With COP27 on the horizon, the shipping industry is feeling increased pressure to reduce emissions

A four-stage test engine, with four giant pistons, could have the potential to transform the shipping industry and the global supply chains that depend on it.

“We take an internal combustion engine and change it,” Brian Østergaard Sørensen, research and development manager at MAN Energy Solutions, said as he stood in a research lab outside Copenhagen. in Denmark.

MAN Energy Solutions is one of the world’s leading designers of commercial marine engines. At the Copenhagen test site, Sørensen’s team is experimenting with different carbon-neutral and carbon-free fuels to see how effective they can be in generating the immense power needed to move container ships and bulk carriers through the world’s oceans.

The shipping industry is responsible for 3% of all global greenhouse gas emissions, an amount equivalent to what Germany emits each year. But around the world, 99% of ships are currently powered by fossil fuels, such as bunker fuel and marine diesel.

“We actually have to look for ways to rebuild existing ships,” Sørensen said.

The upcoming COP27 gathering in Sharm el-Sheikh, Egypt, which runs from November 6-18, is expected to focus on the decarbonization challenges facing the shipping industry in a much greater way than in the past. . It is expected that the whole sector will be encouraged, pushed and even cajoled to set a more ambitious timetable to decarbonise and set targets to be achieved along the way.

“We are looking at a difficult transition [to cleaner fuels]but there is a will to do it,” Sørensen said. “For us, the reward is that our technology will be future-proof.

Green Fuels Survey

In another part of MAN’s lab, senior research engineer Julia Svensson examines vials containing clear liquids representing some of the green fuels that will be jostling for eventual industry supremacy.

Bio-methanol — which can be synthesized from any large biomass, such as crops — is a strong contender.

« Bio-methanol is booming, and I think that’s where we should be going if we really want to go green, » Svensson said.

Ammonia, which can be somewhat cheaper to produce than methanol, is another contender.

The shipping industry regulator, the International Maritime Organization (IMO), has set a rather disappointing target to halve greenhouse gas emissions by 2050. To achieve the target global warming of 1.5 C of the Paris Agreement, emissions from shipping should be completely eliminated by 2080.

Knowing this, many industry players are calling for greater ambition, driven by suppliers and customers who want to see greener practices throughout supply chains.

Copenhagen-based Maersk, until recently the world’s largest container shipper for the past 25 years, has set itself one of the most ambitious decarbonization targets in the industry. It is targeting net zero emissions by 2040 across all of its operations. To achieve this, it has ordered 19 new large ships powered by carbon-neutral engines and fueled by methanol.

“I think what we need to see now is that the IMO revises that target towards full decarbonisation [by 2050]“said Ingrid Sidenvall Jegou, of the Global Maritime Forum, a non-profit group trying to steer industry players and international regulations towards net zero.

In September, his group co-authored a progress report on efforts to develop new fuels, ships and facilities. The forum’s goal is to make 5% of all transport fuel carbon neutral by 2030.

This date is considered a “tipping point” after which the industry crosses a critical threshold and the adoption of clean technologies becomes easier.

« There will be economies of scale and production costs will come down, like what we’ve seen in renewables more broadly, » Jegou said.

The somewhat pessimistic conclusion of the report, however, was that progress towards this 5% target was only “partly on track”.

The trillion dollar question

While there are now more than 200 pilot projects around the world dedicated to carbon neutrality in shipping, major investments in facilities such as fuel production and storage are badly needed.

The exorbitant total cost of processing, industry-wide, is estimated to be between US$1 trillion and US$1.4 trillion.

Along with uncertainty over targets and what fuel will eventually become the norm, the shipping industry has failed to find a common understanding of how to pay for the transition – in particular, how much to pay on carbon.

Two small Pacific nations, the Marshall Islands and the Solomon Islands, both affected by rising sea levels, have proposed a carbon tax of US$100 a tonne for burning polluting fuels.

The International Chamber of Shipping, an association representing shipping companies, has proposed a carbon tax of a paltry $2 a ton.

A proposal from Japan would see a global carbon tax levied from 2025. It would start at $56 a tonne, with the money reinvested in the shipping industry to help build infrastructure for a zero-carbon future.

Alan McKinnon, professor of logistics at Kuehne Logistics University in Hamburg, Germany, says resistance has come from small countries, like Panama, with an overreliance on shipping and worries about the economic consequences. of a carbon tax.

« They’re obviously concerned that it’s going against their interests, » McKinnon said.

The European Union has decided not to wait for the IMO to make a decision and has announced that from next year ships calling at European ports will have to start contributing to the emissions trading scheme of the bloc, which performs the same function as a carbon tax.

« When I was at the COP [Conference of the Parties] last year in Glasgow a lot of people were saying we really need to get to net zero by 2050,” McKinnon said. “And to achieve that, you have pricing incentives – you need carbon pricing.

Create « green corridors »

In an attempt to bridge disagreements and build momentum, 22 nations came together at the Glasgow conference to sign the Clydebank Declaration. The intention is to create « green corridors » to incentivize ports and shipping companies to build or upgrade their facilities along specific routes where new, greener fuels will be produced and stored.

According to a statement released by The Port.

But while the United States and many European countries have signed the declaration, key maritime nations such as South Korea, China and South Africa have not.

The cost and time required for expensive investments to be recouped remain major hurdles for many developing countries, although some experts say the expected $1 trillion bill is manageable.

« We believe that the premium [for consumers] will be small,” said Bo Cerup-Simonsen of the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping in Copenhagen. The non-profit research and development center has been heavily involved in promoting new green technologies.

“We generally consider an additional cost of less than one percent [on goods that are shipped]“, he said. The challenge, he says, is to have appropriate regulation to allow costs to be spread throughout the supply chain.

Environmental activists have intensely targeted shipping industry practices in the past, particularly for the use of high sulfur fuel and for poor safety practices leading to oil spills. Some proponents have little confidence now that the industry will perform better on climate change mitigation.

« It’s like bringing cats together to get all the nations of the world to agree on something – but we have to agree, » said Roc Sandford of UK-based climate activism group Ocean Rebellion. He pointed out that to achieve a net zero goal, demand for all goods being shipped simply needs to drop.

« A lot of stuff gets shipped all over the world and then sent back, » Sanford said, suggesting global supply chains need to be simplified.

Reduction of the world tanker fleet

He also said that a drastic reduction in fossil fuel production would take much of the world’s tanker fleet out of the equation.

« We need to [eliminate fossil fuel production] very quickly and that would eliminate 40% of shipments,” Sandford said.

Alan McKinnon, the logistics expert, agrees that improving the energy efficiency of shipping operations – from slowing ships down so they use less fuel to loading them more efficiently – is key to reducing the footprint industry carbon.

“After COVID, many businesses [aiming] to improve the resilience of their supply chains are considering shortening their supply chains, and perhaps in the future using less deep-sea container shipping than they currently do,” he said. -he declares.

Efforts by the shipping industry to become greener have come much later than other parts of the transport sector – for example, electric vehicles are becoming commonplace and many jurisdictions have deadlines for ending sales of fossil fuel cars.

While there has been promising progress on the high seas, McKinnon says the industry’s task remains daunting.

« [Ships] can have a lifespan of 30 or 40 years and the rate of vessel replacement is relatively slow. So this transition to low-carbon ships is going to take time. »