Wednesday, December 11, 2024

'Are they going to walk away?': Charges 10 years after B.C.'s Mount Polley disaster

Doug Watt won't forget the sound of a tailings pond collapsing at the Mount Polley Mine more than 10 years ago, sending millions of cubic metres of waste into waterways in the British Columbia Interior. “I went outside, and you could hear the roar.

Nono Shen and Darryl Greer, The Canadian Press
12/10/2024
Contents from a tailings pond is pictured going down the Hazeltine Creek into Quesnel Lake near the town of Likely, B.C. on August, 5, 2014. Charges under the federal Fisheries Act have been laid against Imperial Metals Corp. more than 10 years after a tailings pond collapsed the Mount Polley mine, spilling more than 20 million cubic metres of waste water into B.C. Interior waterways. 
THE CANADIAN PRESS/Jonathan Hayward


Doug Watt won't forget the sound of a tailings pond collapsing at the Mount Polley Mine more than 10 years ago, sending millions of cubic metres of waste into waterways in the British Columbia Interior.

“I went outside, and you could hear the roar. It was like standing close to Niagara Falls,” the 74-year-old said in an interview Tuesday.

Fifteen federal Fisheries Act charges have been laid against Imperial Metals Corp. and two other firms after the dam collapse at the gold and copper mine in what would become one of the largest environmental disasters in provincial history.

Watt said he and other residents in Likely, B.C., the closest community to the dam, are pleased charges have been laid and now “only time will tell whether they actually get found guilty or not.”

“We're always wondering all the time, are they going to walk away with no accountability for what happened?" he said.

The earthen dam gave way at 1 a.m. on Aug. 4, 2014, sending about 25 million cubic meters of mining waste, including tailings and other materials, into nearby waterways.

A statement from the B.C. Conservation Officer Service issued Tuesday said it worked with the Department of Fisheries and Environment and Climate Change Canada to investigate possible contraventions of the act.

The indictment filed in B.C. Supreme Court on Dec. 6 outlines the charges against Imperial Metals, its subsidiary, Mount Polley Mining and Wood Canada Ltd., an engineering firm.

The indictment alleges the companies allowed a "deleterious substance" from the mine's tailings pond into several bodies of water "frequented by fish," including Polley Lake, Hazeltine Creek, Bootjack Creek, Edney Creek and Quesnel Lake.

It alleges the companies' work "resulted in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery … namely the death of fish or any permanent alteration to, or destruction of, fish habitat.”


Imperial Metals said in a statement the company received the indictment this week, and as the matter is before the courts it won't be making further comment.

A report from an independent expert panel released in 2015 concluded the key reason for the dam's failure was its design.

It said the engineers didn't take into account the complexity of the geological environment in relation to the dam embankment foundation.

It said engineers failed to recognize that the dam was "susceptible to undrained failure" when subject to the stresses associated with the embankment.

A three-year deadline for provincial charges in the case passed in 2017.

A spokesman for B.C.'s Ministry of Environment referred questions to the Conservation Officer Service's statement and said there would be no further comment "as it’s before the courts."



In 2022, Engineers and Geoscientists B.C., the provincial regulatory and licensing body, fined two former project engineers a combined $226,500, while a third was temporarily suspended and ordered to complete additional training.

A post from August on the Mount Polley Mine website says more than $70 million has been invested in environmental repair and clean-up efforts, "demonstrating a strong commitment to restoring the affected areas."

In September 2023, the Mount Polley Mining Corp. was awarded the Jake McDonald Reclamation Award for its habitat remediation work in Hazeltine Creek and adjacent areas.

The company said in its post that ongoing environmental monitoring has shown steady recovery, and its efforts will ensure the long-term health of the ecosystem in the area.

Jamie Kneen, a spokesman with Mining Watch Canada, said the Mount Polley spill left “devastating environmental impacts,” including potential damage to the salmon runs in the Fraser River.

“There's the physical destruction of 25 million cubic meters of material ripping down Hazelton Creek and into Quesnel Lake,” said Kneen.

