This week the global maritime transport industry made a plan to tax Bunker fuel for up to ten years, and use the proceeds to fund a $5 billion R&D program to slash ocean transport emissions.
This is typical of how the maritime agencies tend to deal with their problems, and it hopes to bring in the plan during 2023. Next Month the long standing outcome of a similar prior campaign – to decimate Sulphur Dioxide emissions, will come into play after a 3 year notice period, which most shipping firms will achieve through using fuels that have the bulk of the Sulphur removed.
The R&D contribution from 2023 onwards will be $2 per tonne of marine fuel purchased. But the CO2 issue is perhaps one of shipping’s toughest challenges, and so it plans an entirely new shipping R&D program to eliminate emissions from international shipping.
As trade has become increasingly international, maritime transport is the bulk carrier of choice, and transports around 90% of global trade. This means that it gives off around 2% of the world’s anthropogenic CO2.
The global shipping regulator, the UN International Maritime Organization (IMO) in behind the move, and it is hoped that by 2030 zero carbon ships will be common.
The IMO targets are to cut 50% of shipping emissions by 2050, regardless of how much trading grows, with full decarbonization shortly after.
The 2050 target will need an improvement of around 90% which means that simply extracting further chemicals from the fuel won’t be enough.
There are broadly two approaches – to replace the fuel with something that simply does not have carbon in it, or to develop new electricity driven propulsion systems. The technologies they will look into are green hydrogen, ammonia, fuel cells, batteries and synthetic fuels produced from renewable energy sources.
These technologies all exist, but the issue is how to create them at scale, and put them on large commercial ships, especially those engaged in transoceanic voyages and put them where it is easy to purchase fuel.
There seem to be three schools of thought. One is to put wind farms in the ocean, which feed electricity into floating chemical plants which create hydrogen from electrolysis of seawater, and then merge that with Nitrogen from the air to create Ammonia. This works as a replacement for Bunker fuel and we first came across this idea from the Zeeds consortium last June, which stands for Zero Emission Energy Distribution at Sea and which was backed by six Nordic firms – Wärtsilä, Aker Solutions, Equinor, DFDS, Grieg Star and Kvaerner.
There are around 200 ports which currently hold Bunker fuel and the idea to replace them is to build 6 or 7 global hubs like this and fill ships up without them stopping, by having a fueling ship pull alongside and refuel on the move.
The second and third approach relies on hydrogen either directly as a fuel using a new type of engine, or via electricity, which is generated from hydrogen. These two approaches seem to us far less attractive in terms of both efficiency and overall system replacement time. In both instances some renewable energy must be used to create the hydrogen in the first place – so either offshore wind farms, or floating solar in harbors, which drive the hydrogen creation process.
There is no way that this will take ten years to resolve, nor all of that $5 billion of cash and we would anticipate a plan in the 3 to 4 year timeframe, which emerges for implementation, so if it starts in 2023, then a potential solution by 2027.
The international shipowner associations making this proposal include Bimco, Cruise Lines Intl, Intercargo, InterFerry, international Chamber of Shipping, InterTanko, International Parcel Tankers Assoc and the World shipping Council.
Speaking on the announcement, Esben Poulsson, Chairman International Chamber of Shipping said, “The coalition of industry associations behind this proposal are showing true leadership. The shipping industry must reduce its CO2 emissions to meet the ambitious challenge that the International Maritime Organization has set. Innovation is therefore vital if we are to develop the technologies that will power the 4th Propulsion Revolution. This proposal is simple, accountable and deliverable and we hope governments will support this bold move.”