Shipping Decarbonization Weekly Insights -- How shipping moves ahead to run on zero-carbon fuels

2022-10-17 10:42By： Breakwave Advisors

Countries should work harder to develop renewable energy interconnections that allow multiple countries to share greater production capacity and build stronger markets. That's according to a new report from a new group that aims to reshape major charter markets and accelerate the development of green fuels and technologies. This is one of the key recommendations that could impact shipping markets.

The number of renewable hydrogen demonstration projects - including derived fuels such as ammonia and their potential use in shipping - should be increased and supported through targeted technical and financial assistance. The report - authored by the International Energy Agency, the International Renewable Energy Agency, and high-level climate experts from the UN - recommends greater collaboration to ensure sustainable technologies and practices are attractive and accessible by 2030. The Breakthrough Agenda was signed by 45 countries last year at the COP26 climate conference in Glasgow to drive emissions reductions in energy, hydrogen, road transport, steel, and agriculture.

Alliances for Decarbonization

Maersk and partners agree to develop methanol bunkering logistics in Singapore: Mitsui & Co. Ltd, Mitsui & Co. Energy Trading Singapore Pte. Ltd (METS), Maersk Oil Trading, part of A.P Moller - Maersk, and the American Bureau of Shipping (ABS) have agreed to jointly conduct a detailed feasibility study on the logistics of the methanol bunker in Singapore. The participants intend to study the bunker vessel design, safe operating procedures, fuel storage, and legal considerations by leveraging both Maersk Oil Trading's and Mitsui Group's presence in the Singapore marine fuel market. ABS for its part will support the study with an assessment of operational risks. The project aims to conduct an actual ship-to-ship bunkering operation on a vessel in the first half of 2023. This joint project is in line with the International Maritime Organization’s (IMO) original strategy to halve greenhouse gas emissions in the shipping industry by 2050 compared to 2008.

MOL Joins Blue Visby Consortium to cut ship emissions using digital tech: Japanese shipping major Mitsui O.S.K. Lines (MOL) has become a member of the Blue Visby Consortium which aims to reduce greenhouse gas (GHG) emissions from vessels by developing a digital technology-based platform.

Led by Finnish maritime software company NAPA, and UK-based law firm Stephenson Harwood, the consortium comprises over 15 organizations from industry, government, academia, and NGOs, NPOs. The consortium has been developing a solution, Blue Visby, that aims to optimize and distribute arrival times of groups of vessels heading for the same destination port. The optimal target arrival time is provided for each vessel while maintaining the scheduled arrival order, by analyzing the performance of each vessel, conditions such as congestion at the destination, and weather conditions. The consortium also aims to reduce CO2 emissions by recommending the optimum sailing speed of each vessel for maximum efficiency.

Port of Long Beach joins hydrogen alliance: The port has become a member of the Alliance for Renewable Clean Hydrogen Energy Systems aimed to capture a portion of Federal funding to develop a renewable hydrogen market in California. The partnership was celebrated Thursday during a launch event at the Port Administration Building and attended by port, city, state, and labour organization officials.

PSA joins The Silk Alliance to help drive maritime decarbonization: Singapore-based port operator PSA Corporation has joined The Silk Alliance, a cross supply-chain maritime partnership dedicated to the development of a fleet-specific fuel transition strategy for containerships operating in Singapore and the wider Asia region. The alliance was launched earlier this year by Lloyd’s Register (LR) Maritime Decarbonisation Hub, a joint initiative between LR Group and Foundation, in an effort to develop a green corridor cluster starting with intra-Asia container trade.

Stena Bulk, and Alfa Laval join the world’s 1st project to demonstrate end-to-end shipboard carbon capture: The Global Centre for Maritime Decarbonization (GCMD), Oil and Gas Climate Initiative (OGCI), Stena Bulk, and Alfa Laval have launched a joint project to investigate the on-board capture, storage and off-loading of carbon dioxide (CO2). During a two-year-long project, divided into three stages, a seven-member consortium will test a carbon capture unit onboard a Stena Bulk MR tanker to assess the operational challenges on a ship at sea and identify potential cost reduction measures for future commercial applications. Members of the consortium also include the American Bureau of Shipping, Deltamarin, and TNO. The project is named Realising Maritime Carbon Capture to demonstrate the Ability to Lower Emissions (ReMarCCAbLE), and it has been described as the world’s first project aimed at demonstrating end-to-end shipboard carbon capture at scale.