He said there are still many questions left unanswered, such as whether contamination from the spill is still active in Quesnel Lake.

“Aside from seeing these charges actually brought forward, our major concern is still the ongoing contamination,” said Kneen.

“What we don't know — and there isn't really enough study being done on it — is what the consequences are for the fisheries, or for the salmon runs, and part of that is that those are very complicated systems to study. But also there's not that much investigation being done to try and sort that out."

Even 10 years later, Watt said he doesn't drink the lake water because he has safety concerns.

“We've lived here for like 27 years or more, and we knew what the lake was like before this accident happened, and we see that it deteriorated,” he said.

The offences under the Fisheries Act listed in the indictment carry fines between $500,000 and $6,000,000.

Individuals guilty of an offence under the act can be imprisoned for up to three years if they are convicted for a second time, however only companies face charges in connection to the dam's collapse.

The Conservation Officer Service said Mount Polley Mining Corp. and Wood Canada Ltd. face the same charges and all three companies are due to make a court appearance on Dec. 18.

This report by The Canadian Press was first published Dec. 10, 2024.

Nono Shen and Darryl Greer, The Canadian Press
Anglo American’s El Soldado mine faces environmental charges in Chile

The Superintendency of the Environment (SMA) has deemed these charges "serious", which could result in significant penalties.


December 10, 2024

Anglo American is working on issues related to the SMA’s findings. Credit: Marlon Trottmann/Shutterstock.

Chile’s environmental regulator, the SMA, has filed charges against Anglo American Sur, the local division of Anglo American, for alleged environmental violations at its El Soldado copper mine, Reuters reported.

The SMA has classified these charges as “serious”, which could lead to severe penalties including the revocation of the mine’s environmental permit, closure or a fine exceeding 12bn pesos ($12.4m).

Anglo American told the news agency that it is actively working to address the issues raised.

The company has communicated its efforts to the regulator and is seeking a meeting with environmental officials to discuss further actions.

The El Soldado mine, the smallest of Anglo American’s copper mines in Chile, produced 35,700 million tonnes of copper from January to September this year.

The company was quoted by the news agency as saying: “We are committed to working continuously with the authority to comply with all our environmental commitments.”

The SMA’s charges stem from various environmental concerns including an incomplete drainage system at El Soldado, which has led to water management issues.

Additionally, Anglo American reportedly failed to notify the SMA about these problems or to establish a maintenance plan.

Another significant finding by the SMA was the company’s inadequate monitoring of a vulnerable local frog species, the ‘Sapo rulo’, with a population of 3,867.

The regulatory body, along with officials from Chile’s water, geology and fishing agencies, conducted an audit of the mining site.

Anglo American now has a 15-day window to propose a compliance plan and 22 days to present a defence against the charges.

Last month, Anglo American South Africa divested a 6.6% stake in Anglo American Platinum, a platinum group metals mine
Trump vows fast permits for those investing $1 billion in US



Bloomberg News | December 10, 2024 | 

President-elect Donald Trump said his administration would help expedite permits for any person or company that invested at least $1 billion in the US.


“Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America, will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals,” Trump said Tuesday in a post on his Truth Social network. “GET READY TO ROCK!!!”

Trump did not immediately detail what steps his administration would take to help investors secure permits to fast-track projects and any such effort is likely to face hurdles at the state and local levels.

Trump’s pledge, though, is in line with his vows to help bolster energy, infrastructure and other domestic investments in his second term and roll back federal regulations Republicans say have hampered economic growth.

The president-elect is nominating North Dakota Governor Doug Burgum to head the Interior Department as well as a newly created National Energy Council and is tapping Chris Wright, who runs a Colorado-based oil and natural gas fracking services company, to lead the Energy Department.

Burgum is the head of an energy-rich state and and Wright is a vocal proponent of oil and gas development, highlighting the incoming administration’s focus on bolstering domestic energy production.

