4 minute read
UK hydrogen off -take
LNG challenged
The World Bank has made a submission to MEPC77 stating LNG is likely to play a limited role in shipping’s decarbonisation, and countries should avoid new public policy that supports LNG as a bunker fuel, reconsider existing policy support and continue to regulate methane emissions.
Amazon, Ikea, Michelin Unilever and other consumer companies recently announced that they do not consider LNG a suitable choice in their pledge to switch all of their ocean freight to vessels powered by zero-carbon fuels by 2040.
But, as industry group SEA-LNG points out, all zeroemission synthetic fuels being discussed for deep-sea shipping – synthetic LNG, ammonia, and methanol, etc – come from the same place. They are all made from hydrogen derived via electrolysis. In order for these fuels to be truly zero-emissions the electricity used in electrolysis needs to be produced from renewables, such as solar and wind, and this presents a massive scaling challenge.
Bulk LNG infrastructure for liquefaction and regasification is already present in 60 countries; approximately half of which could be classified as developing, including China, India, Brazil, Mexico, Indonesia and Thailand. And if a carbon levy is imposed on all fossil bunker fuels, it would favour the use of LNG because of its lower GHG emissions.
Challenging but not impossible
Some States have already proposed absolute zero GHG emission targets rather than net zero ones. If successful, this could determine whether a lifecycle approach is taken to carbon measurements or just emissions at stack are considered, which would in turn impact shipping’s R&D priorities.
The ICS has prepared an analysis of over 260 projects that could be targeted by the R&D Fund, including an assessment of their urgency, impact and a broad estimate of cost. These projects address the use of new fuels by different types of ships as well as batteries, electrification and carbon capture and storage.
There will need to be significant numbers of zero-carbon vessels entering service by the end of the decade to achieve ICS’ 2050 goal. The views of Chris Bell, Senior Consultant, at marine design and clean-tech consultancy Houlder, reflect the optimism that exists within the industry for this. “While it may be challenging, it is certainly not impossible.” The proposed R&D Fund is one way of accelerating the investment needed and looks like a realistic prospect for the industry, he says, but he warns: “As other sectors decarbonise, the shipping industry, alongside aviation, is going to start representing a much higher proportion of total global emissions and is, therefore, unlikely to continue to go as unnoticed as it has done to date.”
INTERTANKO says shipowners are positively engaged and will invest in and be actively involved in testing solutions offered, but Technical Director Dragos Rauta notes: “Shipping companies are not technology designers or fuel manufacturers.” They are the “demand” side. To reach targets, the development of sustainable solutions needs to be prioritised ASAP and sustainable business cases demonstrated. He believes that research should initially be concentrated on solutions that are realistic in the short term.
Concerns have been raised by some companies that have already invested significantly to develop decarbonisation solutions at their own risk, says Charles Haskell, Decarbonisation Programme Manager at Lloyd’s Register. He says there is an urgent need for the IMO to commit to a regulatory framework that de-risks investment in R&D. “The IMO needs to get the regulatory framework for ships and shipping right, but equally governments need to ensure that energy policy reflects the need to secure green energy for use by domestic and international shipping. Without this there is a risk that decarbonisation in shipping becomes a constraint on economic prosperity and development.”
Benchmarking performance
The performance of energy majors has been evaluated ahead of COP26. A first benchmarking has been completed for 100 of the world’s biggest oil and gas firms against the 1.5°C scenario - the most ambitious emissions reduction plan proposed by the Paris Agreement. The assessment, undertaken by the World Benchmarking Alliance (WBA) and partners CDP and ADEME, found that only 13 companies have low carbon transition plans that extend at least 20 years into the future. Only 12 publish information on low-carbon capital expenditure investment plans to 2024. The conclusion: “The oil and gas sector is not accepting its share of responsibility for global emissions.”
WBA’s 2022 benchmarking will assess 90 shipping companies on their low carbon transition plans, investment in R&D for low carbon technology and investment in low carbon business activities. The analysis will be released next year in the lead up to COP27.
8 Alok Sharma,
President of COP26
8 Chris Bell, Senior
