DECARBONISATION

For shipowners and operators, the requirement to decarbonise is becoming increasingly urgent, as Søren Meyer, CEO of ZeroNorth, explains

Søren Meyer CEO, ZeroNorth

ACTIONABLE DATA WILL BE CRITICAL

On a wide scale, our industry must successfully implement a plan to decarbonise operations in line with regulations and societal ambitions. To compound the scale of the challenge, the roadmap that owners and operators set for themselves – and the solutions they choose - must be profitable, trustworthy and flexible enough to respond to further upcoming changes.

However, although there are exciting developments in future and low carbon fuels on the horizon, the sector is currently absent of these solutions at a scale that will enable it to significantly reduce emissions.

In short, the need to decarbonise – and to be able to do this profitably – is a historic challenge for a sector used to commodity fuels and a traditional way of operating.

It’s clear that the challenges of cutting emissions will require a combination of clean technologies, alternative zero-carbon fuels and, as is becoming increasingly apparent, a more intelligent use of data and technology.

This is because data and technology can help unlock and underpin more intelligent decision-making; an immediately achievable first step towards realising greater sustainability outcomes that can be taken today.

Taking a step back for a moment, it’s important to reflect on the huge cost increases that future fuels will bring to ship operations. Given the cost increases of these fuels, the only way that they can be realistically used is by reducing fuel consumption. In this, digital technologies have a key role to play.

ENABLING THE FUTURE FUELS TRANSITION

Shipping now has access to a large well of data, spanning vessel performance, weather, market rates, fuel prices and more. This data is a huge asset for decision-making; if it can be turned into actions that transparently reflect CO2 and dollar upsides.

But while the shipping industry’s data resource may be vast, it is widely underutilised and the ability to unlock efficiencies,

Weather routing functionality

enhance vessel performance, increase earnings and, vitally, reduce CO2 emissions, hasn’t been harnessed to its full potential.

However, and particularly when it comes to decarbonisation, this is changing. Part of this is thanks to the flexibility inherent in digital technologies: unlike other cost or fuel efficiency solutions, there is little-to-no capex barrier or vessel downtime for the implementation of digital solutions.

Without a requirement for hardware installation, and at a low ongoing cost point, advanced digital solutions can pay themselves back extraordinarily quickly. By overcoming this cost factor – for many owners a prevailing concern right now – digital technologies can unlock fuel savings and increased earnings of the same magnitude as some clean technologies. This is especially notable with clean technologies often costing hundreds of thousands or millions of dollars and weeks of vessel downtime for retrofits.

This cost saving can be used in many ways; including investment in research and development, future fuels and efficiency solutions. Digital solutions therefore make it easier for the industry to transition to a lowcarbon future faster.

A case in point, we must look at the potential efficiency gains available to us achieve via integrated weather routing. As ZeroNorth recently announced, we see that technology has evolved to the point where prioritising safety can also be aligned with minimising emissions and maximising revenue, by taking advantage of the weather on all routes.

This will have a positive impact on decarbonisation, and it’s all because technology has evolved to the point where, today, the benefits of weather routing, voyage planning and vessel optimisation no longer need to be siloed from each other.

COLLABORATION AND BREAKING DOWN SILOS

It’s also important to recognise that collaboration, partnerships and the breaking down of settled silos is the other key trend impacting, and being impacted by, digital uptake.

As a sector, we must work together and create tools that support collaboration, even with competitors, to play our part and create a pathway for the future. This mantra is exactly why, across 2021, ZeroNorth has been creating working groups that incorporate a representative slice of the organisations driving shipping’s decarbonisation trends.

The purpose of these working groups is to combine knowledge and solve challenges that are hampering the decarbonisation process. For example, in summer 2021 we announced that one of our working groups had created a benchmark for assessing fuel table model accuracy, allowing owners and operators to optimise their ships based on quality fuel consumption data.

It’s obvious to see why this could be an important and impactful step on the path to decarbonisation. After all, if we are going to improve fuel and emissions performance, we need to be able to do that from an accurate baseline. More importantly, that baseline must be an accepted standard across the industry, so that we can unilaterally compare outcomes and further incentivise the industry to offer better solutions.

This mantra of collaboration has also underpinned the development of our voyage optimisation software, Optimise, in which we have built a complimentary ecosystem of data providers that turn data into actions, generating tangible revenue upsides and emissions savings.

