Sunday, October 13, 2024

Study Highlights Potential and Challenges of Onboard Carbon Capture

Report used Stena's MR tanker as the basis saying the class could lead industry adoption (Stena Bulk)

An engineering study exploring the potential for the use of carbon capture aboard vessels highlights the feasibility of the technology both for retrofits and newbuilds demonstrating that it can be a key step in the efforts to reach the IMO’s decarbonization goals. The results showed despite the high current costs of the technology it could significantly extend the economic life of a vessel while also achieving meaningful reductions in CO2 emissions with a small fuel penalty.

The study was launched 18 months ago as a cooperation between the Oil and Gas Climate Initiative (OGCI), the Global Centre for Maritime Decarbonisation (GCMD), and Stena Bulk together with a consortium of the world’s leading maritime organizations. The goal was to identify the potential for using carbon capture as well as practical barriers, such as port readiness, which need to be addressed before OCCS can be widely adopted across the maritime industry.

“OCCS has gained traction in recent years as a feasible approach to meet the 2023 IMO revised GHG emissions reduction targets,” said Professor Lynn Loo, CEO of GCMD. “However, its adoption faces numerous hurdles, including the need to balance the tension between maximizing CO2 capture rates while maintaining commercially acceptable CapEx and OpEx.”

For the engineering study, they selected a medium range tanker highlighting that it is a common class of vessel with 1,700 in operation in the 40,000 to 50,000 dwt range. However, they note that it is not the most efficient segment but if successful with the technology it could lead to broader adoption in the industry.

Working with Stena Bulk they studied the Stena Impero (49,683 dwt), a modern product tanker built in 2018. The vessel uses a common two-stroke MAN diesel engine for propulsion and is currently fitted with an exhaust scrubber.

The engineering project analyzed the design and cost implications of retrofitting a carbon capture system on the vessel. It found that the technology could reduce the vessel’s carbon dioxide (CO2) emissions by as much as 20 percent per year, with a fuel consumption penalty of just under 10 percent.?

The cost of building and installing the full system on the Stena Impero was estimated at $13.6 million, with an abatement cost of avoided CO2 for the first-of-a-kind prototype evaluated at $769/ton CO2. However, the consortium believes that further research and development will drive down costs, making OCCS increasingly viable for the shipping industry.

With the use of OCCS technology, the report concludes that the Stena Impero could maintain its CII rating of “C and better” for an additional nine years. The vessel would be able to remain in compliance until the end of its economic life, assuming a CII reduction factor of two percent from 2027 onwards.

Dr. Michael Traver, head of OGCI’s Transport Workstream called the study a “major milestone in understanding the potential of using carbon capture technology.” The technical feasibility demonstrated in the project he said “is highly encouraging.”

The study also looked at incorporating OCCS on newbuild vessels, with the findings that improvements to capture rate and fuel penalty may be achieved using more efficient engines, heat pumps, and alternative solvents.

“For OCCS systems to be practical, the industry needs to manage captured CO2 effectively. To this end, GCMD has previously completed a study to define the operational envelope for offloading onboard captured CO2, contributing to the whole-of-system approach to emissions reduction via carbon capture,” commented Professor Loo.

The study provides quantitative insights on managing the trade-offs between the actual cost of operating OCCS and its emissions reduction potential. It also highlights that many challenges remain to be addressed. This includes the lack of a defined regulatory framework and operational challenges include recurring additional costs due to fuel penalty, amine solvent replenishment, manpower, maintenance, and offloading services.

The study points out that offloading captured CO2 is in its nascency, with a lack of national and port policies for accounting for captured CO2 and its final deposition. There is also a lack of infrastructure at ports to support offloading and storage. The results are detailed in a 139-page report released by GCMD.

They are calling for collaboration and support from stakeholders across the value chain needed to develop offloading infrastructure and onshore storage. Logistical and policy support for permanent sequestration or utilization of the offloaded CO2 they conclude will also be necessary to encourage the adoption of OCCS solutions.

Norway’s Kleven Returns to Shipbuilding Four Years After Bankruptcy

Norway’s Kleven shipyard (now known as Green Yard Kleven) reports it is returning to shipbuilding four years after its bankruptcy and sale to Green Yard, a Norwegian company focused on ship recycling, modifications, and lay-ups for ships and rigs. The company, which had a long history in shipbuilding including innovative offshore vessels, has been carrying out mostly retrofits since its bankruptcy in 2020 which came months after its sale to DIV Group, the owner of Croatian shipyard Brodosplit.

