can meet even the IMO decarbonization trajectories from around 2030 – hence it is a bridge fuel to nowhere!
Ammonia seems to be firming as one of the favorites but it’s anyone’s guess, flexibility is the name of the game for now.
The table below provides a good traffic light system…
Less Well Known Solutions:
There’s also a number of potential solutions that are less widely discussed for shipping. In our view the major initiatives that should be pushed more aggressively include –
- Autonomous Ships: Slow steaming is one of the best methods to reduce emissions and with no crew, these can move slower.
- Nuclear: Nuclear energy is coming back on the sustainability agenda and also needs to be considered for shipping. Given the high energy density and ever-increasing technology innovation for SMR (Small Modular Reactors) this is becoming more potential – although probably not in the short-term.
- Green Corridors: As mentioned above, the major part of the cost to decarbonize the shipping industry will be land based infrastructure. With a number of key shipping routes forming a major part of the global volume, these should be prioritized immediately for green infrastructure such as that required for alternative fuels, and also cold ironing (electricity provided to a boat while in port).
- Regionalization: This is possibly much more challenging in nature and would require a longer time to organize, however could more shipping becoming regional? Hence more solutions for short to mid-range shipping can then become more workable (this requires a major rethink in business models though).
- Carbon Taxes: Aggressive use and implementing of carbon taxes to quickly drive behavioral change. The money raised through these taxes is then put into R&D for new technology.
Conclusions and The Future:
Shipping is a global industry with significant strategic importance, and we need a comprehensive global solution for decarbonization.
A broader set of global solutions that are supported by a much more robust regulatory agenda and rules are crucial.
The recent implementation and change in the industry for the 2020 Sox and Nox Legislation and Regulatory Requirements is a great example of how the industry can work together.
Solutions also need to transcend industry boundaries and include infrastructure companies, construction, ports, fuel and many more.
There’s not one silver bullet that will work, so we need a portfolio of solutions and much more R&D.
Costs can be spread and passed onto consumers given the significant cost advantage shipping has for costs per tonne/km.
Low carbon alliances from End Buyers who use shipping heavily such as Amazon are growing, and rapid decarbonization is the only way to ensure long term competitive advantage and viability for this crucial industry.
Some real out of the box (or container in this case!) thinking will be needed if we wish to make inroads in the transition ambition for global shipping.