Sumitomo and LOTTE to jointly pursue hydrogen and ammonia projects: Sumitomo and LOTTE Chemical have signed a memorandum of understanding (MoU) to jointly look into a wide range of business development opportunities related to hydrogen and ammonia. This includes joint investments in hydrogen and ammonia production projects in Australia, Chile, and other regions and the establishment of value chains in Japan and Korea as well as the development of ammonia storage terminals in Japan and Korea. Commercialization of new hydrogen and ammonia-related technologies and their deployment in the Japanese and Korean markets and collaboration in the carbon capture, utilization and storage (CCUS) are also included in the MoU.

Industry Actions

KBR gets to work on a blue ammonia project in the US: U.S. engineering firm KBR has been awarded a technology contract for a low-carbon blue ammonia project in the United States, which is being developed by Dutch hydrogen products manufacturer and distributor OCI NV. KBR has been selected by EPC contractor Tecnimont S.p.A. to provide the technology license, basic engineering, proprietary equipment, and catalyst for the 1.1 million ton per year blue ammonia plant. The project, which is scheduled for completion by 2025, is designed to transition from blue to green ammonia production once green hydrogen becomes more widely available.

Wärtsilä to help Capital Gas cut GHG emissions from its LNG carriers: The Finnish technology group Wärtsilä has partnered up Capital Gas Ship Management Corp. to develop a new Fleet Decarbonization Program aimed at boosting the efficiency of the company’s LNG carrier fleet. The agreement was signed in June 2022 and will be applied to a fleet of six 174,000 cbm LNG carriers within the Capital Gas management portfolio. To comply with the International Maritime Organization’s (IMO) upcoming Energy Efficiency for Existing Ships Index (EEXI) and CII protocols, fleet operators are faced with the complex task of selecting the optimal solution. Therefore, the program will provide a detailed Carbon Intensity Indicator (CII) compliancy analysis of the vessels, predicting the fleet’s status in reference to the 2030 targets.

Höegh Autoliners to run 5pct of its deep-sea operations on green ammonia or methanol by 2030: Norwegian RoRo shipping company Höegh Autoliners has committed to using either green ammonia or green methanol in at least 5 % of its deep sea operations by 2030, the company announced.

The plan was revealed as the company joins the First Movers Coalition (FMC), which targets hard-to-abate sectors including aluminium, aviation, chemicals, concrete, shipping, steel, and trucking, which are responsible for 30% of global emissions. The company also sees bright growth prospects for the utilization of biofuels on its ships.

Next Generation of Vessels

Converting boxships to methanol & ammonia is feasible and cost-effective, report says: Converting containership vessels to alternative fuels is technically and economically feasible, Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping said citing findings of a new report.

As the industry moves to decarbonize its fleet, numerous questions remain to be answered on the best pathways for shipowners given the uncertainty in relation to the future fuel landscape.

The report takes a deep dive into the technical, environmental, and techno-economic impacts of preparing container ships for conversion to green fuels to de-risk investment decisions and provide shipowners with answers on what converting boxships to ammonia or methanol would entail.

DSME, ABS chart decarbonization path for ship designs: American Burea of Shipping (ABS) and South Korea’s shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) have formed a joint development project to create a decarbonization strategy for DSME’s LNG carrier designs.

Signed at Gastech, the project will see ABS and DSME investigate carbon emission performance of ships in various segments. Specialists from ABS’ Simulation Center in Singapore will then simulate the performance of a range of decarbonization technologies. The outcomes of the JDP will allow DSME to compare and select the best decarbonization options for each specific ship segment.

Maersk books six more methanol-fuelled boxships at HHI: The six vessels will be built by South Korean shipbuilder Hyundai Heavy Industries (HHI) and have a nominal capacity of approx. 17,000 TEU. They come with dual-fuel engines able to operate on green methanol which is expected to save about 800,000 tons of CO2 emissions annually. The six 17,000 TEU vessels are all to be delivered in 2025 and will sail under the flag of Denmark.