The company won an assignment from the Austrian-Romanian energy company OMV Petrom and its Neptun Deep project to build a Field Support Vessel. Along with Marin Teknikk who designed the vessel they highlight the order is not only for new construction but also for a unique vessel.

“Since taking over the shipyard in 2020, we have worked purposefully to establish ourselves in the new construction market with the right project for us, it is therefore very satisfying that we have now landed this contract,” said Hans Jørgen Fedog, CEO of Green Yard Kleven. “We are very pleased that OMV Petrom chose us for this contract. It has been an incredibly rewarding collaboration throughout and with great trust between the parties.”

Marin Teknikk explains the concept for the vessel started in 2006 with an original focus on the needs of the offshore wind sector. The concept was to develop a design that was both better and different from the OSV and CSOV that were then prevailing in the market. The design is both for the wind or offshore oil sector and they have been working with OMV for a year to customize the design to the unique needs of the oil and gas project.

The vessel will operate for the Neptun Deep project, which will be the largest natural gas field in the Romanian Black Sea area as well as Romanian’s first deepwater offshore project. OMV Petrom calls it a strategic site for the county noting that when it starts production in 2027 it will have an estimated total volume of around 100 billion cubic meters. It will position Romania as the largest gas producer in the European Union.

The Neptun Deep block in the Black Sea has an area of 7,500 square km and is located about 100 miles from shore. It is in an area with water depths ranging between approximately 300 feet to over 3,000 feet. Construction on the topsides for the unnamed platform is already underway. The total investment for Neptun Deep is estimated at up to €4 billion.

Green Yard Kleven's first newbuild contract is for a unique Field Service Vessel (Green Yard Kleven)

Marin Teknikk highlights since the vessel will be supporting operations at the unmanned platform all the technical and administrative personnel will be living on the vessel. They sought to improve the typical walk-to-work application to enable more operational days per year. The ship uses four azimuth propellers and special systems so that it will be able to stay connected with its walkway in wave height of up to an average of approximately 15 feet and a maximum of more than 25 feet without disconnecting.

The vessel will measure 295 feet (90 meters) with 90 cabins to accommodate 90 people. It will be able to store liquid cargo to be used by the rig in gas production and features a large aft deck for loading rigging equipment and containers.

The ship will have a large battery bank installed. It will also be equipped with tanks to use green methanol and biofuel in the future.

Green Yard Kleven reports the hull will be built by a subcontractor, Montex in Poland, and is expected to arrive in Norway at the start of 2026. The assignment begins immediately for Kleven and the ship is to be delivered in the second half of 2026.

Settlement of Pier Dispute Clears Way for SS United States to be Reefed

Update: The signing of the documents to transfer ownership of the liner took place midday on Saturday, October 12

The SS United States Conservancy has reached a settlement with Penn Warehousing & Distribution the company that controls the Philadelphia pier where the once famed ocean liner has sat for nearly 30 years. As part of the terms of the settlement, the title to the ship will be transferred in the coming days to Okaloosa County, Florida which is proceeding with its plans to sink the vessel to become the world’s largest artificial reef.

The non-profit confirmed in a statement today, October 11, that it has settled in the court-ordered mediation with its landlord. Terms of the agreement were not announced, but according to a briefing to the Okaloosa Board of County Commissioners, Okaloosa assumes the rent payments retroactively as of September 12 and faces a penalty if it does not remove the vessel by December 12. It will also pay up to a third of the cost of repairs to the pier’s bollards and fenders.

“Because of the court proceeding, we had a very limited time to find a new home for the SS United States. Despite intensive outreach to private pier owners, government agencies, elected officials, and public authorities at the local, state, and federal levels,” said Susan Gibbs, President of the SS United States Conservancy, “no suitable and available location was secured within the mandated schedule. While we have vetted various entities with proposals to purchase and relocate the ship, none satisfied our minimum due diligence or proved viable within our current timetable and logistical constraints.”

They blame the rent dispute and court decision to evict the ship for having “drastically impacted our plans for the ship’s long-term future.” The group had been seeking proposals to convert the ship into a multi-use attraction and was working with a real estate development company.

“Unable to save the SS United States in her current state and under a binding court order, we faced the painful but unavoidable choice between scrapping America’s Flagship or converting her into an artificial reef in tandem with a land-based museum. We chose the latter as the most dignified path,” said Gibbs. “While this is not the outcome we originally envisioned, the ship will have a future.”