We believe that to drive real change, we must align decisions around both profit and planet. Data and digital technologies will undoubtedly play a huge role in maritime decarbonisation. The time to do this is now, and decisions we take today will generate returns in the immediate term and also set us up for success in the future.

Collaboration, a greater focus on using the data assets already available to us and more support for solutions that enable better commercial decision-making, will be critical to unlocking a new era of shipping.

Julian Clark, senior partner at Ince, takes an in-depth look at the role of blockchain in sustainable shipping

Julian Clark Global Senior Partner, Ince

FORGING A

SMARTER FUTURE

Over the past few years, there has been a lot of industry buzz around blockchain. Although there is a lot of hype and some misunderstanding around its capabilities, the technology has legitimate potential to play a significant role in advancing shipping operations, especially against the backdrop of a fast-evolving maritime fuel regulation landscape.

Following last year’s IMO 2020 regulations, as well as the recently unveiled Carbon Intensity Indicator (CII) and Energy Efficiency Existing Ship Index (EEXI) decisions, shipping is facing a major turning point to change its energy use and shift to higher-grade fuels.

Currently, vessels contribute approximately 3% to the total volume of global pollution and IMO 2020 regulations – which are projected to lower sulphur emissions by over 80% – aim to reduce this figure while increasing the sustainability of shipping operations worldwide and improving the environmental credentials of seaborn trade at a global scale.

New maritime fuel standards have been – and will continue to be – disruptive to global supply chains. Stricter compliance will also become an inevitable consequence of the increasing regulatory burden and shipping companies will look for ways to improve the processes they have in place to document compliance. But technology generally – and blockchain specifically – can calm the waves of disruption and help those involved in the maritime ecosystem move confidently forward.

NAVIGATING THE HIGH-COST FUTURE FUEL ENVIRONMENT

Blockchain has the ability to facilitate how shipping addresses its energy needs and how maritime companies comply with existing and upcoming environmental regulation regarding maritime fuels, sulphur levels and carbon emissions, among other issues.

The reality is that switching to lowersulphur fuel options also means using more expensive fuels, many of which are still in

their infancy or lack existing infrastructure to quickly scale. In fact, upcoming regulation is likely to lead to the maritime industry – which currently is reported to use anything between 3.5 and upwards of five million barrels of fuel per day – to experience a similar supply and price crunch to the one that US truckers faced when Ultra Low Sulphur Diesel regulations first came into force just over a decade ago. Under IMO 2020, shippers could pay approximately $20 more per barrel depending on the specific fuel used.

Of course, higher fuel costs mean higher overall shipping costs. The Wall Street Journal estimates that this regulation will add upwards of $50bn in new fuel costs over the next three-to-four years. And that estimate does not include enforcement challenges, market inefficiencies due to jurisdictional discrepancies and even limited refining capacities that will ultimately create a bottleneck.

In this situation, logistics companies face a tough choice: they can either absorb these higher costs leading to the potential shrinking of their bottom lines or pass them on to consumers in the form of higher prices, which is extremely commercially risky and disadvantageous.

Fortunately, there is a third option, which involves adopting blockchain and the latest tracking technology to modernise and streamline supply chains by removing many of the expensive friction points – and thereby much of the cost – required in both compliance enforcement and certification.

Significantly, shipowners and operators can use blockchain to navigate the changing marine fuels landscape, mitigate the risk that comes from fragmentation in fuel supplies as more fuel is blended to meet compliance requirements and ensure that they comply with international maritime emissions regulations and standards.

This is because blockchain-based systems improve the reliability of tracking and tracing fuel origins and quality by recording information on a distributed ledger and collecting data throughout the bunker fuel supply chain.

BunkerTrace is an example of a recently established initiative providing marine fuel traceability, which adds synthetic DNA tags to bunkers to track them as they move through the supply chain. Combined with a blockchain ledger, this creates an immutable record of bunker supply, making it possible to verify the source and quality of bunkers before they are burned in a ship’s engine.

Such initiatives used strategically as part of broader fuel procurement and compliance strategies will prevent costly quality disputes, reduce risk of engine damage and provide clear advantages in ensuring compliance with increasing sanctions regulatory requirements.

