Maritime is on track - the technology for low and zero-carbon ships exists.
Now we need to address what this means for port infrastructure and future fuel supply chains. Many shipowners are making bold decisions about their emissions reduction pathways to bring
their operations in line with IMO’s 2030 and 2050 greenhouse gas (GHG) emissions targets. Some are doing so at the behest of their charterers, others simply because they can see the opportunity that the energy transition presents. Our industry transports energy around the world, and countries will not be able to meet their decarbonisation ambitions without us, because clean energy will be produced and consumed in different places. However, shipping does not operate alone. It’s part of a complex and interwoven supply chain that serves society through the delivery of global trade. Within this landscape there are numerous stakeholders, including policymakers, regulators, technology developers, fuel producers, ports shipyards and financial institutions, that must engage in the conversation to ensure that zero-carbon shipping becomes a reality.
The future bunkers network will feature multiple fuels and technologies, each with their own set of limitations and separately engineered to serve a particular sector or trade route. This complex landscape creates challenges both from the shore and ship side.
Significant progress has already been made to develop hydrogen, ammonia and methanol fuelled ships, with battery power propulsion being proven in some short sea applications. Attention around nuclear is increasing. The technology to power vessels using these fuels exists as is evidenced by the number of dual-fuel vessels on order or in service. Retrofitting engines and energy-saving devices (ESDs) are also on the rise. The owners of these vessels are leading the charge and making decisions that will inform international regulations and government policies in the years to come, but ultimately maritime can’t deliver zero- or near zero-emissions shipping on its own. To enable these vessels to switch from fossil to low-carbon fuels as intended, the necessary infrastructure must be put in place. This includes the safe production, storage and transport of these fuels so that they are available at ports, terminals and other bunker centres. Here policymaker participation is vital. Without it, maritime’s efforts to decarbonise will be severely restricted.
Green shipping corridors were almost unheard of two years ago,but now offer a route to integrated industry engagement between government, technology, finance and industry. They are successfully speeding up the testing and use of future fuels and other technology across the value chain. One example is the Silk Alliance, a green cluster focussing on the container trades across Southeast Asia
to China, the Indian subcontinent and the Arabian Peninsula. It’s a partnership of nearly 20 stakeholders spanning shipowners, academia and banks, bunkers and logistics, terminals and shipbuilding, initiated and facilitated by the LR Maritime Decarbonisation Hub. The Silk Alliance is an example of stakeholders across an entire supply chain interacting and connecting on the same challenge and mission. Green shipping corridors such as this one are essential to ensure shore-side infrastructure is developed to enable the switch from fossil fuels to carbon-free alternatives.
Meanwhile, we must forge ahead and bring future fuels to market
as soon as possible. Collaboration across industry has been re- markable and we have seen numerous fuel-specific projects emerge in the last three years. Take the Castor Initiative, a global coalition
focussed on zero emissions vessels, which wants to make ammonia-fuelled deep-sea tankers a reality before the end of the decade. In November LR entered a joined development project to class two ammonia-ready LCO2 carriers for Capital Gas Ship Management, which will be built at Hyundai Mip Dockyard. Demonstrator projects such as these send a clear message that shipping is acting now. Our industry is already navigating the recently introduced IMO Carbon Intensity Indicator and Energy Efficiency Existing Ship Index rating systems, and there is still much work to be done to meet IMO’s 2030 goal to reduce CO2 emissions by 40% compared to 2008 levels.
With this in mind, we must not overlook the opportunities presented by ESDs. Lloyd’s Register data shows that these are a popular choice amongst owners and operators, with 8,785 ESDs either on order or installed. Propellor and rudder technology is especially favoured,
and these technologies combined account for more than 60% of the overall the figure alone. It’s easy to see the appeal as after initial outlay, not only does this technology reduce emissions – IMO states that they can reduce engine fuel consumption by up to 5% – it also reduces costs, which with the projected high costs of low- or zero-emissions fuels is a desirable prospect.
Zero emissions can only be met, however, through new fuels and oth- er forms of zero emissions propulsion. Shipping is playing its part. It is now the shore-side infrastructure where the gaps are most significant and where most progress is required. Our focus in 2024 must be on developing a new fuels supply chain that is fair and equitable for all parties.
* Head of Business Development for Greece, Cyprus and Israel at Lloyd’s Register