BV grants AiP to DSME ammonia-fuelled very large ammonia carrier: The vessel design is 230 m in length, 36.6 m wide, and 22.5 m tall and will have four prismatic-type cargo tanks with a combined carrying capacity of 86,000 cu m. Ammonia has the potential to be a zero-carbon fuel in the maritime industry. Despite the challenges, some 71 vessels on order were noted as ammonia-ready in a recent Clarksons Research study. LNG remains the leader in alternative fuels for vessels on order, followed by battery/hybrid, albeit for smaller vessels.

MOL’s wind-assisted bulk carrier enters service: Mitsui OSK Lines (MOL)’s bulk carrier equipped with a hard sail wind power propulsion system has officially started operation following a handover ceremony at Oshima Shipbuilding. The 98,700 dwt bulker, named Shofu Maru, is the first wind-assisted newbuild for the Japanese owner that sports a telescoping hard sail developed in-house in collaboration with compatriot shipbuilder Oshima under the Wind Challenger project. The additional propulsion power from wind is expected to reduce greenhouse gas (GHG) emissions by about 5% on a Japan-Australia voyage and about 8% on a Japan-North America West Coast voyage, compared to a conventional vessel of the same type, and contribute to curbing GHG emissions during fuel transportation, MOL said in a statement.

PTT, AET to build two zero-emission Aframaxes: Thai state-owned oil and gas company PTT and AET, the petroleum arm of MISC, have signed a Memorandum of Understanding (MOU) for the development and construction of two zero-emission Aframaxes to be powered by green ammonia. Under the agreement, AET will select a suitable shipyard, and the two zero-emission dual-fuel tankers are scheduled to be delivered to PTT for long-term charters in Q4 2025 and Q1 2026 respectively. As explained, the MoU is expected to provide the much-needed boost to create a green ammonia corridor in Southeast Asia.

Ferries

Concept of the world’s first large-scale hydrogen-powered catamaran unveiled: Sweden’s ferry company Gotland Company (Gotlandsbolaget) has unveiled the concept of Gotland Hydrocat, the world’s first large-scale, high-speed catamaran vessel powered by fossil-free hydrogen. The vessel is the second vessel in Gotlandsbolaget’s Horizon series. The Horizon series is based on high-speed passenger and cargo vessels and was launched as a concept model in 2021 with the Gotland Horizon at the forefront. The Gotland Horizon marked Sweden’s first project for large-scale, hydrogen-powered transport of passengers and cargo by sea.

Incat, ABB to build lightweight hybrid-electric ferry: Australian manufacturer of high-speed catamaran ferries Incat Tasmania has teamed up with propulsion expert ABB on exploring the construction of an electric ferry with hybrid-electric propulsion which could transition to battery power as shore charging becomes available. The two companies have signed a letter of intent (LoI) that provides the framework for ABB to supply zero-emission power and propulsion solutions and evaluate a future commercial arrangement for the 148-meter-long ferry and similar vessels.

Fratelli Cosulich orders ammonia bunker tanker in China: Fratelli Cosulich Bunkers Singapore, part of Italian maritime transportation group Fratelli Cosulich, and Chinese shipyard Nantong CIMC Sinopacific Offshore & Engineering have signed a memorandum of understanding (MOU) for the construction of an ammonia bunker tanker. With this MOU, happening less than one year after the start of the joint development project (JDP) with RINA and SeaTech Solutions International (S) Pte Ltd), Fratelli Cosulich said it shows its intention to take further steps towards green shipping.

First all-electric vessel in Singapore port to use Shift Clean Energy tech: Canadian energy storage solutions provider Shift Clean Energy has announced its involvement in the first all-electric battery swapping vessel in the Port of Singapore. The news was shared on 28 September 2022 at a keel laying ceremony, led by SeaTech Solutions International (SeaTech), Yinson GreenTech (YGT), and Goal Zero consortium members, marking the start of construction on the first all-electric cargo vessel in the Port of Singapore – the Hydromover.

