By Dr. Mary R. Brooks, Professor Emerita, Dalhousie University
The October issue of BC Shipping News featured an excellent article by Michele Acciaro, Trevor Heaver and Jane Lister on the changing face of shipping. It explained the dramatic challenges climate change is posing for the industry and provided a solid history of recent efforts to manage greenhouse gas (GHG) emissions. The article closed by noting the new Social Science and Humanities Research Council of Canada-funded research program for green shipping, led by the University of British Columbia (UBC). Since the article was written, the Intergovernmental Panel on Climate Change has released its latest report and there have been a number of other news items on this issue. In this article, I explore the challenge of alternative energy sources for ship propulsion as the industry focus turns towards alternative energy as a means of vessel emissions reduction. The content is based on discussions at the Marine Board meeting in Washington on November 8, 2018. The presentations from this meeting are available online at: http://www.trb.org/MarineBoard/PastMBEvents.aspx.
In 2016, the International Maritime Organization (IMO) approved guidelines for the reduction of GHG emissions for 2023, including a cap on the sulphur emissions from ships at 0.5 per cent by 2020. This requires that vessels either use compliant heavy fuel oil with the sulphur content not greater than 0.5 per cent or install scrubbers if the fuel used for propulsion is not compliant. In the longer term, emissions from ships will need to be drastically cut — as noted by the UBC team — by 50 per cent of 2008 levels by 2050 and reach zero emissions by 2100.
The focus session at the Marine Board was entitled ‘Paths to Zero Emissions Shipping’ but, as John Butler of the World Shipping Council (WSC) noted in his presentation, to reach this target no fossil fuel can be used for ship propulsion. Stepping back to think about what the alternative energy sources might be, and what might be expected while the research takes place, became the focus of discussion. What efforts will be necessary to meet the 2100 target? The conclusion reached by the panelists was that work needs to begin now to hit the 2050 target because it will not be easy to reduce emissions or find alternative energy sources as effective as heavy fuel oil.
Short-term alternatives to non-compliant heavy fuel oil
The International Transport Forum recently published a report on alternative energy sources for maritime transport and did not see many suitable alternatives to heavy fuel oil for ship propulsion (see Table 1, ranges indicating possible fuel savings) that are immediately applicable.
According to Michael Samulski of the U.S. Environmental Protection Agency, reduced emissions limits have demonstrated benefits in terms of citizen health. Liquid natural gas (LNG) as a marine propulsion fuel, he concluded, is a near-zero sulphur option and North American and Baltic shipping regions are already well on the way to meeting sulphur targets. The North American Emissions Control Area was put in place beginning in 2012 and has been a testbed for other parts of the world. However, sulphur dioxide is only one air pollutant in a group of pollutants that are emitted from ships. Furthermore, he noted that the U.S. is in the greatest position to take advantage of the opportunity available from the IMO 2020 sulphur emissions cap as it already has refining capacities that can produce near zero-sulphur fuel.
The second speaker, Bill Hutchins, Project Manager LNG Marine Fuels –Americas for Shell, focused on the role of LNG as a stepping stone in getting to the zero emissions target. While he believes that hydrogen will be the successful fuel alternative to heavy fuel oil in the long term, the next 20-30 years will need a transition fuel and that will be LNG. Shell has invested in seven LNG bunkering vessels already and is looking to grow this opportunity in the short and medium term. On a very positive note, he spoke of the refining industry’s efforts to standardize LNG bunkering connections globally as part of the smoothing of the adoption process.
The third speaker, Ned Moran of Moran Towing Corporation, injected into the discussion the very practical challenges faced by ship owners as they move towards LNG adoption. He noted that a number of operators in U.S. ports already use LNG, and its use is even greater in North Europe. However, he identified six reasons why LNG is a difficult choice for marine operators considering LNG as a marine fuel. First and foremost, his primary concern is that his LNG tugs become unusable if they need to be re-positioned to ports without LNG bunkering capacity, underscoring the ‘chicken and egg’ problem of which comes first, the demand for LNG or the availability (supply). Second, LNG requires four to six times the storage space of conventional fuels, and that storage cannot be located under crew quarters. This impacts vessel design alternatives and, for cargo ships, will alter vessel economics as it reduces cargo carrying capacity. Third, he cautioned that LNG is a low response fuel — you don’t get to ‘full steam ahead’ quickly when you need additional propulsion. Fourth, his company’s experience is that LNG tugs cost 30 per cent more but can work fewer continuous hours than other vessel types. Fifth, for U.S. owner operators, there are crew and build issues in the U.S. under the Jones Act. Finally, the location of the LNG vent mast is critical; it cannot be retracted and, therefore, his LNG tugs face a limited scope of use as they cannot work underneath the extreme fore and aft locations on cruise ships or aircraft carriers.