TRACEABILITY AND ACCOUNTABILITY

In any supply chain, the number of human touchpoints before a shipment arrives at its final destination is quite substantial, and this is where blockchain can have a significant impact and deliver considerable efficiencies along the process. To illustrate this point further, a simple piece of fruit grown in South America that is shipped to Europe must be picked and loaded into trucks, weighed at warehouses and stacked in shipping containers, all before it reaches its port of destination and is inspected, carted,

trucked and stacked for consumers. Every point of contact carries a cost and a level of risk of something going awry, but blockchain technology can reduce and even eliminate these costs and delays.

Blockchain’s decentralised digital ledger creates a system where all transactions are recorded and timestamped in an immutable environment. Nothing on the blockchain can be changed retroactively, so anything that companies see and access is verified to be true. This increases accountability, which, in turn, lessens the instances of fraud and theft.

Additionally, a more efficient supply chain is a more profitable one, as fewer resources are tied up in figuring out where and when things went wrong. A significant cause of legal cost is in the need to verify data. This can largely be eliminated by appropriate use of blockchain technology.

There are many other areas within shipping where the sustainability of operations can be greatly improved, and the integration of blockchain technology has the potential to have a transformative environmental impact. Crucially, blockchain can help to reduce the volume of empty shipments, which is considerably higher than most people – outside the industry and within – would think.

Typically done to reposition an asset – getting a truck or container in the right place for another shipment, for example – or simply due to the lack of a shipment in the opposite direction, moving empty containers around the globe is both financially costly and environmentally unfriendly.

Using blockchain for smarter asset management and pooling, better asset visibility and smarter backhaul management, can therefore both reduce unnecessary costs and help to decarbonise shipping operations.

Believe it or not, many of today’s shippers are still using pen and paper to track the timings when goods are placed on ships or arrive in ports. This system is incredibly inefficient and lacks transferability and accountability, which leads to widespread theft, graft, and loss. The National Cargo Security Council estimates that loss and theft cost the shipping industry more than $50bn annually.

By allowing companies along the supply chain to verify when goods arrive or are shipped out, blockchain can reduce the industry’s dependency on unreliable written documents that can easily be lost or altered.

Shipping companies currently lack visibility of the location of containers at every given point in time. In fact, shipments often sit at or near ports or in warehouses for much longer than necessary, with many of these shipments accruing detention fees for these overstays - a hefty bill for goods that are just sitting idle.

Blockchain, with its immutable digital ledger, can drastically increase efficiency and reduce container detention times and costs by adding crucial visibility to provide shippers with information about the location of shipments at any point in time.

New tracking technology and the blockchain do not have the capacity to cure all the shipping world’s ills, but they have an enormous potential to provide forward-looking shipping companies that are keen to adopt the latest technology with a sharp commercial advantage over those which are not. The sustainable future of shipping will be championed by those companies that can identify and take advantage of opportunities to modernise before it is too late.

“Blockchain, with its immutable digital ledger, can drastically increase efficiency and reduce container detention times and costs by adding crucial visibility”

The maritime industry has been coming up with some innovative technological solutions to combat current challenges facing the industry – not least the issue of climate change

HARNESSING HIGH TECH

With cargo owners increasingly turning their attention to supply chain emissions, Klaveness’ digital arm has partnered with specialists at ZeroLab to make emissions from seaborne transportation readily available to charterers by launching an emissions monitoring tool.

The emissions monitoring tool in CargoValue enables cargo owners to view total emissions by commodity, volume and ship type. The tool, previously piloted with a major charterer in the aluminum industry, enables cargo owners to quickly assess how their seaborne supply chain emissions align within the Sea Cargo Charter trajectory – a global framework for aligning chartering activities with responsible environmental behaviour.

“We base the calculations on actual data whenever possible, but also rely on estimates when that is necessary. Our longterm view is that actual data will become the gold standard and we have built the product with that in mind”, says Martin Prokosch, head of ZeroLab.

CargoValue, Klaveness Digital’s digital twin solution for seaborne supply chains, makes disclosure of Scope 3 emissions much easier and also empowers cargo owners to set and monitor targets for emission reductions.

“CargoValue is all about empowering the customer to turn data into insight and improved efficiency. We hope that the new emissions feature will be used beyond disclosure to also aid in identifying operational initiatives that reduce emissions,” states Aleksander Stensby, managing director of Klaveness Digital.

“Emission monitoring is the first step in reducing seaborne supply chain emissions, and we are excited to develop this product together with CargoValue,” adds Prokosch. “Annual emissions from shipping total close to 1 billion tonnes of CO2. We hope the insight provided in Emissions by CargoValue will empower cargo owners to collaborate with their shipping logistics partners to reduce carbon inefficiency in the seaborne supply chain.”

