Decarbonisation In Shipping
BE&R attended the session on decarbonization in shipping by DNVGL. The summary of the presentation is provided in this article along with input from BE&R experts. BE&R is a part of the Joint Industry Partnership headed by DNVGL looking into the Australian East Coast LNG bunkering opportunities.
The webinar was divided into three sections presented by three experts from DNVGL: Eirik Nyhus, Jan-Olaf Probst, and Christos Chryssakis.
The sections were as follows:
- Regulatory Updates by Eirik Nyhus.
- What Can be done to existing and new build vessels? by Jan-Olaf Probst.
- Overview of decarbonization options by Christos Chryssakis.
Summary of Regulatory Outlook for GHG emissions:
International Maritime Organisation (IMO)
IMO has set the target of 40% reduction in intensity of GHG emissions by 2030 and 70% reduction in intensity by 2040 with 2008 as the base year for the maritime industry with effective strategy such as Sulphur cap of 0.5% from January 2020. Considering the gap between the current GHG emissions and the expected reduction in emissions by 2030 and 2040, IMO is on the verge of finalizing two short-term approaches under consideration which are as follows:
- Energy efficiency existing ship index EEXI (EEDI for existing ships): Mandatory design efficiency improvements for all ships to retrofit their engines to improve the efficiency. The operators must decide what to optimize and how to achieve the target given in the table below. These required EEXI has been calculated using the simplified EEDI methodology. The measures are imposed through the local port state control.
| Ship Type | Required EEXI |
| Bulk carrier | +20% |
| Tanker | +20% |
| Container | +30-50% by size |
| General Cargo | +30% |
| Gas Carrier | +20-30% by size |
| LNG Carrier | +30% |
| Reefer | +15% |
| Combo | +20% |
| Ro-Ro | +20% |
| Cruise Ships | +30% |
- Enhanced SEEMP: Mandatory reduction targets for operational emissions have been set and considers carbon intensity indicator (CII) with IMO defined mandatory CII target per ship type using 2008 EEDI baseline. This involves yearly audits with some flexibility and each ship must meet the required CII targets. The reduction targets for different carriers are as follows:
| Ship Type | 2008 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 |
| Overall | 0 | 26% | 28% | 30% | 32% | 34% | 36% | 38% | 40% |
| Bulk Carrier | 0 | 27% | 29% | 31% | 32% | 34% | 37% | 39% | 41% |
| Gas Carrier | 0 | 26% | 28% | 30% | 32% | 34% | 36% | 38% | 40% |
| Tanker | 0 | 26% | 28% | 30% | 32% | 34% | 36% | 38% | 40% |
| Containership | 0 | 27% | 29% | 32% | 35% | 38% | 41% | 43% | 45% |
Key Medium-term proposals : IMO has made proposals to build International maritime Research and Development Board (IMRB) and setting up of GHG and carbon factors for various fuels to be used for regulations and controls, which are expected to be enforced by 2023. Moreover, methane emission regulations and energy efficiency design index (EEDI phase 4) are also proposed.
All these measures have been impacted by the COVID-19 and has delayed the meetings and execution of plans as proposed in the measures.
European Union Plans:
With aim to achieve the climate neutral Europe by 2050, EU is planning to bring in “European Green Plan” with the motive to bring new regulations in place such as CO2 tax for maritime industry. EU has been trying hard to put its regulations in place earlier than IMO considering the slow pace of IMO work with a plan to bring EU green plan involving “zero pollution action plan for water, air and soil” by 2021 which may drive the regional measures. Additionally, the norms for NOx and SOx are also in discussion such as scrubber discharge water restrictions with Mediterranean ECA proposal coming in few months’ time.
Environmental goals of shipping Industry:
The shipping fleet across the world is facing many challenges such as uncertainties related to future regulations and fuel availability. It has become imperative for the existing vessel owners and the new builders to look closely into the maritime carbon emission targets and what they are bound to do to evade any penalties or taxes in the future? The existing vessel owners/operators must work on fuel efficiency as reduction in fuel use is equal to the reduction in carbon emissions. Moreover, modifications/retrofitting is required to implement the proposed EEXI norms and to operate existing vessels till 2030 adhering to all the norms and regulations in place. New builders need to investigate the availability of equipment and their delivery within the given time frame and how they can avoid any type of modifications/retrofitting in future with the current design considering the target line of IMO for 40% reduction in carbon intensity.