Okaloosa Country’s Board of County Commissioners approved a $10.1 million budget earlier this month, including paying $1 million to acquire the vessel. The plan calls for the ship to be towed in the coming weeks from the Philadelphia berth that it has been sitting at since 1996 to a working berth in Norfolk, Virginia where the remediation efforts will begin to prepare the vessel for reefing. The tow is expected to take approximately two days. Observers noted this week that removal of the vessel’s anchors had begun.

The budget for the remediation is estimated nearly $7 million and will require many months. It will entail emptying and cleaning the vessel’s fuel tanks, removal of remaining contaminants, scraping the loose paint and deck materials, and removal of the funnels and radar mast.

The Conservancy plans to develop a museum and visitor center to which Okaloosa County will contribute $1 million. The plan calls for incorporating one or both funnels, the mast, and recreating spaces as well as displaying the Conservancy’s collection of artworks and artifacts from the vessel.

Retired from commercial service in 1969 after sailing for just 17 years, the sale of the SS United States ends a more than 40-year effort to repurpose the vessel. She took the speed title for the fastest Atlantic crossing by a passenger ship in 1952 and still holds the honor. She transported many passengers mostly on the Atlantic crossing between New York, England, France, or Germany, as well as military personnel, dependents, and government personnel during her career which was cut short by the end of the passenger liner era. She is one of the last surviving examples of the grand era of passenger liners.

Okaloosa County has identified several locations near Destin and Fort Walton Beach for the reefing. The goal is to create a tourist attraction that they hope will attract recreational divers to the region in Florida’s panhandle.

NTSB: Sleep Schedule Change Contributed to $6M in Dock Damage

When the deckhand of the towboat Cindy B fell asleep on watch and let the barge tow smash into a dock last year, he had had about 10 hours of total sleep per day for two days running - but research suggests that his sleepiness was still predictable, according to NTSB.

In the early hours of November 12, 2023, the towing vessel Cindy B was pushing the deck barge St. John up the Columbia River near Clatskanie, Oregon, bound for Troutdale. There were three crewmembers aboard, a captain and two deckhands. The deckhands kept a six-and-six watch rotation, alternating time on duty every six hours and sleeping five hours or less between watches. The master stood watch as needed, depending on the situation, and was at the helm that morning.

At about 0530 hours, the master needed a break, and he asked the deckhand on duty to take the helm. The deckhand was a helmsman-in-training with about one year of experience on towboats, and occasionally would stand watch unmonitored for breaks. The master went below to use the lavatory and make some coffee.

While he was out of the wheelhouse, the Cindy B began to drift to starboard. At about 0548, the towboat and tow exited the main channel, maintaining speed as it approached the main deepwater dock of the Port of Columbia County. It passed neatly between two abandoned sections of train trestle and struck the dock's access causeway at a speed of about six knots.

A 100-foot section of causeway was destroyed, and a variety of related infrastructure - including a large pipe for diesel - was damaged. Luckily the fuel in the pipe did not spill in any significant quantity, but the cost of repair came to about $5.5 million. The barge's bow hull plating was bent inwards about three inches, along with other minor structural damage, and repair cost to the barge came to about $650,000.

The deckhand was tested for drugs and alcohol, and the results came back negative. He told investigators that he had fallen asleep in between the time that the master left the wheelhouse (about 0530) and the time of impact (0552). The pilothouse alerter system failed to detect the change, perhaps because a dangling VHF microphone was swinging back and forth and activating the alerter's motion sensor.

NTSB looked at the deckhand's hours of work and rest for clues, and found that he had recently switched to a fragmented sleep schedule (six-and-six) with a night shift component (0000-0600). Though he had had 9-10 hours of total sleep in each of the past two days, a condition known as "circadian misalignment" caused by changing his sleep schedule may have led to "excessive sleepiness during watch."

"In addition to the general increased risk of accidents during a night watch, research of shift workers has shown that there is a greater chance of incidents during the first two nights of a night shift period," observed NTSB.

The agency acknowledged that it would be hard to address the risks posed by sleep schedule changes in the maritime industry, which is a round-the-clock enterprise. However, NTSB suggested that it might be possible to allow longer downtime between watches.

