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

2022-11-23 17:02By： Breakwave Advisors

The signatories of the joint statement are committed to making green hydrogen and hydrogen-derived fuels available to the maritime industry on a large scale, in line with their goal to fully decarbonize the industry by 2050 at the latest. The Getting to Zero Coalition supports the ambitions of the maritime industry by recognizing the role of hydrogen and hydrogen-based fuels in its pursuit of zero-emission ocean-going vessels from 2030, and green hydrogen developers and producers are committed to working toward producing the 5.5 million tons of green hydrogen needed for the shipping industry by 2030.

The commitment was signed by Maersk, Green Hydrogen Catapult, Getting to Zero Coalition, Intercontinental Energy, Acwa Power, Fortescue Future Industries, CWP Global, MAN Energy Solutions, Green Hydrogen Organization, and Aspen Shipping Decarbonization Initiative Facilitator of Cargo Owners for Zero Emission Vessels (coZEV).

Signatories called for action from peers in their sectors, including commitments from ship owners to invest in zero-emission vessels and technologies, and commitments from ports to invest in zero-emission fuel bunkering infrastructure and participate in green shipping corridors.

Alliances for Decarbonization

Maersk partners with Carbon Sink LLC on green methanol production: As part of the strategy to decarbonize its customers’ supply chains, A.P. Moller - Maersk has entered a green methanol partnership with US-based project developer Carbon Sink LLC. The two parties have signed a Letter of Intent covering the development by Carbon Sink of green methanol production facilities in the United States. The first facility will be co-located with the Red River Energy existing bioethanol plant in Rosholt, South Dakota, US, and will have a production capacity of approximately 100,000 tonnes per year. The commercial start is anticipated in 2027 and Maersk intends to purchase the full volume produced at the plant, with options for the output of subsequent Carbon Sink facilities at other locations.

Cargo owners roll out a roadmap to decarbonize ocean freight by 2040: Cargo owner-led network Cargo Owners for Zero Emissions Vessels (coZEV) has released a ‘Roadmap to 2040’, which outlines action areas cargo owners can start taking in 2023 to enable full decarbonization of their ocean freight by 2040. Reaching net-zero by 2040 has been established as a target by the 19 current signatories to coZEV’s 2040 Ambition Statement. The roadmap includes the creation of a new maritime freight buyers alliance, a cargo owner policy coalition, and a green corridor advisory board. Participation in these new action areas is open to all cargo owners interested in transitioning their ocean freight to zero-emission shipping in the coming years.

Among actions in the ‘Roadmap’, coZEV will work with cargo owner companies to establish the Zero Emission Maritime Buyers Alliance (ZEMBA) to accelerate commercial deployment of zero-emission shipping, enable economies of scale, and maximize cargo owners’ collaborative emissions reduction potential. ZEMBA plans to accomplish these goals by stimulating investment in zero-emission solutions.

CMES, BHP, and DNV cooperate on cutting maritime carbon emissions: China Merchants Energy Shipping (CMES), BHP, and DNV have signed a Memorandum of Understanding (MOU) to collaborate on the creation of a verified voyage data-sharing infrastructure, to support improved industry value chain greenhouse gas (GHG) management. With tightening environmental regulations and ever more ambitious GHG savings expectations from cargo owners and financiers, it is crucial for ship owners to accelerate the reduction of GHG emissions from their operations and for charterers to help, said the partners. To this end, CMES, BHP, and DNV have started their first joint pilot project, which focuses on the exchange and analysis of quality-assured data from selected ships and voyages. According to DNV, the first-ever Voyage GHG Verification Statement was issued by DNV as part of the pilot project, with the goal of establishing a trusted common source of data truth for use in various current or potential future business scenarios.