Availability of Fuels and regulations
There are a variety of low carbon intensity fuels available in the market, but their availability has been a concern as most of them are not produced at a level which can meet the demand of the current shipping industry. The availability of alternative fuels such as LNG, biodiesel, Methanol, LPG, ammonia and other for bunkering is still an issue. Although the production capacity of LNG is enhancing with new projects being announced around the world, but the bunkering infrastructure is still in the developing stage and this may take a few more years to have LNG bunkering stations at all the major ports. The production capacity of fuels other than LNG is not very high and the bunkering stations are still in plans which may take more time than the LNG bunkering stations to come into operations. The current consumption if considered to be replaced with alternative fuels will require industry to increase their production capacity as given in the image below along with the investment in the bunkering stations at the ports.
DNVGL has investigated the various parameters which can reduce the GHG emissions. The extent of this reduction can vary such as ship speed reduction, can reduce GHG by 7-10%, Supporting Systems 3-7%, Main and Auxiliary engines 5-8%, Fuel 20-25%, Deadweight Increase by 3-4%, Propulsion improving devices by 2-3%, Bulbous and hull lines by 3-5%.
Decarbonization Options:
The extent of carbon generation can be reduced through various methods as proposed by DNVGL. Speed reduction can reduce the GHG by 7-10% along with improvements in supporting Systems (3-7%), Main and Auxiliary engines (5-8%), Fuel (20-25%), Deadweight Increase (3-4%), Propulsion improving devices (2-3%), Bulbous and hull lines (3-5%).
DNVGL has evaluated the area of decarbonization in the value chain of shipping comprising of logistics and digitalization, hydrodynamics, machinery, and fuels and energy sources and believes 100% GHG reduction can be achieved through technical and operational measures if alternative fuels are available as per demand, the necessary infrastructure is in place for bunkering and the onboard storage issues are resolved. Logistics, energy efficiency, speed reduction, and fuel are the CO2 containment measures which if implemented would reduce the CO2 emissions to the target by 2050 as given in the image below.
Fuel flexibility and bridging technologies- the three pillars
There are variety of alternative fuels available, but the most prominent ones are LNG and LPG. However, the advancement in technologies and the replacement of LNG and LPG with other non-fossil fuels such as Biodiesel, Synthetic Diesel, Ammonia, Hydrogen, and Bio-LNG can meet the demand of shipping industry by 2050.
LNG as fuel
LNG is considered as the most viable and cheapest option as an alternative fuel for the shipping industry. The demand of LNG has increased five times since 2016 and it is expected to increase as more LNG powered ships are being ordered. The new LNG powered ships order has seen a tremendous increase across all type of ships due to the investment in the bunkering infrastructure, availability, and low LNG prices. The LNG bunker capacity is expected to increase by 6 times by 2021.
DNVGL is also working with various industry partners regarding the use hydrogen and ammonia as alternative fuel but the economics and availability has been an issue. However, these fuels have high GHG emission if the source of their production is from fossil fuels but comparatively less than the traditional fuels. Similarly, methanol, hydrogen, ammonia can reduce the GHG emissions at an extended rate if their source of production is renewables.
Fuel storage limitations
CNG at 200bar and NMC (Nickel manganese cobalt oxide) battery cell have the best storage density amongst the alternative fuels as illustrated in the graph below. There are many limitations associated with the onboard storage of fuels such as boil off gas issues. LNG as the only available source more than demand in bunkering, has the boil off gas and storage space issues which limit its usage in shipping. If all forms of diesel are replaced with alternative fuels such as LNG, CNG, ammonia, methanol or bioethanol, the storage density is significantly impacted making the onboard storage more efficient.
Environmental performance of alternative fuels:
Majority of the alternative fuels have similar GHG emissions to conventional fuels if their source of production is fossil fuels. Hydrogen and methanol if produced from non-fossil fuels have lower CO2 emissions. The green hydrogen produced from water has very less GHG emission but the production at the commercial scale is an issue at the current stage and will to take few more years to be easily available for the shipping industry as the main fuel.