Permitting reform is a major focus for the oil and gas industries. The prospect of years of legal and regulatory delays has deterred the construction of new pipelines and has curbed the growth of natural gas production in the Appalachian region.

The same issue is now of primary concern for electricity generators and tech companies as the growth in artificial intelligence-related data capacity is forecast to rapidly increase US power demand over the next few years, requiring major investment in new generation and transmission infrastructure.

The issue has long been a priority for Trump, a former real estate developer who in his first term as president complained some of the nation’s most critical infrastructure projects were “tied up and bogged down by an outrageously slow and burdensome federal approval process.”
Long process

There’s growing concern across the energy sector about the long timelines to permit major energy and infrastructure projects — including solar arrays, oil development and power lines. Delays in getting power projects connected to the nation’s electric grids have blunted some of the benefits of Inflation Reduction Act subsidies for wind, solar and other emission-free power, prompting alarm from climate activists and Democrats in Washington.

Meanwhile, environmental approvals, including authorizations under the Clean Water Act, have also ensnared a variety of coal, oil and gas projects.

Lawmakers and presidents — including Trump — have tried to accelerate permitting before, with limited success. Under a 2015 transportation law, the US sought to expedite certain high-priority infrastructure projects, including those focused on electricity transmission, pipelines and renewable power production.

During his first term in the White House, Trump also advanced a plan meant to shrink project permitting timelines to just two years. He issued an executive order aimed at streamlining permitting for major infrastructure projects subject to scrutiny under the landmark National Environmental Policy Act. And his administration ultimately eased requirements for sweeping environmental reviews under the law. However, federal scrutiny can still stretch for years, even for projects that must also secure state and local authorizations.

It’s unlikely Trump could make sweeping changes to the federal permitting reform system using executive authority. There are limits to how much presidents can change administratively. Longstanding US law — particularly the 1970 National Environmental Policy Act — effectively sets a floor for some government scrutiny that can only be undone by Congress.

The statute requires federal agencies to take a hard look at the consequences of major federal actions affecting the environment, a category that can include highways benefiting from government spending as well as oil developments on federal lands.

Previous efforts to change federal permitting, including those during his first administration and other initiatives under that of President Joe Biden, have faltered without buy-in from Congress.

Congressional efforts that have included shot-clocks for federal agencies and expedited decision-making for oil and gas projects as well as transmission lines that could help transmit renewable power, have thus far failed.

On Capitol Hill, Republicans and Democrats have been jockeying over the best approach. While there’s bipartisan consensus that current rules hold back all sorts of energy development, there’s little agreement on an approach for revamping them. Many environmental advocates slammed a permitting overhaul advanced in July by Senators John Barrasso, a Republican, and Joe Manchin, an independent, saying it made too many concessions to the oil and gas industries.

(By Jennifer A. Dlouhy, Ari Natter and Josh Wingrove)

 

U.S. Navy Defends Three American Merchant Ships From Houthi Attack

Stockdale
USS Stockdale, one of two Arleigh Burke-class destroyers involved in the action (U.S. Navy file image)

Published Dec 10, 2024 5:30 PM by The Maritime Executive

 


Overnight Monday, the U.S. Navy blocked an attack on three U.S.-flagged ships off the coast of Yemen, continuing the service's run of success in thwarting Houthi aggression against American (not foreign-flag) vessels. 

Houthi spokesman Yahya Saree claimed Tuesday that the terrorist group attacked three American "supply ships" after they departed Djibouti, and asserted that these civilian vessels "had previously practiced aggression against Yemen." The group also targeted two U.S. Navy destroyers, he added, "triumphing for the oppression of the Palestinian people." Saree claimed that the strike achieved its objectives, but did not claim any damage. 

U.S. Central Command confirmed the attack on Tuesday afternoon. The Mideast regional command said that U.S. Navy destroyers USS Stockdale and USS O’Kane successfully shot down "a range of Houthi-launched weapons" while transiting the Gulf of Aden on Monday and Tuesday. At the time, the two destroyers were escorting three American merchant ships, and none of the vessels were unharmed. 

