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Reducing maritime carbon emissions
The impact of climate change regulations on global shipping
Stephen Metzger PhD - Principal, International Competitive Assessments
The global shipping industry is in the vortex of a chaotic market with levels of demand for shipping services and freight rates at historic highs. At the same time, the industry must deal with impending climate change regulations focused on reducing the industry’s carbon footprint. This article deals with the latter issue, but it is important to bear in mind that current market conditions will play a role in whether or not the pending regulations can be effectively implemented.
MEPC 76: from goals to measurement to compliance
The June meeting of the IMO’s Maritime Environmental Protection Committee (MEPC 76) successfully gained member consensus on two important issues:
• Acceptance of the IMO’s carbon reductions goals: 30% reduction by 2030 and 50% reduction by 2050, as compared with 2008 levels;
• Acceptance of two carbon emission measurement tools, the Energy Efficiency [for] Intensity Indicator (CII).
Existing Ships Index (EEXI) and the Carbon
EEXI AND CII POINT THE WAY TO SYSTEMIC CARBON REDUCTION
The EEXI establishes a “Required EEXI” for specified ship types, and an “Attained EEXI” to be calculated for each individual ship. The calculation of Required EEXI builds on the Energy Efficiency Design Index (EEDI), with a table of reduction factors specific to the EEXI calculation.
Vessels over 5,000 gross tonnes will be required to quantify and report on carbon emissions from operations on a yearly basis called the Annual Operational Carbon Intensity Indicator report. The CII provides ship operators with the factor by which they must reduce CO2 emissions annually to ensure continuous improvement and regulatory compliance.
To summarize, the EEXI is established by reference to technological factors and sets a standard for compliance by ship type and individual ship. CII, on the other hand, is a measurement of carbon emissions occasioned by actual vessel operation. Comparison of the CII, to the EEXI, signals the degree of compliance and provides a set of required improvement factors. For more information on the EEXI and CCI see: https:// www.bvsolutions-m-o.com/magazine/ understanding-new-imo-decarbonizationmeasures-eexi-and-cii .
LNG, hydrogen, and ammonia vie for position as the dominant alternative maritime fuel
Given the tools of carbon measurement and the goals to be achieved, shipping must find a substitute for heavy fuel oil (HFO), which is now, almost universally used to power vessels of all sizes.
LNG, ammonia, and hydrogen are considered, and promoted by their respective interest groups, as alternatives to HFO, none of the three likely candidates, offer a uniquely clean emissions solution. Here are the issues in each:
LNG: In the process of extraction transmission, and combustion, LNG gives off methane gas, which has particularly deleterious effects on atmospheric temperatures because of its capacity for heat entrapment. A study by the International Council on Clear Transportation determined that use of LNG even over a relatively short 20-year period offered no net benefits, as compared with conventional bunker fuel oil. See: https:// theicct.org/publications/climate-impactsLNG-marine-fuel-2020 .
Hydrogen: Uses natural gas as the source of methane, which is converted to carbon dioxide and hydrogen. In an article published in Energy Science and Engineering on August 12, researchers from Stanford University and Cornell concluded that even with carbon dioxide capture, emissions in the form of methane remain “very large”. See: https://news. cornell.edu/stories/2021/08/toutedclean-blue-hydrogen-may-be-worsegas-or-coal.
Ammonia: Ammonia is composed of nitrogen and hydrogen. Natural gas is a source of hydrogen and nitrogen is drawn from the atmosphere. The elements are combined in a refinery process to produce ammonia. Ammonia can be a carrier and storage agent for hydrogen – the ammonia then cracked back to hydrogen at the point of use. Methane leakage is again a problem in the production and use of hydrogen, while burning ammonia gives off the nitrogen oxide pollutant. Use of either of these fuels requires significant modification of currently available IC engines now used in the maritime industry. An excellent overview of these issues can be found here: https://www.power-eng.com/ gas/op-ed-whats-the-verdict-on-ammoniaas-fuel-or-as-hydrogen-carrier/.
The real challenge – a dose of realism from MSC’s CEO
Given these complexities that have to be worked out over time, perhaps the most realistic assessment was given by Søren Toft, the newly appointed CEO of Mediterranean Shipping Company (MSC) in an interview with the Financial Times. Toft stated, “The big decarbonization challenge will only be solved when we have carbon neutral fuels available at scale,” adding that until such fuels come into place MSC would be focused on energy efficiency improvements for its fleet in the interim.
Impact on Caribbean shipping and the Caribbean region’s participation in climate change initiatives
Complexities aside and despite Toft’s misgivings, the two major cruise lines serving the Caribbean have taken definitive positions with regard to fuel choice. Carnival has explicitly stated that its next class of ships will be powered by LNG, while Royal Caribbean has indicated the same intention, albeit suggesting fuel cell technology will be an ongoing consideration.
The endorsement of LNG as the fuel of choice by these two giants of the cruise industry, lends further impetus to plans for establishing LNG hubs in key locations in the Caribbean. Projects already started include Jamaica’s floating LNG storage and distribution system in Old Harbour Bay, St Catherine and Aruba’s electric power/refinery project with Houstonbased Eagle LNG Partners. We may well see Belize involved in similar projects. The country recently became part of The GreenVoyage2050 Project, a partnership project between the Government of Norway and the IMO, aiming to transform the shipping industry towards a lower carbon future. In particular the project will also build capacity in developing countries, including small island developing states.
Of no small note is that Guyana and neighboring Suriname will become major global sources for oil and gas. Thus, the Caribbean could well become a massive regional hub in terms of both supply and demand of LNG for shipping – and a force for boosting the shift to cleaner maritime fuels.
Stephen Metzger PhD - Principal, International Competitive Assessments