Bunker Tanker Catches Fire and Evacuated in the Baltic off Germany

tanker fire — Bunker vessel Annika caught fire off the German coast (DGzRS photos)

Germany’s rescue authorities are reporting that they successfully evacuated the crew and have been able to control a fire burning aboard a bunker vessel off the coast near Warnemunde. The German Maritime Search and Rescue Service (DGzRS) reports its vessel Wilma Sikorski was able to reach the burning tanker and remove the seven crewmembers several of whom suffered minor injuries.

The Annika (1,646 dwt), built in 2012 is a bunker vessel operating from the port of Rostock and it was in the Bay of Mecklenburg today between Kuhlungsborn and Warnemunde when the fire was reported at 0900 local time. Eyewitnesses told the media there was an explosion followed by a fire. It is believed to have started in the engine room of the tanker. The vessel is operated by a bunker supply company called Hans Rinck.

Fireboats were cooling the tanker (DGzRS)

Large plums of black smoke were seen from the vessel which is approximately 2.5 nautical miles from the coast.

The vessel is reported to be loaded with approximately 640 tons of oil. Environmentalists immediately reacted citing the dangers but the shipbuilder in Wismar reports the ship was built with a double hull and the normal protections.

The German sea rescue vessel Arkona and a deep-sea salvage tug Baltic operating for the Federal Ministry of Transport were also alongside. The emergency services reported they were cooling the exterior of the tanker.

Annika on fire in the Baltic (Havariekommando)

Fire teams were later able to board the vessel and assess the situation. Havariekommando, the central command for maritime emergencies in Germany, is reporting that the teams determined that the best course of action is to tow the tanker to continue the fire fighting at a berth.

The teams told the German media late today, “The danger is mostly adverted. It is just smoking now.” They were able to secure a towline and were underway to Rostock.

Hurtigruten and Vard Reveal Updated Plans for Zero-Emission Cruise Ship

After extensive planning and testing, Norwegian cruise company Hurtigruten and shipbuilder Vard provided a preview of the second-generation design for their planned zero-emission cruise ship. Continuing to target 2030 for the introduction of the ship known as the SeaZero project, they expect the vessel will achieve an overall 40 to 50 percent energy reduction with the capability to sail entirely emission-free during normal operation.

Concepts for the cruise ship were first presented in June 2023, with the companies reporting designs have progressed. While the caution that there will be adjustments both to the design and specifications along the way, the design is being modeled on a 443-foot (135-meter) length Vard reported in June 2024. The passenger facilities would have 270 cabins with a capacity for 500 passengers and 99 crew and as with Hurtigruten’s vessels operating on the Norwegian coastal route the SeaZero concept incorporates significant cargo space and the ability to transport cards.

One key element of the ship is sails which can be raised and lowered. The companies report they have adapted the concept incorporating OceanWings, similar to those already deployed on the Ro-Ro cargo ship Canopee. The estimate indicates that the sails could reduce energy consumption by around 10 percent over time. The plan envisions incorporating solar panels on the sails to contribute a further two to three percent in energy savings.

Vard reported in June that the design envisioned the three retractable, autonomous wing rigs that would comprise 1500 square meters (16,146 square feet) of solar panels and a total wind surface of 750 square meters (8,073 sq. ft.), reaching a maximum height of 50 meters (164 feet) when fully extended.

“We still see significant energy savings from having retractable sails with solar panels, but this requires thorough studies, including model tests to be conducted in the coming months. We have also changed the sail type to a more mature design already in use on cargo ships,” said Chief Operating Officer Gerry Larsson-Fedde of Hurtigruten.

The ship is planned with contra-rotating propellers as the main propulsion and batteries which will have a capacity of around 60 megawatt-hours. Two retractable thrusters at the stern would ensure optimal maneuvering during port operations which Vard says will be supported with artificial intelligence maneuvering. The ship will have shore power capabilities and can charge its batteries from shore power.

Another measure is air lubrication of the hull to reduce drag. Hurtigruten says air lubrication can provide energy savings of 5 to 10 percent. Combined with modern hull design, advanced anti-fouling coatings, and regular hull cleaning, they state that water resistance can be significantly reduced.

Preliminary results from the design studies also show that better ventilation and insulation systems, as well as advanced energy management, can lead to significant energy savings. The concept calls for “smart cabins” which will allow guests to control energy usage through a screen in the cabin, while also seeing how much energy is being used. Hurtigruten says it is already testing advanced sensors and in the near future will conduct full-scale tests on its current ships.

Typically, they note hotel operations on a cruise ship can consume up to 50 percent of the total energy use. The goal is a 50 percent energy reduction compared to Hurtigruten’s current ships reports Vard.

