Letter from the Editor

EDITOR’S LETTER

THAT INDUSTRY – and the world at large – is on a road to decarbonisation is now surely beyond doubt. How it gets there is still an open question but what looks likely to be of greater concern is how much it is all going to cost.

There are plenty of options being touted as alternatives to fuel industry, keep transport moving and help us all stay warm and cosy at home. There is no single solution – but then again, we currently use all manner of hydrocarbon-based fuels for those purposes: coal (and lignite), oil and its various refined products (including LPGs), natural gas and, in less developed parts of the world, wood.

Those products are traded globally and, as a result, there is a big maritime industry dedicated to their transport. In Europe, for instance, where natural oil and gas resources are insufficient to meet regional demand (and getting ever more insufficient), many hydrocarbons are imported in vast quantities to meet the needs of industry, commerce and people. Throughput figures for the Port of Antwerp, quoted in this month’s HCB, show something of the size of the trade.

If we are to move towards a dependence on non-hydrocarbon, renewable fuel sources, Europe will inevitably find itself in the same position: while there has been a lot of investment in photovoltaic and wind power – and possibly in tidal power in the future – and hydro-electric generation is well established in those fortunate locations that are suited (and we might also add nuclear power, though that is currently rather unfashionable), those renewable energy sources are also unable to meet the growing need for power, a need that is only going to get greater with the move to electricity-based mobility.

Therefore, it is likely that renewable energy will need to be imported into Europe in similar volumes to the current trade in hydrocarbons. Indeed, the volume will likely be even greater, given the lower energy density of hydrogen, ammonia or green methanol, each of which is being touted as a viable alternative fuel. Shipping companies, shipyards, classification societies and naval architects around the world are currently beavering away on concepts and designs for the necessary vessels to carry those products at scale, with some promising projects already underway. Similarly, as we report on again this month, other companies are looking at developing a logistics chain for the disposal of captured carbon dioxide.

But those solutions are still some way off from being able to deliver the fuels that Europe will need in the volumes that will be necessary (leaving aside the question of whether the electricity distribution network is up to the job of moving all those electrons around to consumers). In the meantime, we are stuck with lower-carbon alternatives (mainly based on gas) and financial mechanisms to promote energy efficiency.

In its annual results for 2021, reported this month, Odfjell contemplated the additional cost of meeting EU carbon emissions reductions targets due to come into effect next year, specifically through Carbon Allowances, currently trading at around $90/tonne. That cost will have to be passed on to charterers and, ultimately, end users – and that means you and me. That might be considered a small price to pay to save the plant, although it could well prove to be too little, too late.