Jun 23 | 2021
Asset Owners Tackle Emissions
By Lori Musser
Project owners and cargo buyers don’t want their supply chains to release greenhouse gases and accelerate global warming. Asset owners have the job of tackling emissions all along the freight journey, from the wellhead to the wake, wheel or welcome mat, as the case may be.
Robin Townley is head of special project logistics at A. P. Moller – Maersk. He believes carbon emissions reduction “is the right thing to do, and if you can do it, you should.” Consumers are signaling its importance, and there can be tax and other regulatory benefits. “It’s a societal imperative and a very smart business decision.”
Roger Strevens, vice president of global sustainability with Wallenius Wilhelmsen, lists the two main drivers for the transition towards carbon neutrality as compliance cost reduction and stakeholder demand. He said that these factors should have more clout now as new International Maritime Organization and EU regulatory initiatives are introduced.
Eleanor Kirtley manages North American marine environmental certification programs at Green Marine. She said that the global nature of the shipping industry is its most compelling reason to lower carbon emissions.
“The very stakeholders that own the ship, class it, flag it, load it, crew it – they represent the globe. Then add the end consumers to that group. Each has a vested interest in helping to lower emissions, combat storm events, prevent sea level rise and keep temperature rise below the critical 1.5 degrees Celsius.”
The Time is Now
Carbon-neutral sea voyages are already here. Zero emissions ports are on the horizon. Liquefied natural gas, compressed natural gas and electric transportation are in play. Even construction at the world’s largest project sites is going greener with solar, wind and portable hydrogen fuel cells.
For freight carriers, the problem is no longer if or even when to tackle emissions. The time is now. The problem is how – how to choose and get a fuel, retrofit or build assets to run on greener fuel, benchmark emissions and measure reduction, and bring supply chain partners up to snuff so that successful efforts are compounded.
Vessels need energy-dense fuel and lots of it. William Reinsch, of the Washington, DC-based Center for Strategic and International Studies, made the case for hydrogen: “Compared to other low-carbon storable fuel alternatives (which also include biofuel and ammonia), hydrogen has a large existing market … can be retrofitted into existing ships with relative ease, and has attracted the greatest attention from the industry, with dozens of pilot projects in the U.S. and Europe.”
The International Maritime Organization’s, or IMO’s, goal is to cut CO2 emissions from ships in half by 2050, compared with 2008 levels. Carriers are studying various fuel choices carefully; there will be more than one solution, including a possible reinvention of wind technology, this time with back-up power and vessel superstructure that doesn’t interfere with cargo and cranes.
“There will be a bunch of winners, not just one, to get to scale,” Townley said. The solutions chosen will not be based solely on engineering assets to operate on new fuels. Townley said the hard part will be to ramp up global production and delivery infrastructure for new fuels. For example, hydrogen is classified as a dangerous good and faces significant regulatory bottlenecks related to scale.
Projects Taking Shape
In April 2021, Finnish bulk and project cargo shipping company Meriaura Group announced a project to design “a transport concept that targets 100 percent carbon neutrality … based on hybrid propulsion that combines sustainably produced bio-oil and battery technology.” Jussi Mälkiä, president of Meriaura Group, announced a 2024 launch for this, the “first transportation concept based on renewable energy since the era of large sailing ships.”
Maersk is working on a grain methanol fuel project in the Baltic with plans to launch its first carbon-neutral vessel in 2023. “That will be proof of concept. The new vessel will be on a local loop. We are going to have to prove to the world this can be done on a small regional scale and then use that to scale up,” Townley said to Breakbulk.
Maersk’s offshore supply division already invested in an innovative offshore charging buoy that will serve as a mooring point and a charging station for its offshore fleet. It will be tested on one of Ørsted’s offshore wind farms in 2021. There is great potential – the buoy can charge battery or hybrid-electrical vessels or can supply auxiliary power to larger vessels. They could be used outside ports, limiting in-port congestion while lowering emissions.
Voyage neutrality is typically achieved by using carbon offsets. Strevens said, “Carbon neutrality is probably the best result that can be achieved for the world’s existing fleet of 50,000 vessels. However, we believe that the ultimate target for the industry should be zero emissions … which is an even greater challenge.”
As biofuels, hydrogen and other non-fossil-based ship fuels are developed, their distribution and delivery will become a major obstacle.