The SeaZero concept won Best Concept Ship Design at the prestigious Electric & Hybrid Marine Awards in Amsterdam, the Netherlands in June 2024. The jury of over 20 people consisting of journalists, consultants, and experts in maritime technology stated that it was impressed with the SeaZero cruise ship concept.

Vard reported in June 2024 that Sea Zero had now entered a two-year phase in which the proposed technologies will be tried, tested, and developed further in pursuit of the final zero-emission ship. The current research and development phase focuses on battery production, propulsion technology, hull design, and sustainable practices that reduce energy use to an absolute minimum.

Hurtigruten began installing batteries aboard its existing cruise and expedition vessels starting with the Roald Amundsen in 2019 and reports its Expeditions division now has three battery-hybrid ships out of its seven-ship fleet. The company continues to upgrade its existing fleet with various technologies that will cut CO2 emissions and improve efficiency.

First LPG Gas Carriers Fitted with Sails for Wind-Assisted Propulsion

First gas carrier to be fitted for wind-assisted propulsion (Anthony Veder)
Published Oct 11, 2024 8:28 PM by The Maritime Executive

Further demonstrating the growing interest in wind-assisted propulsion emerging in the industry, Anthony Veder, a leading operator of gas carriers, completed the first installation of wind-assisted propulsion on an LPG gas carrier. It is the first of two planned installations and part of a larger effort by the operator of LNG, Ethylene, and LPG carriers to enhance operations and move toward its goal of being a net-zero emitter by 2035.
“While we focus on optimizing the design of newbuilds and running those on (bio-) LNG, we are equally committed to enhancing the efficiency of our existing fleet,” said Björn van de Weerdhof, Commercial and Sustainability Director at Anthony Veder. “Wind-assisted propulsion is a key step in this effort, and our collaboration with Econowind reflects the strength of our partnerships. Additionally, we are exploring other solutions such as propulsion train optimization and joint action we can take with our customers such as lower speeds through Just in Time arrival and making use of shore power.”
Anthony Veder partnered with Econowind to use its VentoFoils on its vessels. Rens Groot, Chief Operations Officer at Econowind reports Anthony Veder conducted a thorough analysis before selecting the VentoFoils, including an advanced business case calculation balancing benefits and realistic costs. He said it demonstrated the potential for speed increases for gas carriers, where VentoFoils would help offset engine power limitations.

The installation was a retrofit to the Coral Patula (8,571 dwt), an Ethylene carrier built in 2009 in South Korea. The vessel is 377 feet (115 meters) and was fitted with two of the foils. The company plans to also retrofit the foils to the Coral Pearl (8,600 dwt) a sister ship also built in South Korea in 2009. Both ships are registered in the Netherlands.
By retrofitting the two Ethylene carriers in its fleet with Econowind VentoFoils, Anthony Veder will be using wind energy to significantly reduce the fuel consumption of vessels. The system is designed to work alongside existing engines, providing a boost in propulsion through the power of wind.
Based on wind conditions, the companies report they anticipate fuel savings of around five percent with the potential of more than 10 percent in optimal wind conditions. By using less fuel, the company not only cuts down on the energy bill but also on greenhouse gas emissions.

ESL Shipping Orders “Fossil-Free” Vessels to Lead Nordic Green Transition

ice class dry bulk carrier — ESL is promoting that its newest ships will be able to operate "fossil free" (ESL Shipping)

ESL Shipping, a dry bulk cargo carrier in the Baltic, highlights its new ship order as part of its ambition to lead the “green transition,” in the the Baltic region. The company which has been in business for 75 years and has over 40 vessels, has ordered a series of four handysize vessels which it is saying will be able to operate “fossil-free.”

The new 1A ice-class vessels ESL says will be able to operate entirely fossil-free by using green hydrogen-based e-methanol or biomethanol. The dual-fuel ships will be built in Nanjing, China at China Merchants Jinling Shipyard (Nanjing) Co, and will enter service between the third quarter of 2027 and the first quarter of 2028. The total value of the four ships is approximately €186 million and ESL Shipping reports it has the option to expand the order with several ships.

"Our strategy is based on sustainability leadership and our unique ability to develop and provide reliable infrastructure for the ice-bound Nordic green transition industries. We have developed these state-of-the-art, highly flexible multi-fuel vessels in close cooperation with our industrial partners,” says Mikki Koskinen, Managing Director of ESL Shipping.