The all-electric Hydromover, owned by YGT and designed by SeaTech, will be the first to use Shift’s PwrSwäp technology, the first pay-as-you-go energy subscription-service that provides instant clean, renewable energy to ships without risk or obligations.

Technology

MAN ES to convert NCL cruise ship engine to dual-fuel methanol op: German engine manufacturer MAN Energy Solutions (MAN ES) has signed a memorandum of understanding with American cruise company Norwegian Cruise Line Holdings (NCLH) for the retrofit of the four-stroke MAN 48/60 engine to dual-fuel operation. Under the MOU, the medium-speed MAN 48/60 engine will be made capable of diesel/methanol operation. The MoU provides for a multi-stage project with the third and final stage involving the completion of field testing and engine handover to NCLH for commercial operation.

COSCO Shipping Heavy Industry joins hands with Anemoi: Top Chinese yard group COSCO Shipping Heavy Industry Co (CHI) is now able to offer wind propulsion options after signing a landmark agreement with Anemoi Marine Technologies, a UK provider of rotor sails to the shipping industry. Rotor sails, also known as Flettner rotors, are an energy-saving technology. The mechanical sails are comprised of tall cylinders which, when driven to spin, harness the renewable power of the wind to provide auxiliary propulsion to vessels, reducing fuel consumption and lowering harmful emissions entering the atmosphere by 5-30%.

Wind-assist and primary wind propulsion have great potential when it comes to decarbonizing the shipping industry, especially in the context of the EEXI and CII regulations coming into force next year as they can help vessels reduce fuel consumption and improve their carbon footprint.

Allseas turns to Kongsberg Maritime’s hybrid power tech to make its vessels greener: Offshore contractor Allseas has decided to furnish three vessels with Kongsberg Maritime’s battery technology and intends to pursue hybrid power solutions for its other vessels as well, in a bid to future-proof its fleet by making it greener and more efficient. While explaining that vessel hybridization is key to Allseas’ strategy to minimize the impact on the environment by optimizing efficiency and reducing emissions across its operations, the company revealed that it is equipping pipelay vessels – Solitaire and Audacia – and its multi-purpose vessel Fortitude with hybrid power technology from Kongsberg Maritime. The offshore contractor pointed out that energy storage technology optimises energy and load-sharing capability, explaining that batteries store energy when demand is low and deliver it back when demand increases, shaving peaks in power demand. Allseas further highlighted that this leads to optimal engine loading with improved fuel efficiency and reduced running hours.

Furthermore, the conversion into hybrid vessels underlines the firm’s commitment to reducing its operational footprint by implementing alternative energy sources that drive fuel efficiency and lead to a net-zero future.

MHI to study ammonia-fired power generation using gas turbines in Indonesia: Mitsubishi Heavy Industries (MHI) has signed an agreement with Indonesia’s Institut Teknologi Bandung (ITB) to conduct joint research and development of ammonia-fired power generation by a gas turbine. The new research is a part of the partners’ ongoing initiative to look into a variety of clean energy solutions to help Indonesia achieve decarbonization. It will apply ITB’s expertise in chemical reaction engineering to optimize power generation using ammonia fuel. Following demonstration testing with MHI’s H-25 gas turbine, the partners will work toward the commercial application of ammonia-fired power generation in Indonesia.

Fuels

DNV and Pavilion Energy introducing fully digitalized LNG bunkering in Singapore: As part of their collaboration to digitize LNG bunkering in Singapore, Pavilion and DNV have developed FuelBoss, a fully digitized end-to-end bunkering solution designed to improve process integrity, data transparency, and operational efficiency for customers. FuelBoss was launched in early 2021 for end-to-end digital bunkering of alternative fuels, with an initial focus on LNG. According to the developers, more than 400 bunkering transactions have already been handled through FuelBoss, connecting more than 20 different customers with their bunker suppliers, mainly in Europe. Users also report significant time savings from working digitally.

