On a ship to nowhere?

1st December 2016


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Michael Brady

The shipping industry has so far escaped setting a long-term plan to cut its carbon emissions. Is this about to change? Alex Marshall reports

Over the past ten years, a German start-up has arguably attracted more media attention than any other company working to green the shipping industry. Undoubtedly, Hamburg-based SkySails has been assisted by a proposition that is easily understandable: It wants to install huge kites – 320 sq m in size at first – that can be released from the front of ships to help to tow them across oceans. These could cut fuel use by 35% in favourable winds, the company claims, with a similar reduction in carbon.

In 2011, agriculture and food business Cargill announced it would trial the technology for five years on a cargo vessel, a decision that elicited much positive news coverage. However, it is a different picture for SkySails today. ‘Due to the low oil price and shipping’s poor economics, investment in wind propulsion is unattractive for shipowners,’ says Henning Kuehl, the company’s head of marketing and business development.

Money, money, money

The ‘poor economics’ Kuehl refers to is a huge overcapacity after the 2008 financial collapse. This has led to regular bankruptcies, most recently South Korea’s Hanjin Shipping, then the world’s seventh-largest container carrier, and governments are propping up many shipbuilders.

‘There is also a structural problem in the market,’ says Kuehl. Ship owners do not normally pay for fuel; charterers do. And charterers are restricting themselves to short-term contracts because they know the overcapacity shows little sign of abating and prices will continue to fall. Charterers have no incentive to invest in novel propulsion systems for trials, let alone ones with an estimated three to five-year payback.

These issues have forced SkySails to refocus and it is now trying to use its technology for other purposes, such as generating electricity. ‘Don’t get me wrong,’ Kuehl says. ‘We are still convinced wind power will find its way to the shipping industry as it’s the cheapest source of energy on the high seas. The question is, how long will it take?’

Escaping regulation

Shipping is the only major transport sector so far to have escaped major regulation to cut its emissions. Unlike aviation, shipping is not part of the EU’s emissions trading system (ETS). Part of the reason is that it is a relatively green form of transport. It is responsible for only about 2.5% of global carbon, although that is due to grow. The International Maritime Organization (IMO), the UN agency that regulates shipping, expects emissions to rise by up to 250% by 2050 and be responsible for 17% of annual global carbon output.

These emissions need to be halved by 2050 if the sector is to contribute its fair share to keeping the global temperature rise below 2°C, according to research from University College London’s Energy Institute and the University of Manchester (see panel, below).

In 2011, the IMO agreed a measure for new vessels called the energy efficiency design index. However, this regulatory system quickly proved inadequate, with many ships already meeting targets for 2025. Environmentalists hoped this situation would change when IMO’s Marine Environment Protection Committee convened for a week-long meeting in London in October.

Several European countries had called for a working group to be set up to urgently agree shipping’s share of future emissions, and then develop processes to meet it. However, lower income countries, including China, India, Brazil, Iran and South Africa, opposed the move. ‘Shipping has become truly indispensable to the world,’ they said in a joint paper submitted to the meeting. ‘As long as world trade is growing, shipping will grow too. This responsive characteristic…makes it impossible to determine its peak emissions in the same way that a country would do.’

The IMO needed to collect and analyse data on ship emissions before taking any action, they said, and forecast that policies would not be agreed until 2025 at the earliest.

In the end, a compromise was reached. The IMO agreed to set up the working group but only to develop ‘an initial greenhouse gas strategy to be adopted in 2018’. A final strategy will not be approved until 2023, and it may only be that which includes a target and measures to meet it.

Unsurprisingly, reaction was mixed. NGO Transport & Environment called it an ‘abject failure’ and urged shipping to be brought under the ETS. But Ellen Burack, Canada’s IMO negotiator and one of the few delegation heads who would talk to the press, said the deal ought to be regarded as progress. ‘A year ago, people wouldn’t even discuss the idea of a strategy,’ she told the environmentalist at the meeting. ‘We’ve now agreed to meet one or two extra weeks a year to just talk about climate policy. Those discussions also have a more precise timeline, with key results due in 2018. It is a step forward.’

Yet the part of the meeting that could have an immediate impact on shipping emissions had nothing to do with climate change. The IMO also agreed to ban high-sulphur fuels from 2020 to cut pollution. This is likely to double fuel prices and should cause ship owners to refocus efforts on trying to save fuel to cut costs, although it could also lead to investment in sulphur-removing scrubbers – which, paradoxically, would increase carbon.

A shopping list of options

It would be wrong to say shipping firms have done nothing to cut their emissions. Maersk, the world’s largest, has a target to cut carbon by 60% on each container moved by 2020 compared with 2007 levels. It had achieved a 42% reduction by the start of 2015. The biggest contributor to this fall has been slow steaming, says John Kornerup Bang, Maersk’s climate change lead. This involves ships travelling at a slower, steady speed rather than rushing to ports and having to wait outside, burning fuel. Other measures that have helped include route optimisation, installation of waste heat recovery systems, new propellers and bulbous bows to reduce drag, and painting hulls more often to reduce friction with the sea (see panel, below).

