So you want to decarbonise your fleet?

BMT experts Greg Fisk and Noel Tomlinson discuss the issues and possibilities of decarbonisation in the maritime sector.

29 May 2022

Following on from COP 26, there is renewed interest and activity within maritime companies exploring targets for low carbon shipping.  Greg Fisk (BMT Global Lead for Climate Risk and Resilience) recently caught up with his colleague Noel Tomlinson (BMT Senior Business Development Manager for Commercial Maritime, UK and Europe) to discuss the state of play on all issues decarbonisation and shipping and how the maritime sector is approaching the issue.   

Greg:
Decarbonisation is obviously a critically important issue for commercial shipping and other maritime transport companies given their current reliance on carbon-based fuel.  With the International Maritime Organisation’s (IMO’s) 50% emission reduction target by 2050 now being ‘locked in’ by many organisations, what are some of the key drivers for decarbonisation at the current time and how might these priorities change in future?

Noel: 
Decarbonisation is a critically important issue for the maritime sector and although ships remain one of the most efficient methods of transport - with over 90% of the worlds goods transported by sea - it is a key sector in society’s journey to decarbonise. The Intergovernmental Panel on Climate Change (IPCC) has identified the need to act in the immediate 10 years, not just aim for 2050. So there is much more focus now, from a climate perspective, on science based targets and the need to keep temperature rises under 2 deg C.

It is also vital that we consider the whole lifecycle of the vessel from concept to disposal. The emissions generated in the shipbuilding process are significant and need to be considered if we move towards a truly decarbonised model. But along the way, investment, regulation, and technology are and will continue to be fundamental drivers in maritime decarbonisation.

Starting with investment, as the sector tends to deal in high value and long-life new assets and infrastructure required to support decarbonisation, access to finance and the confidence to invest are critical. Investment in vessels which utilise alternative fuels or energy saving technologies also drives a demand for ports to invest in the associated shore-based infrastructure and such infrastructure provides vessel owners with the confidence to invest in alternatively fuelled vessels knowing the supporting infrastructure will exist to operate them.

Regulation is another key driver and the recent introduction of an Energy Efficiency Design Index (EEXI) and Carbon Intensity Indicator (CII) by the IMO last year will force large vessel operators and owners to take action.

Finally, technology plays a huge role in unlocking the pathways to decarbonisation. Future changes in technology will fundamentally change the way the maritime sector operates from alternative fuels and propulsion systems, to autonomy, digitalisation and energy saving technologies.  Investment in technology will also mature it to the point where it can be commercially deployed on the scale required and investment in fuel production will drive down the costs of alternative energy to a commercially viable price point.

If these three factors of investment, regulation and technology can all be developed in parallel then the vision of net zero shipping operations can become a reality by 2050. However, the journey to get there starts now and we cannot lose focus on the near term targets.

Greg:
Speaking of technology, there seems to be a lot of options and possibilities out there from alternative fuels through to electrification solutions for marine vessels. Can you take us through some of these?

Noel:
Clearly, the decarbonisation of the maritime sector will take a phased approach and within this many of the options will play a part. Some as purely short term and interim solutions and some as potentially end-state solutions.

There are well over 10 available and feasible alternative fuels right now let alone the ones in development and the ones still to be discovered in the decades leading up to 2050, so which one to choose is not an easy decision. However, it should also be recognised that a number of the alternative fuels have a lower power density than carbon-based ones which means that vessel efficiency can have a significant impact on feasibility and adoption.

At the moment, fuel options can be grouped into three broad categories based on their type: Fossil fuels, Biofuels and Renewable (green) fuels.

Fossil Fuels include traditional Heavy Fuel Oil (HFO) and marine diesel but also include the more recent low sulphur fuels, LNG, LPG and methanol.  Although not likely to be the end solution these fuels continue to be used widely and will continue in the short term, particularly in the context of meeting other environmental commitments to reduce sulphur and particulate air pollution.

Good quality biofuels and synthetic fuels are becoming more readily available but reliable supply and price are key issues mainly due to the scale of production and there is a limited supply of sustainable resources before demand outstrips supply. These however provide a good alternative to diesel and can be used in four-stroke, medium- and high-speed engines allowing existing vessels to be converted to operate on biofuels.

