VOYAGE TO DECARBONIZATION

Linda Sigrid Hammer is a principal consultant at DNV, a maritime industry riskmanagement company based in

Norway • SUBMITTED

Roger Holm is president of marine power and executive vice-president at Finland-based

Wärtsilä Corp. • WÄRTSILÄ CORP.

But an underlying key to the decarbonization conundrum for ship owners is fuel flexibility, said Linda Sigrid Hammer, a principal consultant working in maritime advisory for DNV, a maritime industry risk-management company based in Norway. “We think that the uncertainty related to future fuels can be managed by planning for fuel flexibility. And by installing dual-fuel engines, you have more flexibility to use different types of fuels. And it’s a matter of fuel availability. As we have already discussed here today, it will be a long time before we have available other types of fuel that can give any reduction in greenhouse gas emissions. So LNG is one of the few fuels that are available that can give an emission reduction today.”

Holm agreed that propulsion technology flexibility is critical, because “no one really knows exactly what the future fuel is. That’s a question we get a lot: ‘Tell me what’s the future fuel?’ And I think we honestly can’t say. I really don’t have the answer.”

But Holm added that methanol is a leading candidate because it is one of the easiest to start implementing now.

Vancouver’s Waterfront Shipping Co. (WFS), a subsidiary of Methanex Corp., the world’s largest producer and supplier of methanol, currently operates the world’s largest methanol tanker fleet.

As Ayça Yalcin, Methanex’s director of market development, pointed out in a previous BIV story, methanol is a clean-burning low-emission marine fuel that biodegrades rapidly in ocean water.

It also has the lowest carbon content and highest hydrogen content of any liquid fuel and can be produced from various sources, including black liquor from pulp and paper mills. The additional costs of installing methanol systems on ships are roughly one-third those of installing LNG systems.

However, building a fuel supply and infrastructure network for methanol faces a classic chicken-andegg challenge: there will be no major investment in supply or infrastructure if suppliers have no commitment from carriers to convert their ships to methanol, and there will be no major commitment to that conversion from carriers unless there are guarantees of a reliable and widespread supply of methanol.

Sterling said methanol and ammonia are both on Maersk’s candidate list for near-term decarbonization fuels. “We have ships running on methanol today. So the journey is a little shorter on the technical side. Ammonia definitely is also a fuel that is on our candidate list, but it’s a lot further out. And I think that it is important that we acknowledge that there are a lot of challenges related to running a ship on ammonia that have not been solved yet.” Hammer agreed.

She said safety issues connected with the use of ammonia, which is extremely corrosive and toxic, need to be resolved before it can become a mainstream marine cargo transportation fuel.

While the panel members debated fuel alternatives and technologies, they agreed on two key points: action on ship fuel conversion needs to begin now, and the industry cannot rely on the IMO to clean up marine cargo transportation.

That initiative has to come from the industry, governments and shipping customers up and down the global supply chain.

In early June, the governments of Denmark, Norway and the United States, along with the Maersk McKinney Møller Center for Zero Carbon Shipping and the Global Maritime Forum, announced plans to lead a new zero-emission shipping mission.

The mission’s goals include ensuring that by 2030 at least 5% of the global deep-sea fleet will be capable of running on green ammonia, green methanol and other hydrogen-based zero-emission fuels.

A group of leading international shipping organizations led by the World Shipping Council is also calling on the IMO to initiate discussions on instituting “market-based measures” that would lead to carbon-pricing in the shipping industry and close the cost gap between low-sulphur heavy marine oil and low-to-no carbon fuel alternatives.

Maersk is pushing for a US$150-per-tonne carbon tax on marine fuels to close that gap.

Swire Shipping, a multinational shipping services brand operated by the China Navigation Co. (CNC), has also called for a universal greenhouse gas levy in the global marine cargo sector. CNC opened its North American headquarters in Vancouver in

IF WE JUST TRY TO USE THIS AS A COMPLIANCE THING, WHERE WE GO FOR MEETING THE MINIMUM STANDARDS SET OUT BY THE IMO, WE MIGHT LOSE THE GAME ALTOGETHER Jacob Sterling Head of decarbonization, innovation and business development A.P. Møller - Maersk

Aerial shot of the MS Tallink Megastar, the first LNG-powered ship in the fleet of Estonia-based shipping company Tallink. Its dual-fuel engines were built by Finland’s Wärtsilä Corp. •

WÄRTSILÄ CORP.

August 2018.

Sterling said more Maersk customers are now willing to pay a premium to have their goods shipped carbon-neutral.

That appetite, which is rooted in ESG’s growing market value, underscores the willingness in the global cargo supply chain to change and to pay for that change.

Sterling said the shipping industry “cannot depend on the IMO to set the pace for this; we need to go much faster than what the IMO suggests, and what the IMO can reach consensus on. “If we decarbonize too slowly, the whole concept of global trade, where you produce in one end of the world and consume in the other end of the world, might be challenged by consumers in five, 10, 15 years’ time. Because if we just try to use this as a compliance thing, where we go for meeting the minimum standards set out by the IMO, we might lose the game altogether.”