The Houthi attack on American merchant ships was the second attempt in two weeks, following a failed missile strike on the product tanker Stena Impeccable, the boxship Maersk Saratoga and the bulker Liberty Grace on Nov. 30. USS Stockdale and O'Kane successfully defended against that attack as well, and escorted all three into Djibouti. CENTCOM did not identify the vessels targeted in Monday's attack, but open-source intelligence analysts suggest that it was the same group of three U.S.-flag ships. 

Centcom said Tuesday that this time, the munitions included multiple aerial drones and one anti-ship missile - a less severe threat than previous attacks, which have involved multiple anti-ship missiles. 

Separately, the Houthis claimed to have conducted two drone strikes on the Israeli cities of Yaffa and Ashkelon. The Israeli Defense Forces have confirmed that one Houthi drone hit a residential building in Yavne, just northeast of Ashdod. No casualties were reported. 


Ingalls Removes USS Zumwalt's Iconic Guns, Installs Hypersonic Missiles

The total program cost for the upgrade is estimated at $1.1-2.0 billion. 

Zumwalt
USS Zumwalt without her deck guns (HII Ingalls Shipbuilding)

Published Dec 8, 2024 10:35 PM by The Maritime Executive

 

 

The unique destroyer USS Zumwalt is back in the water after a yearlong drydocking at Ingalls Shipbuilding. The yard has removed the vessel's iconic twin cannon turrets and replaced them with a weapons system more suitable for high-end modern conflict - the Conventional Prompt Strike hypersonic missile, or CPS. 

The U.S. Navy's futuristic Zumwalt-class destroyers were built to carry twin high-velocity cannons for shore bombardment, and these extra-large vessels resemble a sleek and stealthy version of a battleship. The number of ships in the class was cut back from 32 to three due to cost overruns, and the cost per round of manufacturing the specialized ammunition for the deck guns rose to an impractical $800,000-$1 million per shot. The production run for these costly high-speed shells was canceled, making the guns unusable. 

The Navy's priorities have changed since the post-9/11 era, and shore bombardment no longer figures prominently, especially in an era of high-tech competition in the Indo-Pacific. China and Russia both possess antiship missiles that greatly outrange Zumwalt's cannons, even if shells were available. Recognizing this reality, the Navy is repurposing the high-end Zumwalt-class with the high-end weapon of the 2020s: hypersonic missiles.

Huntington Ingalls is in the middle of modifying first-in-class USS Zumwalt at Ingalls Shipbuilding, and the extra-sized destroyer went back in the water again last week. While in drydock, Ingalls replaced the twin 155mm Advanced Gun Systems on the foredeck with new tubes for the Conventional Prompt Strike system. Zumwalt can now carry four all-up round CPS canisters, each containing three hypersonic missiles. This will augment her small arsenal of 80 conventional Vertical Launch System (VLS) cells. 

Initial plans called for leaving one of Zumwalt's nonfunctional guns intact on deck; however, aerial drone photos obtained by the AP appear to show that both guns have been removed. 

Second-in-class USS Michael Monsoor will be next in line for conversion, and the work will be performed at Bath Iron Works. The total program cost for the upgrade is estimated at $1.1-2.0 billion. 


 

India’s Pipavav Shipyard Delivers its First Project after Re-Opening

Pipavav Shipyard
Courtesy Swan Energy Ltd.

Published Dec 8, 2024 8:59 PM by The Maritime Executive

 

 

India’s Pipavav Shipyard has completed its first project after resuming operations in August. The yard, currently owned by Swan Energy, has been refitting the Indian Coast Guard patrol vessel Raj Ratan since September 4, which was its first contract under the new owner. This project was completed ahead of schedule on November 30, according to a statement by Swan Energy Limited (SEL).

The re-opening of Swan’s Shipyard came as positive news at a time India is reviving its domestic shipbuilding sector. The yard has the largest dry dock in India, measuring 662 meters by 65 meters. It also features modern fabrication, piping and painting facilities, and it has 500 acres of working space.