CALL TO ACTION

The shipping industry is in danger of losing out on a huge opportunity to make impactful and immediate gains in tackling the climate emergency, by only focusing on a narrow set of measures and having a preoccupation with new fuels, according to a new group of leading maritime technology companies and other prominent maritime organisations.

The group – whose initial participants include Airseas, Houlder, NAPA, Norsepower, and I-Tech – has called for the industry, including the International Maritime Organization and EU, to promote more investment in energy efficiency and renewable propulsion technologies so the maritime industry does not miss the huge opportunity to save time and money.

Currently, regulations encourage the industry to do two things; to de-rate engines so vessels are forced to slow down and save fuel, and to gradually switch to low- and zero-carbon fuels, such as green hydrogen, methanol ammonia or biofuels.

However, given the scale and urgency of the climate emergency, the group argues that regulations risk the sector inadvertently ignoring the huge range of innovative efficiency and renewable propulsion technologies already delivering significant fuel and emissions savings to the commercial fleet, including, but not limited to, wind propulsion, air lubrication, battery energy storage, hull coating technology, hydrodynamic energy saving devices including propeller devices, and voyage optimisation software.

Rupert Hare, chief executive of Houlder comments: “The shipping industry needs both efficiency technologies and future fuels – yet there is a creeping sentiment that has seen fuels being prioritised. Neither provides the silver bullet for the existing fleet or the vessels of the future. Critically, future fuels will be less energy-dense than current fuels, so ships will need more fuel to meet the same performance goals.

“Given that every drop of new fuel will be essential, energy efficiency and renewable propulsion technologies not only can bridge this gap, but could mean the difference between success and survival. The best part is that these technologies complement each other, and alternative fuels. Each vessel has its own combination of technologies to drastically reduce its carbon footprint.”

Vincent Bernatets, chief executive of Airseas, adds: “The shipping industry is tackling the climate emergency with a growing sense of urgency and optimism – even as it struggles with the disruptions of a global pandemic. However, energy and optimism need to translate into action. Action now means embracing the full range of innovative tools that are here, commercially ready, and deployable right now.

“We can’t let the development of new fuels become an excuse for inertia. Immediate improvements and the immediate implementation of such available innovative tools are crucial – particularly as the current fleet and ships in the builder’s yard now will be on the water for decades to come. Our environment can’t sustain a ‘wait and see’ strategy. The damage that we are doing is cumulative and irreversible and we all share a responsibility to take action.”

The group is calling for all shipping stakeholders and international authorities to expand their focus. Long-term innovation, research and development and the development of alternative fuels are key to decarbonising the maritime sector.

In addition, the group says, shipping needs to integrate the available efficiency and renewable propulsion technologies into their roadmap immediately with the following goals: » to ensure a move to address the environmental challenges right away » to provide the opportunity to immediately drop emissions and fuel consumption while alternative fuels continue to scale up » to provide the current fleet with an opportunity to keep pace with the rapidly accelerating environmental objectives coming from regulators, the market and the end consumer.

AUTONOMOUS SHIPS

One Sea’s recent white paper outlines the significant contribution autonomous ship technology can make to improving maritime safety and highlights the urgent need for a revised regulatory framework.

One Sea, the high-profile industry alliance that brings together leading exponents of autonomous ship technology, has released the white paper focusing on the relationship between ship safety and autonomous technology.

The paper examines the safety advances achieved by and expected from autonomous ship technology, with the aim of driving the consultative process forward towards a revised set of maritime regulations.

It considers today’s safety framework, cybersecurity, views from shipowners and operators, consequences for labour and insurance, and the classification implications for varying levels of autonomy, before offering a proposal for next steps by the industry.

Eero Lehtovaara, chairman of One Sea, comments: “Not only can autonomous ships greatly contribute to increasing productivity, bolstering sustainability and improving working conditions at sea; direct and powerful contributions to enhancing maritime safety have also been identified.

“Technology advances, however, are dependent on regulatory frameworks. As a group of technology pioneers with some of the world’s most distinguished marine automation technology innovators and enables, One Sea has considerable knowledge and expertise to share as new rules and regulations are developed.”

The need to develop harmonised international safety rules covering autonomous ships is now pressing, the paper goes on to argue. As a priority, One Sea seeks to engage regulators, insurers, representatives of maritime labour, training establishments, flag administrations and classification societies in the dialogue that to shape the future of autonomous shipping to the satisfaction of all.