The final speaker, John Butler of the WSC, was clear that if the industry really wants ‘zero emissions’ shipping, it must find alternatives to fossil fuels. He argued that the limits of conventional technologies have almost been reached. LNG is not really suitable for long distance, transoceanic routes, and, as a fossil fuel, still places the zero emissions target out of reach. He argued that the industry really needs to think about which segments of the market are most likely to adopt what kinds of fuel for propulsion, executing a multi-platform strategy as the best way forward. Because the zero-emissions target will not be reached without a global R&D effort on new propulsion fuels, he concluded that a single country will not make sufficient progress to get the industry to the target and that a multilateral research effort will be needed. He proposed that the IMO would be the best governance body for effective action. Finally, he pointed out that the target will not be reached if there is any delay in the implementation of the current 2020 sulphur cap and called on governments to ensure consistent enforcement of what has already been agreed at the IMO. This requires political will.
Planning the transition period
The question and answer period was most interesting. There was discussion of a number of concepts to help with this transition to new fuel systems, including:
- A global effort to report on non-availability of compliant fuel by port;
- Reporting and enforcement via port state control on individual companies found using non-compliant fuel;
- A CO2 incentive program be developed with funding aimed at R&D; and
- The use of drones to test emissions from vessels in ports.
Furthermore, there was also discussion about how to handle those vessels not using closed loop scrubbers, because open loop ones just change the problem to one of ocean acidification resulting from sulphur-infused water dumped into the ocean. This means ports will need to offer facilities at berth to remove the sulphur wastewater as they currently do for ballast wastewater. Perhaps, it was suggested, that the list above should also include a reporting system for ports not having sulphur waste handling facilities.
Finally, when the panelists were pushed to identify the biggest challenge to achieving the target of zero emissions, the consensus was education, particularly on the use of LNG as a marine fuel in the transition period. It is not just a question of educating those in the shipping industry who have to make vessel investment decisions, but one of educating regulators on new responsibilities and reporting systems, and citizens in port communities who somehow think just leaving fossil fuels in the ground now is an appropriate response.
What will be the most likely ship fuel in the longer term?
In the final analysis, there seemed to be agreement that LNG is a marine fuel for the next 20 to 30 years while R&D happens on alternative energy sources for propulsion in the longer term. Here, there was no consensus as some panelists believed that hydrogen was the most likely energy source, while others had greater faith in the development of fuel cells and new battery technologies. What was clear to those attending is that neither hydrogen nor fuel cells or batteries will be medium-term solutions, and that more market-ready solutions like LNG are the intermediate step.
In a recent presentation at the Federation of European Private Port Companies and Terminals Annual Stakeholders Conference in Brussels, Martin Stopford, CEO of Clarkson Research, argued cogently in favour of hydrogen as the best marine fuel in the long term. He noted that the efforts towards more efficient diesel engines and hull designs have already been exploited and more is not likely to be achieved here. One alternative he proposed to reduce emissions in the shorter term is further reductions in vessel speed of one to two additional knots from the current 12 knots. (Long gone are the days of 20-knot steaming, and there is, according to UNCTAD’s Review of Maritime Transport, a permanent reduction in vessel steaming speeds already.) This approach was contentious with an audience cognizant of the inventory carrying costs cargo owners face with slower steaming. There was considerable rumination about whether the world should prepare to re-shore production closer to consumption or impose carbon pricing so that transport prices reflect the true cost of air emissions or both.
Meanwhile, Maersk announced that it will use compliant fuel by 2020 and work hard to identify alternative fuels for the industry. On December 4, the company raised the bar by promising to meet a zero carbon emissions target by 2050. Maersk appears to be seizing the mantle of leadership amongst ship owners, but surely this has got to be the plan for all.
The Marine Board discussion explored the ‘moon shot’ for this wicked challenge: researchers in all fields need to think about what can be done on a multi-lateral, networked level, who will undertake the work, and how the public and private sectors can work together. This is not a one-country challenge — there is a national interest faced by all countries and those in the private sector in each country need to be involved so that there is a positive outcome for all. It is time for Canada’s research community, and all in the ocean shipping industry, to support the needed research and development in this field.
Dr. Mary R. Brooks is Professor Emerita at Dalhousie University’s Rowe School of Business. In 2016-2018, she served as Chair of the Marine Board of the U.S. National Academies. She recently chaired the Council of Canadian Academies’ assessment of The Value of Commercial Marine Shipping to Canada. She is a co-winner of the 2018 Onassis Prize in Shipping.