Green fuels produced from a renewable sources can provide a longer-term solution and include green hydrogen, ammonia and fully electric storage solutions. The safety considerations with storage, handling and usage can be significant and bunkering logistics vary dependent on the fuel type.

In summary what we can say is that the future is uncertain, and the right fuel will vary depending on application domain and regional availability. Flexibility and resilience of supply will be key and so design adaptability or even multi-fuel solutions will be critical for early adopters.

Greg:
How far off are we to understanding which of these alternatives are likely to become the ‘fuel of the future’ and how and when is this likely going to be determined?  What are the biggest barriers/obstacles to moving away from carbon-based fuels for the maritime industry?

Noel:
An effective shipping transition isn’t simply a case of replacing fossil fuels with cleaner alternatives like ammonia or methanol, for example. The entire emissions generated throughout an alternative fuel’s life cycle must be considered using what is often referred to as a “well-to-wake” approach. From generating the electricity that helps produce for example green methanol (the well), to the greenhouse gases a marine vessel creates using the fuel (the wake).

One of the biggest obstacles to overcome is the cost and availability of the fuel itself and that is primarily driven by the production and distribution infrastructure, which is in turn ultimately driven by demand.  When it comes to coastal vessels, ferries, harbour vessels, short sea shipping and offshore wind support vessels, for example, a local infrastructure solution can work very well as the vessels are typically regularly going in and out of the same ports. This is very different when we look at deep sea vessels, operating on global routes and calling at many different ports. This then requires a truly global solution which works across many different countries all with very different infrastructure, investment, regulation and governmental policy. Progress is being made in international policy with the planned creation of “green shipping corridors” where infrastructure is provided to allow specific international routes to become reliably decarbonised. These flagship “green shipping corridors” formed by global collaboration could form the stepping stones for wider decarbonisation.

Greg:
Noting that a lot of maritime fleet owners are keen to reduce their carbon footprint and move toward low carbon shipping, what are some practical steps that they can look at to embark on this journey now and develop a road map to a more sustainable future?

Noel:
A current focus within the industry is around reducing carbon emissions by reducing overall energy usage through a wide range of energy saving technologies (ESTs).  EST’s are expanding and come with a whole range of associated capital investment costs, performance benefits and levels of integration complexity. This is a growing industry and one where although a number of the principles have been around a very long time, the speed of technical advancements means that more are coming to market and being more readily adopted.  However, accurate vessel specific modelling and analysis of EST’s is often required in order to select the most effective selection of one or combination of EST’s. This is essential to making an informed cost benefit decision and maximising return on investment.

From a longer term planning perspective, decarbonisation is an absolute journey and what is important now is to have a strategy or plan with some form of roadmap of how we get from today’s assets and todays operational profile to a sustainable future. This is likely to be a long-term plan over tens of years and although we are unlikely to have all the answers today, by understanding the potential pathways we can make more informed decisions reducing risk and increasing the efficiency of investment. This roadmap should also have short term targets, in order to meet the challenges of new regulations such as the IMO’s EEXI and CII; keeping an eye on both short term goals and longer term visions.

This can be a complex challenge, and the answer will not be the same for every owner or operator as the roadmap will be dependent on the size, age, type, routing, and operational profile of each vessel in a fleet along with external variables like infrastructure, policy, fuel cost and fuel availability.

As shown in the diagram below, BMT have developed some simple tools to assist our maritime clients to undertake a holistic approach and support the creation of a fleet decarbonisation pathways approach which covers three main areas:
(i) existing vessel compliance and upgrade,
(ii) development of a fleet replacement strategy
(iii) specification and procurement of new vessels.

Decarbonisation pathways

Meet the experts

Greg Fisk

Global Lead - Climate Risk and Resilience

Greg Fisk

Global Lead - Climate Risk and Resilience

Greg is a Senior Associate at BMT and leads the firm’s global campaign related to climate risk and resilience. Based in Brisbane, Australia, Greg has over 25 years of experience in natural hazard and climate change planning and adaptation studies with planning, transport, and conservation authorities.

Noel Tomlinson

Senior Business Development Manager

Noel Tomlinson

Senior Business Development Manager

Noel is a senior business leader with a passion for ensuring high standards and quality of delivery and a track record of delivering growth. He uses his vision and market knowledge to grow market share by setting strategic business direction and successfully leading the delivery of the sales and marketing function. He has over 20 years' experience in the maritime sector, working within both defence and commercial maritime.

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