“The biggest pole in the tent hasn’t gotten a whole lot of attention yet. There will be an entirely new market segment for engineering, procurement and construction companies,” and the entire project cargo supply chain, in building global distribution, storage and delivery systems for green fuels. “A massive amount of investment is needed, and if we start now, it will take until 2050 to get it right,” Townley said.
Calculating the Carbon
Asset owners have plenty of carbon calculators or sustainability scorecards to help them figure out emissions, but their accuracy, consistency and inclusiveness has been questioned.
“There is consistency in certain aspects. The fuel consumed and the carbon content of the fuel are the main factors. It’s reasonably simple, particularly if you’re just calculating overall footprint,” Kirtley said. However, “coming up with a fair metric for efficiency or intensity does get more complicated, especially between vessel types.”
Townley said the key to accuracy is not a fancy algorithm, it is having reality-based source data. “True, objective data is hard to get to unless you own the asset that is producing it.” Maersk, which operates three fleets (container, offshore and harbor-based tugs) uses the Global Logistics Emissions Council Framework. “Based on that, we have our own system called Emissions Dashboard. It can compare the transport footprint through different modes. After being in beta testing for a few years, and working well for us, we took it to market,” Townley said.
Emissions calculators are a first step. Companies need to look beyond their own carbon footprint, to the full lifecycle of fuel. “For biofuels, green ammonia, bio-alcohol and lignin, we have to look at the land used to produce them. We have to go back to the seed level and how fields are managed and how land would have been used if it didn’t grow fuel, then look at scale production, bunkering and fuel use on board ship,” Townley said.
Strevens added that the full life-cycle perspective is especially important for government “officialdom.” “Until and unless there is success with that, there may be limited uptake of lower carbon fuels,” he said.
In the case of hydrogen as a fuel, Reinsch said, “the combustion of pure hydrogen (or ammonia, for that matter) releases no carbon emissions directly, but the production process of hydrogen can. ‘Gray hydrogen,’ for example, is usually produced from natural gas, which releases CO2 as a byproduct. Without carbon capture and storage, gray hydrogen isn’t a significant improvement over bunker fuel – its emissions just come at a different stage of the fuel’s life cycle.”
On the Same Side
The IMO and other standard-setting bodies will have to figure out how to regulate and verify the origin of newer fuels to ensure that they are truly low or net-zero carbon, Reinsch said.
It is time for “convergence and consolidation of reporting initiatives,” Strevens said. While tools that draw upon typical carbon intensity values for a transport mode and use them in conjunction with standard distances should be in agreement, actual voyages throw a wrench in the works. “For example, the Wallenius Wilhelmsen fleet average carbon intensity for 2020 was 33.58 g CO2/tkm. However, for individual voyages the actual values may range from half that amount to several times that amount.” The differences stem from factors like how close a vessel is to maximum deadweight tonnes, and actual distance traveled.
The IMO shipping emissions goal is a start. Reinsch said: “The shipping industry could play a pioneer role in developing an alternative transportation fuel like hydrogen, which has also attracted interest from the trucking and rail transport sectors.” Absent a single regulatory body to dictate emissions rules across global supply chains, “the best way to promote the adoption of low-carbon fuels beyond the shipping industry is to successfully scale and demonstrate low-carbon fuels within the shipping industry,” he added.
“We can only get to the goal by 2050 if everyone comes along with us. Collaboration between supply chain members is needed,” Townley said, citing the mantra, “If you want to go fast, go alone – if you want to go far, go together.”
It helps if a carrier gains direct control along a green supply chain. For example, Townley said: “We avoid shore power if we can do it ourselves. We’ve redesigned some containers to become batteries. We pull into a port with clean shore power produced by renewables, then take on power for our onboard battery system.”
Transportation assets owners are working toward carbon neutrality, switching to cleaner and renewable fuels, using offsets, and collaborating with supply chain partners.
Decisions on fuels, progress, timing, and emissions goals are complex, varying by asset type and supply chain parameters. Nevertheless, the benefits of going green are becoming more evident. Emissions reductions are no longer considered an extravagance; they are an imperative.
Based in the U.S., Lori Musser is a veteran shipping industry writer.
Image credit: Wallenius Wilhelmsen