Industry Actions

Viridis Bulk Carriers readies its first ammonia-powered ship orders: Viridis Bulk Carriers – an ammonia-powered joint venture between Navigare Logistics, Amon Maritime and Mosvolds Rederi – has bagged another client, keen to join its pioneering green project. Stema Shipping becomes the eighth charterer to sign onto the Flexbulk – NH3 power consortium project joining the likes of Elkem and Yara creating enough short-sea shipping demand out of northwest Europe to proceed with ordering the first ships. Viridis Bulk Carriers now expects to place orders for ammonia-powered ships during 2023, with deliveries starting in 2025.

Maersk sets sights on green methanol production in Jordan: Danish shipping and logistics giant A.P. Moller – Maersk has signed a memorandum of understanding (MoU) with Jordan’s Ministry of Energy and Mineral Resources for cooperation in the field of green marine fuel production. The MoU was signed on the side-lines of the 2022 United Nations Climate Change Conference 2022 (COP27) held in Sharm El-Sheikh, Egypt. Under the terms of the agreement, Maersk will conduct preliminary technical and economic feasibility studies for green methanol production to contribute to the reduction of emissions in the maritime sector. The new deal comes shortly after the Danish shipping giant revealed its plans to collaborate with the Spanish government to explore the opportunities for large-scale green fuels production. The signing of the protocol was described as a significant milestone in the collaboration that, if fully implemented, could deliver up to 2 million tonnes of green fuels per year.

Next Generation of Vessels

BULKER

World’s largest suction sail system ordered for Marubeni panamax: Marubeni has signed an agreement to install a Bound4Blue suction sail system aboard panamax bulk carrier Crimson Kingdom. Dependent on trade routes, the eSAILs system is expected to cut fuel costs and CO2 emissions by up to 20%, with benefits to both EEXI and CII. Crimson Kingdom is a 229 m panamax operated by the Marubeni and Torvald Klaveness pool MaruKlav. According to preliminary studies, the ship is set to have the world’s largest suction sail system installed on a vessel and will be Marubeni’s first wind-assisted ship.

Oldendorff Carriers takes delivery of new eco-friendly Kamsarmax: Germany-based dry bulk carrier owner and operator Oldendorff Carriers has taken delivery of the second eco-friendly Kamsarmax vessel from Chinese shipbuilder Hantong Shipyard. As informed, the delivery ceremony of 82,000-ton bulk carrier Moudros took place in China on 2 November. The vessel has a total length of 229.00 meters, a width of 32.26 meters, and a depth of 20.35 meters. The ship was designed by Shanghai Ship Research and Design Institute. In October last year, the German bulker owner signed up for up to 12 eco-friendly Kamsarmaxes. The contract included 5 firm vessels, with options to purchase additional 7 ships. With the latest orders signed with the Chinese shipyard, Oldendorff will have a total of 31 vessels built at Hantong between 2016 and 2023, comprising 7 Newcastlemaxes and 24 Kamsarmaxes.

Maran Dry Management sets sights on bulkers that produce hydrogen fuel from LNG on board: Maran Dry Management, a unit of Greek owner Angelicoussis Shipping Group, has partnered with Italian class society RINA and Chinese designer Shanghai Ship Research and Design Institute (SDARI) to develop a newcastlemax bulk carrier that can run on hydrogen produced from LNG on board. The project for the 210,000 dwt vessel will be based on a propulsion arrangement that reduces the running machinery at sea and mixes LNG as the main fuel with steam to produce hydrogen and CO2. The design is based on a pre-combustion carbon capture principle, where the CO2 is captured from splitting the LNG molecules before the combustion in the engine takes place, rather than from exhaust gas emissions. The vessel can be built as a standard dual-fuel vessel, with the additional equipment installed once regulations incentivize the investment, the class society added.

