The IMarEST’s presentation at the IMO – which set out the technical and policy conditions needed to reduce shipping’s use of fossil fuels – became a reference point for delegates at MEPC 72. The presentation was informed by the work of the IMarEST’s Emissions from Shipping Special Interest Group. The key themes are related below:
The decarbonisation of shipping is a monumental undertaking. It poses many challenges to technologists and policymakers alike. Weaning off the fossil-fuels that have powered shipping for more than a century initially sounds a fanciful notion. There are no immediately obvious substitutes to heavy fuel oil. That said, the industry has, in recent years, shown increased willingness to experiment with alternative fuels and unconventional powering arrangements in pursuit of efficiency improvements.
Bringing about a net reduction in CO2, without inhibiting the growth that is forecast as a result of the continued expansion of trade and the global economy, raises the hurdle of industry-wide decarbonisation even higher.
Current solutions, such as slow-steaming, increased vessel size, and a greater focus on efficiency in design and operation, can only achieve so much. It should be remembered that these efforts are driven mostly by vessel operators wanting to cut their monthly fuel bill and improve competitiveness and profitability. The reduction in CO2 that flows from such initiatives is a positive externality rather than specific aim.
Furthermore, there are limits to the reductions that are possible through tweaking existing technology. After a certain point, a more fundamental change is required. It is unlikely the cost-efficiency (aka profit) motive alone will be sufficient for operators to commit to a completely new technology. For this to happen, either market or regulatory intervention will be necessary.
The cost of decarbonisation is largely a function of the cost of zero emission fuels. The energy mix in different future scenarios, can be estimated by examining a mixture of the different options for decarbonisation (e.g. speed, fuels, energy efficiency).
Combinations of these can then be selected, based on the most likely uptake under certain macroeconomic and regulatory conditions.
One scenario modelled by researchers at University College London (UCL) predicts a levelling off of HFO and MDO consumption from now until 2035, with the balance to accommodate fleet/trade growth met by biofuel sources used either in blend, or as a drop-in replacement.
The fuel mix changes more significantly after that, when the use of traditional fuels tails off dramatically as they are switched out with renewably generated hydrogen, renewable methanol and ammonia (the share of biofuel remains broadly unchanged).
Returning to the present, a range of technologies are at various stages of development and testing. These include battery-powered electric motors; hydrogen fuel cells driving an electric motor; hybrid fuel-cell/ battery driving an electric motor; hydrogen as a fuel with HFO tank for emergency; ammonia in combination with fuel cells; ammonia with emergency HFO; and biofuels.
The optimal choice of fuel, machinery and design will vary according vessel type and operational profile, taking into account the costs of implementation (both up-front capital expenditure and changes in ongoing operational expenses). If nothing else, the transition to zero-carbon ships promises to be an exciting period for marine engineers, offering them plenty of opportunity to exercise their creativity, and technical know-how, to devise new solutions that meet the requirements for achieving the zero-carbon goal.
A carbon levy is a potential tool to accelerate the attainment of different levels of ambition. UCL’s research found that a $50/tonne carbon levy, for example, could pull emissions significantly below the business-as-usual trajectory by 2050, but still above 2008 levels. Raising that levy to $100/tonne resulted in a new 30% reduction in carbon emissions compared to 2008 levels.
A Marginal Abatement Cost Curve (MACC) shows the carbon price needed to achieve certain levels of CO2 reduction. IMO’s Intersessional Working Group on greenhouse gas reduction, presents graphs showing the levies that would be necessary to achieve different absolute emission reductions in both 2030 and 2050, relative to a 2008 baseline. What is important to note, is that the graphs are stepped; not a gradual continuous curve.
In other words, they are ‘sticky’ about certain points. For example, while a $100/tonne levy should be enough to realise a roughly 30% reduction, incentivising the industry to go beyond this requires a $400/tonne levy, reflecting the significant ramp up in capital investments and structural changes needed to achieve further reductions.
The carbon pricing outcomes indicated by the UCL model tallied well with the results of a broader study into carbon pricing to achieve the Paris Agreement temperature goals by the economists Stiglitz and Stern. This is good news, as it implies that the estimates for shipping’s foreseeable cost of decarbonisation, aligns well with the cost of decarbonisation across the global economy. Furthermore, it nullifies cost-based justifications to delaying action on carbon, i.e. arguments that shipping will find it harder and more expensive to decarbonise than other sectors of the economy.
So where do we stand today? There are cautious grounds for optimism. The cost of renewable electricity is plummeting globally. Current projects in Chile, Morocco and the Middle East can, for example, supply at $25/MWh. In turn, hydrogen prices are falling rapidly and is becoming competitive with HFO.
Tellingly, it is now cheaper to produce hydrogen from electrolysis than the conventional method of steam reforming from hydrocarbons. Against this backdrop, it’s notable that Shell and ITM Power recently announced a plan to build the world’s largest hydrogen electrolysis plant at Shell’s Rheinland refinery in Wesseling, Germany, which will be capable of producing 1,300 t/y of hydrogen.
Meanwhile, Compagnie Maritime Belge has built the first commercial ship that runs on hydrogen. The Hydroville passenger shuttle can operate on compressed hydrogen, as well as regular fuel oil. It was recently certified to operate as a seagoing vessel by Lloyd’s Register, and, if initial testing goes well, CMB plans to expand the technology to engines on cargo ships. It may be a small start, but renewable power tends to be highly scalable.
To manufacture renewable marine fuels for export, a country or region would need a highly dependable supply of renewable electricity – and one that regularly exceeded its domestic power needs. Remarkably, many parts of the world fi t the bill. Current models indicate that international shipping annually consumes marine fuel with a total energy content of around 10 exajoules. This is approximately 1% of South America’s total technical potential for generating renewable energy, and less than 0.2% of Africa’s.
The Middle East and Australasia are also strong candidates. Manufacturing marine fuel could also serve as a sink for the surplus energy sometimes produced by highly variable – or spikey – renewable sources such as wind.
It’s worth emphasising that a great deal of research and development work that could be directly applied or leveraged for decarbonisation, is already underway within the shipping sector. Furthermore, we can expect the rate of progress to accelerate as decarbonisation efforts pick up momentum elsewhere in the wider economy.
As this happens, it will be helpful to periodically revisit and evaluate the trade-offs between the production, storage and use of different fuels. The numbers will fluctuate according to supply chain development, which will have a ripple effect on the commercial arguments for and against different solutions.
- The cost of reducing carbon emissions from shipping is closely linked to the cost at which zero emissions fuels can be produced.
- A carbon levy of $100/t can bring about an absolute reduction in emissions of 25-45% by 2030 and 85-95% by 2050 compared to 2008 levels. Reaching the upper end of these reduction ranges will require renewable energy prices of below $30/MWh and for hydrogen production by electrolysis to become widespread.
- Despite the excitement surrounding batteries as clean source of power, they will be technically feasible only for ferries and similar short-sea, coastal applications. Unless there is a major breakthrough in fundamental cell chemistry, batteries remain unsuited for commercial ships on deep sea routes, owing to the unfavourable trade-off between their size, weight and cargo space that would have to be sacrificed.
- Liquid renewable fuels – that is to say fuels, such as hydrogen and ammonia, which can be produced with electricity from renewable sources – show considerable potential and merit deeper exploration. They benefit from compatibility with current machinery options including internal combustion engines, and conventional gas turbines in combination fuel cells.
If you're interested in this topic and would like to get more involved, you can join the IMarEST's Emissions from Shipping Special Interest Group.