Pipavav Shipyard was founded in 1997 and became the largest private shipbuilding firm in India. During the Great Recession, it sank into bankruptcy, and it was sold in 2016 to the Indian conglomerate Reliance Group. However, it failed to settle all its debt obligations, and in 2019 the shipyard was pronounced insolvent, initiating a bid for a new buyer to recover an estimated $1.2 billion in debt.

Swan Group acquired Reliance’s yard over the course of 2022-24, and it pledged to invest $500 million to return the shipyard to its former glory. With a rising global demand for shipbuilding, Swan’s Pipavav Shipyard will focus on building bulkers, tankers and gas carriers.

“The resumption of operations at our shipyard marks the successful culmination of our dedicated efforts to rejuvenate this strategic facility. Delivering our first Indian Coast Guard vessel underscores our commitment to enhancing India’s ship repair and shipbuilding capabilities,” said Vivek Merchant, Director of Swan’s Pipavav Shipyard.

The re-opening of the Pipavav yard comes at an active time for Indian shipbuilding. Indian yards have recently signed naval repair contracts with the U.S. Navy, attracted interest in potential orders from the Russian government, and engaged with leading South Korean shipbuilders to form technical collaborations and joint ventures. Recently, a high-level Indian delegation led by T.K. Ramachandran, the Secretary of the Ministry of Ports, Shipping and Waterways, visited South Korea to study advanced shipbuilding techniques. Formal agreements for this shipbuilding collaboration are anticipated during India’s Minister for Ports visit to South Korea in March 2025.   

 

Japan's Onomichi to Divest Ownership and Management of Colombo Dockyard

Colombo Dockyard
Colombo Dockyard is looking for a new strategic investor to replace Onomichi (Colombo Dockyard)

Published Dec 10, 2024 12:50 PM by The Maritime Executive

 


Japan’s Onomichi Dockyard Company has informed the board of Colombo Dockyard of its plans to divest its 51 percent ownership stake in Sri Lanka’s international shipbuilding and repair company. The move comes as the company is marking its fiftieth anniversary while facing deepening financial challenges and competition in the international market.

Sri Lanka highlights the location of the shipyard and its expanded capabilities as strategic advantages. In addition to being a large employer, the yard draws in critical export revenues for the country which has been plagued by a financial crisis. In 2023, Colombo Dockyard which supplies ships and undertakes projects for India, Norway, and France, earned approximately $110 million in export revenues, up 36 percent over 2022.

The current company was started in the 1970s by the government of Sri Lanka and began operations in 1974 focusing on harbor craft and smaller vessels. Today, it has the ability to handle vessels up to 125,000 dwt and provides both newbuilding and repair work. 

Colombo Dockyard highlights its expanded repair work as well as involvement in building a cable layer, hybrid bulkers, and work on VLGCs, dredgers, and offshore vessels. It has been undertaking projects for Europeans but faces regional competition as India looks to expand its shipbuilding industry.

The shipyard company has been under severe financial pressures with revenues so far in 2024 down by a third. Last year was the worst financial performance in the company’s history. It recorded a loss of nearly $38 million and has a total retained loss on its books currently of nearly $26 million. The company says it has informed its key creditors of Onomichi’s intent to divest its shares.

Onomichi which has been involved in shipbuilding since the 1940s, acquired its 51 percent take in the company in 1993 from the government of Sri Lanka. It was part of a privatization drive by the then prime minister and the deal also gave management control to Onomichi. As part of the decision to divest its shares, Onomichi’s board representation announced its resignation.

The board of Colombo Dockyard advises shareholders that it is in preliminary discussions for a new strategic partner. It reports unidentified parties have expressed an initial interest in investing in the company but that no terms have been set for the future. They look to continue the operation and have received assurances from Onomichi of its willingness to work with a new strategic buyer. 

