The latest analysis of CO2 emissions based on vessel tracking data (AIS), vessel specification data and the vessel order book by Swedish big-data firm Marine Benchmark shows that CO2 emissions will continue to rise.
The research carried out in partnership with major shipbroker Simpson Spence Young (SSY) found that most of the efficiency gains possible by the shipping industry to drive down its carbon footprint have already been made over the past decade. It also forecast that the proportion of eco-ship newbuildings entering the global fleet would drop to historic lows and noted that the use of LNG as a transitory fuel remained relatively small.
According to Alastair Stevenson, Head of Digital Analysis at Marine Benchmark, the current lack of investment in modern tonnage and a potential economic rebound implied lower ship scrapping activity over the next couple of years.
He said: “We’re going to see older and older vessels on the water and the impact of the marginal gains already made from running ships more efficiently have already been felt. To bring down absolute emissions without impacting global trade, scalable low carbon fuels and new ships and engines to run them are needed.
However, many shipping investors are sitting on their hands waiting for technological breakthroughs and regulatory certainty. The implications are that the shipping industry cannot deliver an absolute reduction in CO2 emissions by 2030.”
Although the shipping industry has reduced its carbon intensity by more than 30% since 2008, overall CO2 emissions from the sector have risen by an average annual rate of 2.1% to reach 800 tonnes in 2019. The current pandemic has weakened this growth to 1.7% as emissions in the first nine months of 2020 have fallen by approximately 2% from 2019 levels. This is despite slower steaming speeds, the increased economies of scale of larger vessels, eco-vessel designs and the use of LNG as a fuel.
Trafigura calls for huge carbon levy, and invests in hydrogen
Major charterer Trafigura has proposed that the IMO should introduce a carbon levy of between US$250 and $300 per tonne of CO2 equivalent on shipping fuels, in order to make zero- and low-carbon fuels more economically viable and more competitive. As World Bunkering went to press Trafigura announced it had become a major investor in green hydrogen by committing US$62 million into Swiss-based H2 Energy Holding, described as a “business innovator in green hydrogen solutions”.
In the Trafigura proposal the system would be overseen by the IMO and would involve charging a levy on carbon-intensive fuels and subsidising low- and zero-carbon fuels. The proposed levy range is more than a hundred times higher than the $2 a tonne levy proposed by the shipping industry for funding research and development. In very broad terms it would double the cost of conventional bunkers.
In IMO terminology, this would be a Market Based Measure. A Trafigura statement said: “We believe that only through the introduction of a significant levy on carbon-intensive fuels can sufficient progress be made towards the decarbonisation of the global shipping industry.”
Trafigura is proposing the introduction of a global carbon levy on carbon-intensive shipping fuels in the form of what it describes as a “partial ‘feebate’ system”. Feebate is a contraction of ‘fee’ and ‘rebate’ and is used to mean a fee on the purchase of goods with undesirable characteristics with the revenues gained used to finance
a rebate for more desirable ones.
Trafigura explained: “The revenue raised by the levy would primarily be used to subsidise and incentivise low and zero carbon fuels and subsequently also be used to fund the research and development of alternative fuels, and in part to help small island developing states and other developing countries with the energy transition and to mitigate the impact of climate change. The inclusion of these elements is why we refer to the scheme as a partial feebate system.”
Meanwhile Trafigura announced it had committed to invest an initial US$62 million, with US$20 million as capital injection, into H2 Energy to “further support the development of the production, storage and distribution of green hydrogen for refuelling stations and industrial customers”. The remaining part of the investment will be provided to seed and fund the development of a 50:50 joint venture based in Zurich that will “roll out green hydrogen-based ecosystems and to invest in hydrogen infrastructure and hydrogen application-related projects across Europe, excluding Switzerland”.
LR backs decarbonisation, opposes regional regulation
Lloyd’s Register [LR] has launched a “dedicated centre of excellence” that is intended to “accelerate the safe, sustainable and cost-effective decarbonisation of world shipping in support of delivering greenhouse gas (GHG) reduction targets”. At the same time LR has made it clear it does not support regional regulation to achieve GHG reduction targets.
According to LR, the Maritime Decarbonisation Hub, a joint initiative between Lloyd’s Register Group and Foundation, brings together thought leaders and subject matter experts with the skills, knowledge and capability to help the maritime industry design, develop and commercialise the pathways to future fuels required for decarbonisation. A steering group of external stakeholders is in place to ensure the hub focuses on the challenges that matter to industry.
LR said that, under the leadership of Charles Haskell, LR’s Decarbonisation Programme Manager, the LR Maritime Decarbonisation Hub is open to undertaking and actively seeking partnerships with stakeholders across the industry, focused on creating a more sustainable future for shipping and contributing to society’s global challenge of slowing climate change.
Meanwhile LR issued a statement saying it was “aware that there have been calls for greater regional regulation of the global shipping industry at this year’s virtual Global Maritime Forum (GMF) event”.
These statements were made in relation to the speed with which regulatory measures are being imposed to address the maritime industry’s decarbonisation challenges. LR clarified it position: “Some media have also reported that greater support for regional regulations may be among the recommendations coming out of this year’s Global Maritime Forum. LR is a Strategic Partner of the Global Maritime Forum, but does not support these or any calls for greater regional regulation in support of decarbonisation.”
LR Group CEO Alastair Marsh emphasised: “We believe that global regulation to reduce the maritime industry’s greenhouse gas (GHG) emissions, set by the IMO as the shipping regulator, is in the best interests of all shipping stakeholders. Lloyd’s Register is committed to working with all industry players to halve GHG emissions from 2008 levels by 2050. To do this, zero-carbon vessels must enter the world fleet by 2030, along with the necessary fuels and land-side infrastructure, and we are actively supporting our clients to achieve these ambitions.”
Carbon capture progress
Scientists from the UK’s University of Southampton have invented a hybrid catalyst platform that is said to be able to “efficiently and sustainably convert carbon dioxide into versatile plastic materials”.
Asked by World Bunkering if the development could have a marine application, a spokesman said: “We are working on this with the Southampton Marine Maritime Institute. We are indeed interested in on-board methanol and dimethyl ether (DME) production, using a reactive capture system, that could re-purpose the captured CO2 for effective carbon utilisation.
The Viridi CO2 platform, created by Dr Daniel Stewart and Professor Robert Raja, has recently been recognised by the UK’s Royal Society of Chemistry (RSC) as a winner of its 2020 Emerging Technologies Competition.
According to the university, the novel chemistry solution could be used to more effectively produce tens of millions of tonnes of plastics used annually in mattresses, clothing and building insulation, while also reducing carbon dioxide emissions.
Cold ironing plan at Rotterdam
The Municipality of Rotterdam and the Port of Rotterdam Authority say they are working together on the joint roll-out of shore-based power for sea-going vessels in Rotterdam.
By 2030, they want a “significant share” of sea-going vessels to ‘plug in’ once they have berthed at the port’s quays. Over the next five years, the partners will be initiating a series of projects that are intended to accelerate and scale up the adoption of shore-based power. Depending on the experience gained in these projects, the Municipality and the Port Authority may adapt their targets in this area in 2025.
It is claimed that, by 2030, Rotterdam’s shore-based strategy could result in carbon savings of approximately 200,000 tonnes per year.
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