Cleaning Up Ship and Plane Emissions
(Article originally published in July/Aug 2023 edition.)
“Planes, Trains and Automobiles” was a 1987 hit comedy, but cleaning up emissions from aviation and shipping is – unfortunately – no laughing matter. You may well need a sense of humor to do it, however. Aviation and shipping are the toughest sectors for cutting emissions because of their global scale, long-lived assets and financial structures. They lack easy solutions.
Transportation itself accounts for a fifth of global emissions. Aviation and shipping each represent about 11 percent of that or three percent of global emissions. But their emissions are growing and projected to keep growing.
Vehicles represent by far the largest share of transportation emissions – 75 percent. But their emissions are shrinking as fossil fuel-powered vehicles are replaced by ones using lithium-ion batteries. Building battery-powered vehicles creates more emissions than fossil fuel-powered vehicles, but they drive carbon-free. It’s all about how many BEV (battery electric vehicle) miles must be driven to offset their legacy emissions, which depends on how dirty the power supply is.
For vehicles, swapping fuel tanks for batteries is an easy decision. Overcoming the challenges of charging wheeled vehicle batteries is multiple times easier than for planes and ships that are constantly detached from terra firma.
Batteries lack the energy density to power huge, globe-traveling ships and weight-restricted planes. A typical container ship needs the power of 10,000 Tesla S85 batteries every day! Charging them is between difficult and impossible. Therefore, battery-powered ships will be limited to harbor and short-haul travel where they can easily be recharged daily.
Shipping’s Bumpy Path
In recent years, aviation has progressed faster than shipping in cutting emissions. However, the U.N.’s International Maritime Organization, the regulator of global shipping, wants to catch up. The July IMO meeting adopted a new plan to leapfrog its emission-reduction missteps.
Instead of getting on board with the 2015 Paris Climate Agreement, the IMO targeted its sulfur emissions problem before tackling CO2. Until 2020, when the IMO’s rule limiting sulfur content in ship fuel came into effect, the typical ship burned heavy fuel oil with 3.5 percent of sulfur by volume. That was cut to 0.5 percent. Between 2019 and 2020, the volume of HFO used dropped from 81 to 50 percent while low sulfur fuel oil’s share jumped from three to 32 percent and then 70 percent in 2021.
Emissions could be cut!
Responding to its critics, in 2018 the IMO adopted a goal of cutting shipping emissions to 50 percent from 2008 levels by 2050. Climate activists were dissatisfied, demanding a 100 percent reduction. Their dissatisfaction pushed the IMO in July to adopt a net zero goal “by or around, i.e., close to 2050.”
Although years away, shipping’s long-lived assets mean immediate decisions and investments are needed. The shipping industry must find new non-carbon engine technologies and fuels. But which ones? Nuclear is a long-term option but costly and challenging. Today, the top candidates are methanol, ammonia and hydrogen. Each can be produced from green energy, thereby not emitting carbon when burned.
Dr. Martin Stopford of Clarksons Research has studied the shipping industry’s history of innovation. Since shifting from sailing to power, freight costs have dropped 95 percent, dramatically lowering the cost of just about everything. The reduction came despite shipping transitioning from wind to coal to cheap oil and now to expensive oil. That’s because the industry built larger ships, traveled faster and improved the efficiency of its logistics, information systems and automation.
Lowering freight costs further will prove impossible given the move to expensive green energy. Stopford believes using green methanol, ammonia and hydrogen, which cost 3.0-3.5 times more per ton than HFO when adjusted for the energy density of the fuels, will erase all the industry’s freight cost gains achieved over the past 170 years.
A 2022 study by energy consultant DNV confirmed Stopford’s analysis. Not only are the new fuels more expensive, but they necessitate new engine technologies and rebuilding the global shipping fleet. Additionally, a new global fuel infrastructure must be constructed.
DNV estimates that ten major refueling locations across the globe handle 55 percent of the industry’s fuel needs, but that leaves nearly half the supply to be positioned elsewhere. For ships trading between those ten hubs, fuel availability will not be an issue. Ships traveling elsewhere may find limited supplies, forcing them to detour or carry more fuel and less cargo, boosting freight costs.