 

Eastern Pacific Shipping Expands Use of Wind Propulsion to a Newbuild

suction sails on tanker
Rendering of the first installation planned by EPS for one of its newbuild tankers (Bound4blue)

Published Dec 10, 2024 6:05 PM by The Maritime Executive

 

 

Eastern Pacific Shipping (EPS), one of the largest shipping companies and recognized as an innovator, is expanding its use of wind-assisted propulsion to one of the company’s newbuilds, the first time it has used the technology on a new construction vessel. It follows the growing adoption of wind-assisted propulsion aboard increasing segments of the shipping industry.

Spain’s Bound4blue reports it received the order for three 22-meter (72-foot) suction sails. They will be installed on a newbuild MR tanker Eastern Pacific Shipping has on order from China’s New Times Shipbuilding. The installation will take place in late 2025.

The decision to incorporate the technology known as eSAIL EPS said aligns with its broader decarbonization strategy. The company which reports it has a fleet of over 300 vessels representing 31 million dwt, highlights its use of dual-fuel vessels, biofuels, voyage optimization systems, and carbon capture technologies. 

EPS’s first project with Bound4blue and foray into wind-assisted propulsion took place in February this year when it ordered a system for an in-service vessel that it manages. It involves retrofitting three eSAILs on Pacific Sentinel, a 50,000 dwt chemical tanker. Built in 2019 and tanker registered in Liberia, it will be the first EPS-managed ship to test wind-assisted propulsion. The ship is owned by Japan’s Kotobuki and measures 600 feet (183 meters) in length.

Bound4blue emphasizes that the system is fully autonomous. It works by dragging air across an aerodynamic surface to generate propulsive efficiency. This helps reduce vessel fuel use, OPEX, and emissions say the company, while also enhancing regulatory compliance. They said it is a mechanically simple system with EPS previously saying it expects to reduce overall energy consumption by approximately 10 percent, depending on vessel routing.

The company said EPS’ decision to expand the use of its suction sail also paves the way for broader industry adoption of wind-assisted propulsion systems. In 2024, Bound4blue reports it saw exponential growth, increasing from four projects on the orderbook to fourteen.

Founded in 2014, Bound4blue says its eSAIL system is up and running on four ships and it has signed additional agreements with other shipowners such as Maersk Tankers, Klaveness Combination Carriers, Amasus, Eastern Pacific Shipping, Marflet, Louis Dreyfus Company, Marubeni Corporation, Odfjell, Louis Dreyfus Company, and SNA TUHA'A PAE to install the system.

The installation for EPS is being funded by the European Union under a grant from the Innovation Fund program.

Japanese Power Generation Company JERA and BP to Merge Offshore Wind Ops

offshore wind farm
BP and JERA will merge their offshore wind operations to form a new standalone joint venture company (BP)

Published Dec 9, 2024 2:08 PM by The Maritime Executive

 

 

In the latest demonstration of the changing landscape of the offshore wind energy sector, UK-based energy giant BP reported it will merge its interests with Japan’s power generation company JERA, a joint venture between Tokyo Electric Power Company and Chubu Electric Power. Combing the assets of the two companies into a new standalone joint venture they said would create a top five company while also bolstering access to competitive financing.

BP has been active in the offshore wind sector since 2019 but earlier this year signaled its intent to slow its efforts. The company does not have operating wind farms but has a pipeline of 9.7 GW, including 5.7 GW of development projects and a further 4 GW of leases. It will contribute its interests in projects in the UK and Germany and leases off Scotland and the U.S. East Coast to the new joint company.

JERA has been in offshore wind since 2019 developing projects in the UK and Taiwan. Last year, it acquired Parkwind, a developer based in Belgium. It owns and operates wind farms in Belgium, Germany, Japan, and Taiwan with a development portfolio for projects in Japan, Ireland, and Australia.

“Offshore wind has significant potential and is a critical component of the energy transition,” said Yukio Kani, CEO of JERA announcing the new company which will be known as JERA Nex BP. “The sector is at an inflection point, and we believe the transformative partnership launched today between our two companies combines the resources, capabilities, and network necessary to be a world-class offshore wind company, and in doing so, realize the potential of offshore wind globally, while positioning this business for long term success.”