Ro-Ro Sallaum Lines orders LNG-fueled RoRo pair: Global RoRo shipping company Sallaum Lines has placed an order with China’s Fujian Mawei Shipbuilding for the construction of two dual-fuel LNG 7500 Pure Car and Truck Carriers (PCTC). The ships will have a total length of 199.9 meters, a molded width of 38 meters, a molded depth of 14.8 meters, and a maximum draft of 10 meters. The ships will burn LNG on their dual-fuel main engines and be fitted with single bow thrusters and electric RORO systems. As informed, the cargo hold will be equipped with 13 vehicle decks.

CRUISE

Viking’s new cruise ship equipped with hydrogen fuel cells delivered: Italian shipbuilder Fincantieri has handed over Viking Neptune, a new cruise ship equipped with hydrogen fuel cells, to Swiss cruise line Viking. The vessel, which features about 47,800 tons, comes equipped with hydrogen fuel cells with nominal power 100 kW. The ship has been fitted with the latest technology as part of the test for the development of large-scale hydrogen applications. The initial launch of the ship took place in January this year. With the newest technology fitted onboard the ship, the company aims to achieve an increasing reduction of GHG emissions. The partners have designed an enlarged vessel configuration, to be applied to cruise ships to be delivered after 2024, which defines the spaces and arrangement for accommodating the increased size of the hydrogen tank, the fuel cell system, and other auxiliary equipment.

World’s largest LNG-powered cruise ship christened: MSC Cruises, the cruise division of Swiss shipping giant MSC Group, has held a naming ceremony for the world’s largest LNG-powered cruise ship and one of the first to incorporate fuel cell technology, MSC World Europa. Compared to standard marine fuels, LNG nearly eliminates air pollutant emissions like sulphur oxides and fine particles greatly reducing nitrogen oxides, and achieves a CO2 reduction of up to 25%, according to the companies. LNG will also enable the development of low-carbon fuels and solutions such as green hydrogen, synthetic LNG and fuel cells. Moreover, the unit is the world’s first contemporary cruise ship to feature solid oxide fuel cell (SOFC) technology powered by liquefied natural gas.

Technology

Bluestone to install air lubrication on two Princess Cruises ships: Bluestone Group, a specialist construction company based in the UK, has won a contract from Princess Cruises to install Silverstream Air Lubrication System (ALS) on two cruise ships, Sky Princess and Enchanted Princess. The latest contracts come on the back of the successful installation of the ALS on board the Regal Princess and are to be completed within the first half of 2023. The contract is part of Carnival’s strategy to install air lubrication ships across its fleet through 2027 to save fuel. Carnival is currently installing the Silverstream System ALS on five ships for its Princess Cruises and P&O Cruises (UK) brands.

Classification

ZEUS becomes RINA’s 1st ship capable of running on hydrogen: A prototype ship named ZEUS (Zero Emission Ultimate Ship) with hybrid propulsion has been classed by the Italian classification society RINA, becoming its first ship capable of running on hydrogen. The vessel was developed as part of the research project named Technologies with Low Environmental Impact for the production of energy on naval vessels (TecBIA), which is being implemented by Italian shipbuilder Fincantieri and is co-financed by the Italian Ministry of Economic Development. The project aims to validate the sustainability of fuel cell technology for naval applications through the construction of the prototype ship.

Fuels

Only a minority of Greek shipowners’ are opting for alternative and dual-fuel engines on their new building orders: On deeper analysis of 234 Greek newbuilding orders this year it can be seen whether Greek owners are turning towards a greener shipping industry or whether they are still waiting to see what green fuel and technology will prevail in order to proceed with orders of greener vessels. In the bulker orderbook, all the Greek orders are for vessels using conventional fuels. Only eight in the tanker orderbook are vessels that can use a dual fuel (mainly LNG) while there are 14 orders that are alternative fuel ready meaning, they can easily be retrofitted to use another fuel and 40 orders are vessels that use conventional fuels. When it comes to container ships most Greek orders are for vessels that use conventional fuels (53), 14 orders are for vessels that can be easily retrofitted to use alternative fuels and only two orders are for vessels capable of using other than conventional fuel. In notable contrast, Greek gas carrier orders are mainly alternative-fueled vessels. Over 60% of them, 34 vessels can use alternative fuels, 11 orders are vessels that can be retrofitted to use alternative fuels and only 10 orders are vessels that use conventional fuel.