The design of the vessels and comprehensive model tests were out with Finnish ship designer Deltamarin and the Swedish SSPA model test facility. ESL reports the ships which will be 17,000 dwt will be at the top of the market in terms of cargo capacity, technology, and innovation. ESL Shipping was closely involved in the design of the vessels to ensure that they were fully tailored to meet local customer needs and they believe they have developed a design that will offer market-leading energy efficiency, efficient and flexible cargo space design, and lower operating costs.

Among the many features of the design is a hybrid power system with 1 MWh capacity for cargo crane peak shaving and emission-free operations in port. The vessel will be equipped with advanced systems including water and ballast water treatment, shaft generators, shore power collections, and electric cargo cranes. The majority of key equipment, such as powertrain including battery hybrid drive, cargo handling equipment, and many other leading technologies will come from European companies.

The ships will measure (150 meters) and have a shallow draft of (8.6 meters) to give them flexible deployment including Great Lakes capabilities. The design also features a forward bridge and accommodations block which will provide a large deck and cargo capacity. The hulls are optimized and will have a 1A ice class rating.

The new ships will further advance the green ambitions of the company, which along with its sister brand AtoB@C Shipping, has been at the forefront of advanced, energy-efficient, and low-emission designs.

Report: Shipping Carbon Tax Will Impact African Economies and Food Security

grain loading on ship — Many of the poorest nations in Africa depend on shipping for the import of food supplies (file photo)

As the push towards the introduction of a global carbon tax on shipping gains momentum, a new report is highlighting that African economies are likely to be adversely affected. The report warns the tax may also negatively impact food security. Three Africa-focused policy organizations concluded that as the International Maritime Organization (IMO) moves forward with plans to introduce a levy/tax/carbon price mechanism aimed at putting a price on carbon to discourage shipping emissions, Africa must brace for impacts.

For the continent, the report warns that the imposition of a levy on carbon is likely to reduce the supply of maritime shipping services among African countries by up to seven percent, with imports and exports expected to suffer significantly. The higher shipping costs will impose additional costs on the transportation of merchandise, thereby increasing the price of imports. Ultimately, they conclude that imports are bound to decline by 0.04 percent while exports will increase by 0.21 percent in aggregate.

Also to be affected is the gross domestic product (GDP) of a majority of countries, albeit marginally. In the case of Equatorial Guinea, which would be the worst affected, the tax would slash the GDP by 0.121 percent.

The report also warns that a carbon tax on shipping would negatively impact food security in Africa, a continent that is already grappling with acute food shortage with about 20 percent of the population being undernourished. When imposed, the carbon tax the report states will increase the global prices of agriculture and processed food commodities by 0.011 percent and 0.013 percent respectively.

Considering that Africa is a net importer of food, the increase risks worsening the problem of food security in the continent which spends between $60 billion and $80 billion annually to import food. The report indicated that the levy would instigate a decrease in imports of agricultural commodities by countries including Egypt, Morocco, Ghana, Nigeria, and Ethiopia. DR Congo, Equatorial Guinea, Kenya, Zambia, and South Africa, however, could see an increase in the value of food imports.

Another impact of the tax would be on household incomes, which would fall in most individual African countries. A case in point is Ghana, which is forecast to experience a 0.101 percent reduction, 10 times the reduction forecast for European household incomes. Ghana’s limited fleet would also become too costly to operate and risks being rendered obsolete if stringent emission reduction measures are implemented the report warns.

Titled “Navigating climate action: Assessing the economic impacts and trade-offs of a shipping carbon tax for African states,” the report was done by the Africa Policy Research Institute, the Firoz Lalji Institute for Africa at the London School of Economics and Political Science, and the African Future Policies Hub.

The organizations used the Global Trade Analysis Project Energy-Environmental (GTAP-E) Computable General Equilibrium (CGE) model to come up with their findings, which examined the impacts of the tax on both the African economy as an aggregate and selected individual African economies.

“In general, the results show that a shipping levy is expected to reduce international trade, increase the cost of shipping, increase prices of commodities, and marginally reduce GDP and household incomes across the continent,” states the report.

The introduction of a global carbon tax on shipping to curb greenhouse gas (GHG) emissions looks inevitable after the IMO adopted the Strategy on Reduction of GHG Emissions from Ships last year. The tax, which is designed to push the industry towards the use of greener fuels and technologies, gained increasing support during the MPEC meeting concluded last week and set in 2025 to finalize the emissions programs including the structure of the carbon levee.