The combined company will be based in London with a CEO to be named by JERA and a CFO to be named by BP. The combination of JERA’s operating projects and both companies’ pipelines will give JERA Nex BP a potential current portfolio of 13 GW. They said the new company intends to accelerate development while also providing access to competitive financing. JERA and BP also agreed to provide capital funding for investments committed to before the end of 2030 of up to $5.8 billion.

BP said the new company would build on its successful cooperation with JERA while providing a “capital-light model” for BP shareholders. In June 2024, it was reported that BP halted new offshore wind projects as it sought to bolster its financial performance. The new company with JERA is expected to launch by the third quarter of 2025.

Shell similarly last week also announced internally according to a report from Reuters that it would be slowing its efforts in offshore wind development. The company reportedly said it would continue its current portfolio and look for roles in offshore wind while not initiating new projects.

While offshore wind continues to play a major role in the plans for lowering carbon emissions and the energy transition, the industry continues to experience challenges. Developers have pointed to the financial pressures, including the impact of higher interest rates and prolonged license processes, as well as supply chain problems. Other major developers including Ørsted and Vattenfall previously repositioned portions of their portfolio but the private equity portfolios have shown increased interest in investing in projects. 

 

Study Says Shipping Will Play Key Role in Carbon Capture and Sequestration

LCO2 trasnport
Northern Pioneer is the first dedicated CO2 carrier designed and built for a CCUS operation (Northern Lights)

Published Dec 10, 2024 2:45 PM by The Maritime Executive

 

 

Shipping is likely to play a critical role in enabling the emerging carbon capture, utilization, and sequestration (CCUS) initiatives with the strongest opportunities in Asia. A new report by the Global Center for Maritime Decarbonization and Boston Consulting Group points to a strong opportunity in developing this new segment of shipping while also calling for support from governments and industry to enable the massive investments that will be required to develop the capacity anticipated by global scientists.

“We estimate that around 170 million tons per annum (MtPA) of CO2 captured using CCUS technology will be transported globally via shipping by 2050,” reports Boston Consulting. “Shipping would connect countries in areas with substantial CO2 emissions to those with available sequestration capacity.”

Most scientists believe that CCUS will have to be a critical part of a global decarbonization strategy. They point to hard-to-abate emitters for which utilization or sequestration is seen as a viable solution. Efforts are already underway to develop the capacity and early tests have been done on the technologies required to inject CO2 below the seabed as a means of removing it from the atmosphere.

The study explored scenarios where shipping could play a role in CO2 transport. It concludes that shipping CO2 is more economical over long distances compared to pipeline transport. The researchers determined that shipping becomes economically advantageous compared with pipeline transport of the same amount of CO2 at longer distances. They set the threshold distance at 500 km (310 miles) saying it would then be economically viable for transporting 5 MtPA of CO2 by ship.

Shipping CO2 they found will be especially important in Asia Pacific where there will be greater distances between the emitters and storage locations. For example, they highlight the Northern Lights project in Norway is expected to transport CO2 between 500 and 1,000 km (320 to 620 miles) with vessels delivering it to the staging site and a pipeline moving the CO2 into the storage caverns below the sea floor. However, the study points out that in Asia routes could be 450 to 970 km (480 to 600 miles) and the longest routes between Northeast Asia and Australia would stretch 6,000 to 11,000 km (3,700 miles to 6,800 miles).

Within Asia-Pacific, the report concludes the volumes for transporting CO2 for storage could reach 100 MtPA by 2050. They highlight that Australia, Indonesia, Japan, Malaysia, Singapore, and South Korea are each pursuing CO2 storage and cross-border partnerships.

“While shipping CO2 under low pressure may offer economic benefits, such as increased vessel capacity and lower capital expenditure, it is operationally disadvantaged because storing CO2 at such conditions, which are closer to the triple point will increase the risk of dry ice formation,” the report cautions. They point to other dangers such as impurities in CO2 that might also have implications for the infrastructure build out.