The lack of strong national policies on green fuels holds back investments in shipping infrastructure: A new report by the Tyndall Centre at the University of Manchester, which highlights the role of the shipping sector in transporting green fuels, is urging governments to create far stronger national policies on low-carbon fuels to bridge ‘a yawning gap’ between government-led projects and what is required. The report called “Shipping’s Role in the Global Energy Transition” identifies growth in low-carbon hydrogen and sustainable bioenergy as essential to meet the Paris Climate Agreement’s goals. The world needs 50-150 million tonnes of low-carbon hydrogen by 2030, but there is a major gap between this and what is planned to date; already-announced projects will only produce 24 million tonnes by 2030, according to the International Energy Authority, and only 4% of these projects have a final investment decision.

Half of the vessels ordered by Danish shipping companies can sail on green fuel: Danish shipping companies have 51 new vessels under construction, and 25 of them can sail on green fuels, according to a new analysis from Danish Shipping, a trade and employer organization for more than 90 shipowners and offshore companies. Right now, there is a total of orders for 51 new vessels from Danish shipping companies, compared to 44 last year, which was a record low. This is the first time since 2015 that the number of Danish orders has increased, reaching the levels from 2020. Danish Shipping has a strategic objective that in 2030 at least five percent of Danish-operated vessels must sail on green fuels.

Biofuel trials

MOL tests biofuel on LNG carrier during vessel’s sea trials: Japanese shipping company Mitsui O.S.K. Lines (MOL) has revealed that its company Aquarius LNG Shipping Limited conducted sea trials of its vessel, liquefied natural gas (LNG) carrier Papua, using biofuel. Biofuel is positioned as an effective alternative to fossil fuels in the MOL Group’s new environmental strategy, which was announced in June 2021. Approximately 1,500 tons of biofuel was supplied by ExxonMobil Marine Limited on the vessel at the Port of Singapore. The marine biofuel used is a 0.50% sulphur residual-based fuel (VLSFO) processed with up to 25 percent waste-based fatty acid methyl esters (FAME). The bio-component has been accredited by the International Sustainability and Carbon Certification (ISCC) organization.

Finance

World’s first promotional platform for financing green hydrogen launched in Germany: German state-owned investment and development bank KfW has launched the world’s first financing platform for tailored financing of infrastructure for green hydrogen and its derivatives. Together with the Federal Ministry for Economic Cooperation and Development (BMZ) and the Federal Ministry for Economic Affairs and Climate Action (BMWK), KfW will establish two new hydrogen funds with €550 million. The announcement of the establishment of the PtX Platform was made at the UN Climate Change Conference COP27 in Sharm el-Sheikh. As explained, the PtX Platform will house the PtX Development Fund and the PtX Growth Fund.

Ports

Port of Los Angeles and Japan External Trade Organization Los Angeles Office sign a cooperative deal: Officials from the Port of Los Angeles and Japan External Trade Organization Los Angeles Office have signed a Memorandum of Understanding (MOU) to further promote cooperation in several key strategic areas, including sustainability, environmental initiatives, and supply chain optimization. The MoU calls on the Port of Los Angeles and JETRO Los Angeles to work closely on strategies related to environmental sustainability, including collaboration and best practice sharing on zero-emission vehicle and equipment testing and deployment; use of alternative energy sources; and cooperation on other emerging terminals, ship and truck environmental initiatives.

Valenciaport, Baleària to inject $102 million in new eco-sustainable terminal: The Port Authority of Valencia (PAV) has approved the award to Valencian company Baleària Eurolineas Marítimas S.A. for the construction and operation of the new public passenger terminal worth about $102 million (€100 million). According to the PAV, the maritime station will operate with zero polluting emissions and will be committed to the circular economy. The new passenger terminal will guarantee that 100% of the necessary electrical energy will be produced in the facilities themselves and will be of renewable origin: photovoltaic, wind, renewable hydrogen, or biofuel.