Methanol appears to be the early fuel winner. Last year, 35 methanol-fueled ships were ordered for 13 percent of fleet additions. While the industry wrestles with which new fuel will dominate, it must start cutting emissions. Slow steaming, adding sails to assist propulsion and burning compliant biomass fuels comprise shipping’s strategy. Carbon capture and sequestration are being explored, but onboard space may be a problem.
Each solution has technical and cost issues, but these are the cost-effective interim steps shipowners can take until they gain confidence in green fuel technologies and understand their challenges and costs. Estimates are shipowners must invest $2 trillion or more between now and 2050 to make the fuel transition. That money will come from higher freight costs for shippers and consumers. What does it mean for global growth and inflation?
Aviation’s Easier Road
Aviation, while having similar emissions challenges as shipping, may have an easier road to net zero. Forecasts for air transportation suggest annual growth of three to four percent, which is twice that of shipping. Faced with more fuel use yearly, the aviation industry is working feverishly to improve jet engine efficiency.
Past gains enabled planes to fly farther, carry more passengers and cargo, and lower ticket prices. However, burning more fuel, even in more efficient engines, means increased emissions. New fuels and engine technologies must be the answer.
Many of the green fuel solutions offered for shipping are not feasible for airplanes. Weight and size limitations rule out batteries. Likewise, energy density issues eliminate methanol and ammonia from consideration. Hydrogen is a dense energy source, but it’s expensive and creates difficult and dangerous handling and storage issues. Powering small planes with hydrogen is being tried with hopes that, by the 2040s, large commercial planes can use it. We will see.
The aviation industry’s preferred solution is Sustainable Aviation Fuel made from agricultural products and industrial wastes. Studies show SAF will be the primary fuel for reducing aviation emissions. Expectations are the world will expand the list of raw materials for manufacturing SAF, but by 2040 synthetic SAF may be needed to further the industry’s decarbonization effort.
However, SAF alone won’t be enough. The aviation industry must cut emissions by improving operational efficiency. It must also embrace carbon offsets as the final decarbonization step.
SAF is currently a drop in the bucket of jet fuel supply. It requires building new and converting existing refineries. The fuel needs to be distributed worldwide, which makes it more expensive. To help, governments are jumping in with huge subsidies. Or they’re mandating the fuel’s use under penalty of fines for falling short of standards, which will support more supply. The first strategy is the U.S.’s; the second, the E.U.’s.
Although both governments are shooting for SAF to replace all traditional jet fuel by 2050, this will be a herculean task. The Department of Energy estimates one billion dry tons of biomass can be collected sustainably each year in the U.S., which would yield 50-60 billion gallons of SAF. In 2022, the industry only produced 15.8 million gallons of SAF or well under one percent of the estimated potential output.
The DoE is targeting three billion barrels a year of SAF by 2030 and 35 billion barrels by 2050. In 2019, the most recent peak in U.S. jet fuel usage, the industry consumed 26.7 billion barrels, so the DoE’s 2050 goal would satisfy the nation’s needs.
SAF’s problem is its cost. Jet fuel in Houston recently cost $2.44 a gallon, but the International Air Transportation Association says SAF can cost 2-4 times more than jet fuel. Several airlines have said their costs are as much as eight times greater. The U.S. provides $1.25 a gallon in subsidies that can increase to $1.75 based on boosting emissions reduction to 100 from 50 percent. Still, this subsidy fails to offset SAF’s high cost.
In Europe, failure to meet the mandated blending percentages at all airports will result in fines based on the shortfall. The penalty is levied on both airlines and SAF producers to pressure both to respond. The rush is on to produce SAF and build the distribution infrastructure ensuring its availability at all European airports starting in 2024.
Solving aviation’s emissions challenge appears to just require money and time. Reducing the cost will be difficult because gathering and handling the raw materials for SAF is challenging, and building or converting refineries is expensive and takes time. Watch for expanded subsidies and higher ticket prices.
The 1987 comedy movie involved two unlikely travelers on a three-day odyssey of misadventures trying to reach Chicago for a family Thanksgiving dinner. The aviation and shipping industry odysseys to net zero emissions by 2050 may feature misadventures too. The cost to consumers, however, will be more than the price of a movie ticket.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.