Bio-LNG is a solution for shipping’s decarbonization, SEA-LNG study confirms: Conducted by the Maritime Energy and Sustainable Development Centre of Excellence (MESD CoE) at Nanyang Technological University, Singapore (NTU Singapore), the study explored questions around fuel availability, cost, lifecycle emissions, and logistics, providing an overview of the applicability of bio-LNG as a marine fuel. It also investigated the feasibility of LNG and bio-LNG as a realistic pathway for the shipping industry to achieve greenhouse gas emission reduction targets in a sustainable manner. Bio-LNG can be blended with fossil LNG in relatively small amounts to reach the 2030 International Maritime Organization targets and the biofuel proportion in the mix can be increased to meet 2050 targets.

Santos and JBIC team up to promote energy security and clean fuel goals: Australian energy company Santos has signed a memorandum of understanding (MoU) with the Japan Bank for International Cooperation (JBIC) to promote the securing of stable energy and the progression of decarbonization goals. According to Santos’ managing director and CEO Kevin Gallagher, the MoU builds on the long history of collaboration between JBIC and Santor. The partnership aims to further strengthen Japan’s energy supply security, particularly focusing on its existing liquefied natural gas (LNG) business and its clean fuel targets.

Hundreds of thousands of seafarers will need the training to be able to handle new fuels: Hundreds of thousands of seafarers will require some type of new training by 2050 to be able to handle fuels such as ammonia, hydrogen, or methanol, and a significant number by 2030, initial findings of a massive study commissioned by the International Chamber of Shipping (ICS) show. The research study will attempt to quantify the scale of the challenge of upskilling and retraining the existing maritime workforce to handle the new fuels and provide an overview of what will this entail in terms of skills, training, and safety.

The study is being carried out by the classification society DNV on behalf of a Just Transition Task Force launched by the ICS at COP26 in Glasgow in 2021. The task force comprises ICS, ITF, and key UN agencies including IMO and ILO. The group is looking at ways of supporting seafarers in making the shift from high to low-carbon careers.

Biofuels

ExxonMobil, Tata NYK Shipping complete biofuel bunkering op in Singapore: On 26 September, Singapore-based Tata NYK Shipping, a joint venture of Tata Steel and NYK Line, deployed its Sagar series bulk carrier vessel, MV Sagar Moti, currently carrying salt from Mundra (in India) to Vietnam, which received ExxonMobil’s marine biofuel via a ship-to-ship transfer in Singapore waters before heading to discharge port. The fuel oil is a combination of a conventional 0.50% sulphur fuel with up to 25% waste-based fatty acid methyl esters (FAME). The bio-component has been accredited by the International Sustainability and Carbon Certification (ISCC) organization. After a successful sea trial, ExxonMobil is already supplying marine biofuel in the Amsterdam-Rotterdam-Antwerp (ARA) region.

Green Corridors

Green corridors for shipping coming to life: Working in conjunction with the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMZCS), McKinsey has provided a framework, 104 pages in length, for evaluating potential corridors. According to its authors, the report, titled “Feasibility Phase Blueprint”- “provides an approach to designing and demonstrating the feasibility of green corridors”. It is intended to serve as a ready-to-use guide for any stakeholder involved in green corridors for decarbonizing shipping and includes 80 plus off-the-shelf pages outlining methodology, analysis, and illustrative templates at each step of the value chain and across the ecosystem.” Importantly, the report is meant to be “a living document that will be refined over time as we collectively gain more knowledge and hands-on experience building green corridors.”

Ports

Port of Long Beach’s GHG emissions are up by 22 pct amid pandemic woes: The port's annual emissions report, submitted to the Long Beach Board of Harbor Commissioners, showed diesel soot down 88%, nitrogen oxides down 49%, and sulfur oxides down 96% from 2005. In the previous study year, diesel particulate matter was down 90%, nitrogen oxides were down 62%, and sulfur oxides were down 97%. The Port bases its analysis on 2005, the year before the original San Pedro Bay Clean Air Action Plan (CAAP) was adopted. In this year's inventory, GHG emissions increased by 22%, a significant change from the previous inventory when GHG emissions were down 10% from 2005.