The report recommends that the IMO adopt GHG reduction measures that allow for the redistribution of a significant portion of the revenues raised towards funding out-of-sector mitigation and resilience. In essence, the IMO should ensure that the costs and benefits of efforts to cut emissions from shipping are equitably shared between countries conclude the authors of the report.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

Head of international shipping regulator says industry must do more to cut carbon pollution

A cargo ship sails toward the Pacific Ocean waiting to transit the Panama Canal in Panama City, June 28, 2024. (AP Photo/Matias Delacroix, File)

A boater passes between cargo ships on the harbor, in Vancouver, British Columbia, July 16, 2024.

(Darryl Dyck/The Canadian Press via AP, File)

BY PETER PRENGAMAN
October 9, 2024

HAMBURG, Germany (AP) — For years, the international shipping industry has been criticized for making little progress in reducing the carbon-belching pollution released from the fuels that vessels use in moving most of the cargo that people use every day, such as food, cars and clothing.

Now, the new head of the International Martime Organization, charged with regulating international shipping, is subtly calling out inaction and nudging companies to work harder. “What I’m finding is that there is more that can be done,” said Arsenio Dominguez, who gave a wide-ranging interview on the sidelines of the Hamburg Sustainability Conference in Germany this week. “The low hanging fruit is there.

Dominguez, who took over as secretary general at the beginning of this year, said that includes using satellites to chart routes according to weather, to waste less fuel, cleaning the hulls of ships to reduce friction in the water and what is often referred to as slow steaming, reducing ship speed, which also uses less fuel and thus pollutes less.

Dominguez was careful to note that many companies are working to cut greenhouse gas emissions, which cause climate change. But getting to the IMO’s goal of a 30% reduction in emissions by 2030 will require immediate implementation of every possibility.

A focus on the fuels that power ships

Ultimately, major decarbonizing will mean an overhaul of shipping fuel, said Dominguez, a point industry leaders agree on.

Today, most ships run on heavy fuel oil, which releases carbon dioxide along with sulfur, nitrogen and other pollutants. Much cleaner fuels already exist, and many more are being developed, such as hydrogen, ammonia and biofuels. But they are more expensive, not yet available at scale and only better for the planet when made in clean ways. For example, hydrogen can be made from water and clean energy via a process called electrolysis, and that does not release greenhouse gases. It’s considered “green” hydrogen. However, nearly all hydrogen today is made out of methane, meaning natural gas, using steam-methane reforming, which releases carbon dioxide.

“Fuels, fuels, fuels,” Bud Darr, executive vice president for maritime policy and government affairs for MSC Mediterranean Shipping Company, said when asked during a panel at the sustainability conference on Monday what the biggest challenges were to decarbonizing.

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“We need a massive scaling up of both production and shoreside infrastructure in order to deliver what we will need to operate the new generation of ships and equipment that we are investing in,” Darr said in a followup email.

Currently, the shipping industry is responsible for about 3% of global greenhouse gas emissions. Their total emissions are expected to go up sharply in future decades unless major changes are made.

Other parts of the world economy have made strides in decarbonizing, including electricity and ground transportation, thanks to electrification. Comparatively little has happened in shipping.

“The IMO has been very slow,” said Bastien Bonnet-Cantalloube, an expert on shipping and aviation decarbonization with non-profit Carbon Market Watch. “There was no progress in 10 or 15 years. Now things are starting to pick up.”

Last year, the IMO set a target to reach net zero emissions by or around 2050, a goal that is a potential catalyst while also putting a spotlight on just how far the industry has to go.

The IMO is being pushed to move toward a carbon tax in part to be in line with what is already happening in some places, like the European Union.

Starting this year, large ships coming in and out of European ports pay taxes on their carbon dioxide emissions. In 2026, they will also pay for emissions of the greenhouse gases methane and nitrous oxide. Some industry leaders hope that a carbon levy from the IMO, which would effectively be the world’s first global carbon tax, could allow shipping companies to simply pay one carbon tax, instead of taxes in multiple jurisdictions.

Still, there is wide disagreement, both among countries and shipping companies over a tax, how much it should be and what revenue would be used for.

IMO moving toward potentially big decisions next year

During meetings earlier this month in London, the IMO’s Marine Environment Protection Committee continued drafting text on mandates to phase in cleaner fuels and set a greenhouse gas pricing mechanism. But what those principles will translate into is far from clear.

“I don’t call it a tax. I know that is a way of referring to it,” said Dominguez, underscoring the sensitivity of the issue.