The Mediterranean Shipping Company, the world’s second largest shipping firm, is at the end of a five-year $250m investment programme to improve the efficiency of about 200 vessels. A spokesperson says this will save two million tonnes of carbon a year, although the company will not reveal its total emissions to show what percentage that is. The company’s 2M network with Maersk, in which the two firms share vessels, has also cut emissions by 10%, the spokesperson adds.

‘The [financial] driver is still there to do more,’ says Bang. ‘We are confident we will meet our target. But we are reaching the part where, if you look further ahead, we will need regulation to help us. If market conditions are similar – and there are scenarios in which prices continue to drop – we will need help to make efficiencies more affordable.’

Maersk is working on more fundamental ways to cut its emissions beyond efficiency gains. ‘At this point, the most promising potential is in liquefied natural gas and biofuel, but others might become more interesting in the more distant future, such as batteries run by wind or solar,’ says Mads Stensen, Maersk Line’s global sustainability adviser.

But Bang insists there needs to be developments at the IMO for any of that work to come to fruition, which is why Maersk is stepping up lobbying for a long-term emissions trajectory to be agreed in 2018. Questions around how that will be met, what responsibilities will be placed on operators and who will pay for them can wait, he adds.

The first part of Maersk’s campaign is a policy paper, issued in November by the Danish Shipowners Association, of which the company is a member. This states that shipping’s emissions need to peak in 2025 if the industry is to respect the Paris climate change agreement. Regulation may lead to firms buying offsets to cut their emissions in the 2020s and 2030s but, after that, the industry will need to transform significantly.

‘The world is going to decarbonise. Shipping is going to decarbonise. Saying “we want to be exempt as we’re the greenest form of transport” will not make us stronger,’ Bang says.

In limbo

Most companies working on novel ways to power ships seem resigned to having to wait for serious action. ‘It will take a while, but I do expect our technology to be seen on a lot of ships,’ says Noah Silberschmidt, chief executive of London-based Silverstream Technologies.

Silverstream makes an air lubrication system, in which a layer of micro-bubbles is produced underneath the hull to reduce friction. This saved 4.3% of fuel in trials on a Shell-chartered tanker over the winter of 2014–15. Silverstream will be installing the technology on a Norwegian Cruise Lines vessel in 2017.

Using current fuel prices as a guide, Silberschmidt says his technology will pay back in three to five years, but admits even that is too long given that the industry is still in a crisis. Another issue for these types of technologies is the sheer diversity of ship types and the routes required to undergo trials. ‘If you have a car, it’s relatively straightforward to show whether a technology works or not,’ he says. ‘In the sea environment, you have many variables with wind, currents, temperatures and vessels.’

Tuomas Riski, chief executive of Norsepower, agrees. His firm makes a version of the Flettner rotor – a spinning cylinder that uses wind forces to propel ships forward – that can be installed on to ship decks. In trials, it has shown an average 6% fuel saving. ‘If nothing happens, our market is totally determined by the fuel price,’ he says. ‘But our expectation is there will be some kind of market mechanism [for carbon], and if that happens…’ He trails off as if to show lingering uncertainty over how shipping firms would react in such circumstances.

There are, of course, those for whom a delay is a good thing. Recycling Technologies, a spin-off from the University of Warwick, is intending to use pyrolysis to take waste plastics and convert them into a low-sulphur hydrocarbon called Plaxx. This is a soft wax at room temperature, but a liquid fuel at 70°C. The company has started tests to find out whether it can be used in marine diesel engines without increasing wear. Rupert Haworth, Recycling Technologies’ marketing director, says several years’ work lie ahead before approval could be granted for the use of Plaxx, which is likely to be suited to ferries with single bunker points.

The question of whether shipping will decarbonise does seem beyond doubt: it is a matter of when. But there are reasons to be hopeful this will be sooner rather than later. At the IMO meeting, China surprisingly remained silent in discussions on climate change, according to sources. That is a sign, perhaps, that it will not block any action in 2018. But perhaps a more important reason is a simpler one: growing awareness. ‘From our perspective, the reason shipping hasn’t really done anything so far is it’s very much out of mind – there is no public pressure,’ says Nishatabbas Rehmatulla, a research associate at UCL’s Energy Institute. ‘Unless you live near a port, you probably don’t ever think about shipping.

‘But we saw with the sulphur ban that just a little attention was enough to force the IMO to act. We’re starting to see awareness growing on shipping’s carbon emissions too. If that continues, maybe we could see a similar change.’

Measures to improve fuel efficiency of ships

Container vessels, designed for speed

  • Speed reduction 23%
  • Waste heat recovery 4%­–10%
  • Lightweight construction 7%
  • Hull coatings (reduce drag) 5%
  • Bow thruster improvements 5%
  • Efficiencies of scale (larger ships) 4%
  • Autopilot adjustments 4%
  • Propeller blade redesigns 2%

Tankers and bulk carriers, designed for long, slow voyages

  • Wind power 20%
  • Better route planning 10%
  • Improved design such as slender hulls 9%
  • Air lubrication under hull (reduces drag) 5%
  • Better rudder and propeller design 4%
  • Hull cleaning (reduces drag) 3%
  • Improved engine tuning 1%
Source: Sustainable Shipping Initiative, data from Korean shipbuilder Daewoo and Finnish shipbuilder Wärtsilä.

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