APM, ADC unveil zero-emission vision for Aqaba Container Terminal: The Netherlands-based terminal operator APM Terminals and Jordan-backed Aqaba Development Cooperation (ADC) have signed a memorandum of understanding for a 15-year extension of their partnership in the Aqaba Container Terminal (ACT), paving the way for making the facility zero emission. As informed, the agreement secures a $242 million investment to accelerate plans to transform ACT into a truly sustainable gateway to Jordan, the Levant, and beyond. Regarding investment in solar energy, on-site solar will eliminate the terminal’s carbon footprint and the zero-carbon terminal will become the heart of Aqaba’s future logistics ecosystem, according to APM and ADC. Relocating customs closer to the port will optimize clearance processes and directly connect to Aqaba Logistics Village where increasing trade opportunities will reach the wider economy. Bringing together agents and shippers will also ensure faster goods distribution.

Emissions soar at Port of Los Angeles in 2021: The Port of Los Angeles’s latest Inventory of Air Emissions showed sharp increases in emissions in 2021 and the port said that the results were “significantly impacted” by vessels anchored outside the port complex. A new queuing system in late 2021 shifted waiting vessels out hundreds of miles over the horizon from the ports complex reducing the queue in San Pedro Bay by more than 90%. Congestion at the port of LA has also reduced significantly with the US West Coast saying recently that it had spare capacity. As a result of the surge in emissions in 2021 NOx emissions reductions no longer meet targets set in 2005 under the San Pedro Bay Clean Air Action Plan (CAAP). NOx emissions are now 44% below 2005 levels, compared to the 59% CAAP goal.

Regulations

Industry bodies urge EC to renew vessel sharing regulation to cut emissions & increase efficiency: Sharing space helps reduce transport emissions, increases competitiveness, and improves efficiency to reduce costs. This is what shipping industry leaders told the European Commission, calling for the extension of the consortia block exemption regulation (BER). The regulation, which expires in April 2024, is currently under review by the European Commission's Directorate-General for Competition (DG COMP). While the EU consortia block exemption regulations have been in force continuously since 1995, the Commission first adopted the BER in its current form in 2009. It was adopted for a period of five years and has since been renewed twice following evaluations of EC, the first time in 2014 and again in 2020. The World Shipping Council (WSC), the International Chamber of Shipping (ICS), and the Asian Shipowners' Association (ASA) have provided their input to EC in a joint statement accompanied by an economic report prepared by RBB Economics.

Governments

California, Oregon, Washington, and British Columbia vow to tackle shipping’s carbon footprint: The governors of the American west coast states of California, Oregon, and Washington along with the premier of British Columbia are joining forces to promote a low-carbon society, with shipping and ports very much part of the planning. The package of measures outlined covers many industries and much of society. Specifically, on maritime, the four leaders have vowed to launch a regional dialogue with ports and other levels of government where appropriate about how to achieve collective decarbonization goals through strategies such as electrifying drayage and cargo handling equipment; investing in infrastructure for shore power that helps reduce emissions from ships and pursuing strategies to advance low- and zero-carbon shipping.

Danish companies pursuing high sustainability objectives are urging the country’s government and politicians to maintain sustainability on top of their agenda: In a joint statement, signed by A.P. Møller – Mærsk, FLSmidth, Ørsted, and Vestas, among others, the companies asked the government to continue to explore ways to ensure public and private finance is used to back the transition to a sustainable and resilient future for all. The companies are urging for the acceleration of investments in green and energy-efficient solutions at scale, as well as advocacy efforts that encourage green investments and ensure that frontrunners are not penalized.

UK gov’t funds consortium eyeing world’s 1st zero-emission multi-fuel station for hydrogen, electric ships: A consortium led by UK zero-emission solutions provider Unitrove, which created the world’s first liquid hydrogen bunkering facility, has won thousands of pounds of government funding to explore the development of a zero-emission multi-fuel station (ZEMFS) that would power hydrogen and electric ships. The other winning members of the consortium include ACUA Ocean, manufacturers of hydrogen-powered maritime autonomous surface ships; Zero Emissions Maritime Technology (ZEMTech), a marine-focused project management and delivery company; and the University of Strathclyde, a maritime research institution.

The project is further supported by MJR Power & Automation, Orkney College UHI, and the Port of Tyne. It is part of the Clean Maritime Demonstration Competition Round 2 (CMDC2) launched in May 2022, funded by the Department for Transport (DfT), and delivered in partnership with Innovate UK.