One Sea senior ecosystem lead, Päivi Haikkola, comments: “Our aim at One Sea is to assist in the development of safe autonomous systems in global shipping that could lead towards an effective operational maritime ecosystem by 2025. Collaboration between all stakeholders in the field is essential to address the challenges of digitalisation and the development of autonomous systems.

PwrSwäp uses swappable batteries to deliver energy when and where it is needed

CLEAN AGREEMENT

Kotug CEO Ard-Jan Kooren (L) and Brent Perry

Kotug International and Shift Clean Energy have announced the formation of a partnership to use Shift’s new PwrSwäp clean energy service – which uses swappable batteries on a pay-as-you-go basis – on Kotug’s E-Pusher vessels.

This unique combination supports the maritime industry in meeting their environmental, social and governance (ESG) objectives by delivering zero emission shipping and logistics services.

PwrSwäp uses swappable batteries to deliver energy when and where it is needed, delivering 100% uptime, eliminating carbon and minimising maintenance.

Kotug offers a range of modular and scalable electric pusher tugs, the E-Pusher Series, powered by swappable energy containers. The innovative design of the E-Pusher has a draft that is 30% less than conventional pusher tug designs. Due to the modular design, the E-Pusher offers a 50% faster delivery time and allows a range of vessels to suit the needs of any waterway.

For smart operations, Kotug will use its advanced dispatching, Kotug OptiPort route and reporting tool. An automated dispatching system based on historical and real-time information will bridge port and terminal information with ship operations.

Shift chief executive Brent Perry says: “The message of COP26 is clear – we have to make changes now, with no time to waste. Shipping accounts for significant greenhouse gas emissions, contributing to climate change, as well as particulates that are unhealthy for communities living near ports and inland waterways.

“PwrSwäp and E-Pusher bring zero emissions solutions today.”

GREEN REVOLUTION

TotalEnergies and Columbia Shipmanagement have signed a Memorandum of Understanding (MoU) to explore various collaborative opportunities to foster energy transition, especially in transportation, with a focus on shipping.

TotalEnergies will work closely with CSM, a world-leading provider of ship management and maritime services, to accelerate the process of a “green revolution” in shipping. This will be achieved by utilising CSM’s decades

of experience in the maritime sector and TotalEnergies’ experience in cutting-edge green technologies in the energy industry.

The parties are developing in partnership a lube oil monitoring, optimisation and supply platform utilising the existing capabilities of CSM’s Performance Optimisation Control Room. These developments are aimed at bringing value to final customers.

In addition, CSM and TotalEnergies are committed to work on increasing synergies in sustainability and climate innovative technologies.

They will also designate existing resources towards development into alternative propulsion systems and marine fuel systems, as well as environmentally friendly waste management services.

SHIP DESIGN INITIATIVE

Deltamarin and GTT have received Approval in Principle from the American Bureau of Shipping (ABS) for the LNG fuelled Aframax tanker design.

The new Aframax tanker design provides increased autonomy while also reducing carbon emissions, providing greener and more efficient solutions for the industry.

The vessel will meet the current and future environmental targets by introducing a well-studied and genuinely clean-fuel technology ship, incorporating advanced GTT Membrane-type LNG tanks and Deltamarin’s expertise in developing fit for purpose vessels.

In close co-operation with GTT, Deltamarin studied various arrangements to find the optimised size and placement for the liquefied natural gas (LNG) containment system on Aframax.

Energy efficiency of the vessel was studied with the latest simulation tools together with a holistic approach, providing not only a vessel using LNG as fuel, but also the best available efficiency with low emissions in this vessel size class.

The approval from ABS certifies that the onboard integration of the membrane fuel tank solution is technically feasible for an LNG-fuelled tanker and that it complies with all safety regulations.

The new design provides a solution that complies with environmental regulations adopted by the International Maritime Organization (IMO) until 2030.

Compared with a conventional oilfueled tanker, this new LNG-fuelled tanker design reduces CO2 emissions by at least 20%. It also offers increased autonomy without reducing the cargo volume.

The development that has been carried out in close co-operation between GTT and Deltamarin is the third of a vessel type that has been designed with a holistic approach to overall efficiency and optimised for certain sea routes while considering hull form, propulsion, LNG containment system and power plant configuration.