Dominguez said delegates, member countries of the IMO, considered multiple scenarios for rating the carbon efficiency of ships, setting fuel standards and gathering revenue for emissions.

The committee next meets in April, when it’s expected to approve the measures. Formal adoption would take place in the fall, and whatever is decided wouldn’t take effect until 2027, giving countries and companies time to adjust.

In the meantime, Dominguez said that shipping companies needed to do all they could to cut emissions, which for some included using liquid natural gas as a fuel.

Ship engine manufacturers had shown that using LNG in engines increased efficiency, which led to lower emissions, he said.

“If we stop LNG right now without an alternative, then we go back to Square 1,” he said, adding that he knew it “was a divisive point.”

Indeed, scientific studies have shown that leaks of LNG, which is mostly methane, itself a potent greenhouse gas, can cancel out any advantage gained from burning more cleanly compared to other fossil fuels. Environmentalists have long argued that using LNG is simply a way for major oil and gas producers to continue business as usual, thus postphoning a major transition to renewable energies.

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Energy Transition Outlook: Energy Related Emissions will Peak in 2024

[By: DNV]

2024 will go down as the year of peak energy emissions*, according to DNV’s Energy Transition Outlook. Energy related emissions are at the cusp of a prolonged period of decline for the first time since the industrial revolution. Emissions are set to almost halve by 2050, but this is a long way short of requirements of the Paris Agreement. The Outlook forecasts the planet will warm by 2.2 °C by end of the century.

The peaking of emissions is largely due to plunging costs of solar and batteries which are accelerating the exit of coal from the energy mix and stunting the growth of oil. Annual solar installations increased 80% last year as it beat coal on cost in many regions. Cheaper batteries, which dropped 14% in cost last year, are also making the 24-hour delivery of solar power and electric vehicles more affordable. The uptake of oil was limited as electrical vehicles sales grew by 50%. In China, where both of these trends were especially pronounced, peak gasoline is now in the past.

China is dominating much of the global action on decarbonization at present, particularly in the production and export of clean technology. It accounted for 58% of global solar installations and 63% of new electrical vehicle purchases last year. And whilst it remains the world’s largest consumer of coal and emitter of CO2, its dependence on fossil fuels is set to fall rapidly as it continues to install solar and wind. China is the dominating exporter of green technologies although international tariffs are making their goods more expensive in some territories.

“Solar PV and batteries are driving the energy transition, growing even faster than we previously forecasted.” said Remi Eriksen, Group President and CEO of DNV. “Emissions peaking is a milestone for humanity. But we must now focus on how quickly emissions decline and use the available tools to accelerate the energy transition. Worryingly, our forecasted decline is very far from the trajectory required to meet the Paris Agreement targets. In particular, the hard-to-electrify sectors need a renewed policy push.”

Energy transition progressing despite challenges

The success of solar and batteries is not replicated in the hard-to-abate sectors, where essential technologies are scaling slowly. DNV has revised the long-term forecast for hydrogen and its derivatives down by 20% (from 5% to 4% of final energy demand in 2050) since last year. And although DNV has revised up its carbon capture and storage forecast, only 2% of global emissions will be captured by CCS in 2040 and 6% in 2050. A global carbon price would accelerate the uptake of these technologies.

Wind remains an important driver of the energy transition, contributing to 28% of electricity generation by 2050. In the same timeframe, offshore wind will experience 12% annual growth rate although the current headwinds impacting the industry are weighing on growth.

Despite these challenges, the peaking of emissions is a sign that the energy transition is progressing. The energy mix is moving from a roughly 80/20 mix in favour of fossil fuels today, to one which is split equally between fossil and non-fossil fuels by 2050. In the same timeframe, electricity use will double, which is also at the driver of energy demand only increasing 10%.

“There is a growing mismatch between short term geopolitical and economic priorities versus the need to accelerate the energy transition. There is a compelling green dividend on offer which should give policymakers the courage to not only double down on renewable technologies, but to tackle the expensive and difficult hard-to-electrify sectors with firm resolve,” added Eriksen

The Outlook also examines the impact of artificial intelligence on the energy transition. AI will have a profound impact on many aspects of the energy system, particularly for the transmission and distribution of power. And although data points are currently sparse, DNV does not forecast that the energy footprint of AI will alter the overall direction of the transition. It will account for 2% of electricity demand by 2050.

*CO2 emissions from the combustion of coal, oil and gas

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