To achieve the volumes anticipated in the Asia-Pacific region they predict it will require 85 to 150 liquified CO2 carriers of 50 kt capacity. The total investment could reach $25 billion by 2050.

“Creating a market of this scale will necessitate concerted efforts from both the public and the private sector, including economic incentives, long-term contracts for midstream players, and greater clarity on key standards,” the report concludes. They write that the investment required will be substantial to scale up cross-border CCUS will include shipbuilding, port, and terminal infrastructure development.

They identify several financial and regulatory gaps that will be needed before cross-border CCUS materializes. They call for direct economic support from governments to aid in the development of the industry along with long-term contracts and minimum volume guarantees from emitters. Recognizing the current nascent level of regulations, they call for countries to establish domestic regulations for issues such as carbon accounting and cross-border CCUS projects. 

They also highlight that the shipping industry will require clarity of standards and specifications for transporting CO2. They point to the need for clear rules and guidelines on issues such as the tolerance for impurities in CO2 cargo, operating pressures, and temperatures along the value chain.

While they forecast a critical role for a new segment of the shipping industry transporting CO2, the report also concludes the success of CCUS hinges on the simultaneous development of all parts of its value chain, including midstream activities line shipping, and intermediate storage.” They call on public and private stakeholders to collaborate and address the challenges so that a full CCUS value chain can be established unlocking the decarbonization opportunities.


 

Ukraine’s UDP is Auctioning Unprofitable Sea Fleet to Focus on River Ops

Ukrainian vessel
Ukraine is auctioning the six vessels of its Izmail ocean fleet due to costs nad unprofitability to xpand river freight (UDP)

Published Dec 9, 2024 5:06 PM by The Maritime Executive

 

The Ukrainian Danube Shipping Company (UDP), a state-run shipping company, is starting an auction to sell its six antiquated ocean-going vessels that used to operate on the Black Sea, Sea of Azov, and the Mediterranean. The company called it a “painful but the only right decision,” as its focus is on shipping from the river ports on the Danube and Dnieper.

The company posted online last week an auction for six Izmail-type cargo vessels with the auction set to begin on December 13. The six vessels are being offered as a single lot even though only two are currently in operating condition. A minimum bid of approximately $10.6 million was set for the vessels with an approximately $500,000 guarantee also due.

“We must get rid of unprofitable non-core assets and direct resources to modernizing the river fleet,” UDP said announcing its plans for the auction. “It is in the segment of river freight transportation that shipping companies have development prospects.”

The change in condition is also symptomatic of the economics in the bulk market since the ports in the Odesa region have reopened the company said. They said after the blockade of Odesa was lifted, freight rates collapsed with many private companies able to operate at lower rates than the state company.

The six ships, VylkovoIzmailTatarbunaryViana do CasteloKiliya, and Reny, were built in Portugal between 1992 and 1993. Each is 3,700 DWT with two large holds able to operate from the river ports and the seaports. Before the war, the vessels were operating on bareboat charters but they were returned to Ukraine. In 2023, with a government mandate to move grain and other cargo and rates high with the seaports blocked, UDP reports it was economical to start the refurbishment of the vessels. Work was completed on Vylkovo and Izmail and planned for Reny, but when freight rates collapsed the restoration of the vessels became uneconomical.

 

Four of the vessels need restoration with Ukraine's hope that all will be put back into service by a private operator (UDP)

 

“We analyzed and worked out all possible options. We considered proposals for transferring vessels to time charter. However, the income from the charter will not cover the future costs of maintaining and repairing the vessels. This is a clearly unprofitable project for the state,” reports UDP.

It says it is spending money to keep the ships laid up. They will also now face additional certification requirements and costs due to their age. 

They report the shareholders of the company supported the decision to start the privatization and sale of the six vessels. They said there has been interest in the two that were restored, but they want to sell them as a single group. The hope is that a private company will restore all the ships to expand shipping capacity from Ukraine.