Port of Aberdeen gets £200,000 to speed up its drive to net zero: The UK’s Port of Aberdeen has been awarded more than £200,000 from the UK Government to accelerate its drive to Net Zero by 2040. The ‘Port Zero’ feasibility study, which is part of the Clean Maritime Demonstration Competition Round 2 (CMDC2), will analyze future port power demands, assess low carbon energy sources for equipment (e.g., cranes, tugs, pilot boats) and quayside infrastructure, and help develop a roadmap to decarbonize port operations. The study – which is being delivered in partnership with Energy Systems Catapult, Connected Places Catapult, and Buro Happold – aligns with the emissions reduction goals published in the Department for Transport’s Clean Maritime Plan.

Major UK port opts for shore power for tugs to cut CO2 footprint: Portsmouth International Port has ambitious targets to reach net zero by 2030 and become emission-free by 2050. The port is also working closely with all its partners to enable them to reach their sustainability goals. With the new shore power project, the port estimates that 131 tons of carbon per annum will be saved.

Green corridors

New green corridors hub launched to accelerate shipping decarbonization: Zero-Emission Shipping Mission, which aims to accelerate international collaboration to scale and deploy new green maritime solutions, has launched ‘The Green Shipping Corridors Hub’ to support action to realize green shipping corridors.

The hub, launched at COP27, forms part of the Blueprint for Future Ports Program published in September as part of the Mission Action Plan at the Global Clean Energy Action Forum in Pittsburgh. The tools, documents, and other resources on the hub platform are provided by the members of the Shipping Mission to help accelerate the maritime energy transition. The launch is a call to all industry members to engage with the tools on the platform. The program aims to create a blueprint for what a zero-emission fuel-ready port will look like in 2030.

Governments

Singapore is to invest an additional SGD129m in low-carbon energy research in 2022 to support critical enablers of Singapore’s energy transition: Low Yen Ling, Minister of State, Ministry of Culture, Community and Youth & Ministry of Trade and Industry opened OSEA (Offshore Southeast Asia) 2022 and welcomed delegates from more than 60 countries, highlighting the importance of investment in research and innovation. In line with Low’s speech, Singapore will invest SGD129m in low-carbon energy research (LCER) in 2022, significant amounts in projects to help import, handle, and utilize hydrogen safely and at scale. This investment adds to SGD55m already awarded to LCER projects.

Regulations

Bimco adopts CII clause: The clause starts from the position that the charterer should take responsibility for CII as the decision maker for ship operations which will impact the vessel's CII rating. CII regulations enter into force in January 2023 and will rate vessels based on their CO2 emissions per cargo capacity per nautical mile traveled. The regulation is expected to dramatically impact vessel deployments and operations as owners and operators look to attain and maintain certain CII ratings.

EU boosts IMO’s energy-efficiency project with additional €10mln investment: The European Commission has revealed it will invest an additional €10 million for an energy-efficiency project to reduce international shipping’s greenhouse gas (GHG) emissions through a global network of Maritime Technology Cooperation Centres (MTCCs), which is managed by the International Maritime Organisation (IMO). The project, funded by the European Union (EU), began work in 2016, establishing five regional MTCCs around the world. The centers promoted energy efficiency through national and regional capacity-building seminars, as well as demonstration projects (in Shanghai, Nairobi, Fiji, Trinidad and Tobago and Panama). The projects involved port energy-efficiency assessments, equipping port vessels with solar power, and establishing data collection systems for ship GHG emissions. The new funding makes possible a second phase of the project, focusing on portside energy efficiency measures.

By Maria Bertzeletou, Breakwave Advisors

The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.

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