The Trillion-Dollar Challenge
The quest for carbon-free shipping will be expensive and challenging.
(Article originally published in Jan/Feb 2021 edition.)
Shipping faces a trillion-dollar challenge: How do you transition away from a high-carbon status quo to an uncertain, decarbonized future? It's a tall order and will take a long list of technological and operational changes to pull it off – along with a tremendous amount of money.
The industry will have to replace a proven mix of carbon-based fuels – distillate, HFO, VLSFO and LNG – while maintaining reliability, safety and economy. It requires a complex set of bespoke solutions to power shipping into the century's second half – with each one fitted to the application.
For many coastal and inland operators, battery-electric propulsion is the leading option for decarbonization. When combined with renewable electrical power, battery-electric comes closer to a zero-carbon, zero-emissions lifecycle than any other option in service today.
Lithium-ion batteries have a low energy density, limiting their use to short trips between charging, but are blessed with a chart-topping roundtrip efficiency: Almost all the power that goes in comes back out again in a useful form.
A growing number of passenger vessel operators in Norway, Denmark, Canada, the U.S., China and beyond have introduced all-electric ferries and leisure vessels with many more on order. The first battery-electric cargo vessel operators are also now arriving, and they’re newcomers to the maritime industry.
Two Norwegian shippers – fertilizer maker Yara and grocery distributor ASKO – are about to move some of their domestic cargoes off the road and onto battery-powered vessels. Yara’s one-of-a-kind electric container feeder Yara Birkeland was delivered in November, and ASKO’s two electric freight ferries are under construction now.
These companies are not traditional shipowners, and they’re not buying traditional ships. Their vessels will also be autonomous and eventually unmanned with automated cargo operations at each end.
Companies like these are ideal clients for pioneering electric/autonomous vessel projects, says An-Magritt Ryste, Product Director for Next Generation Shipping at Kongsberg Maritime, which designed the Yara and ASKO vessels in partnership with Wilhelmsen. Operating within national waters makes regulatory matters simpler, and fixed routes allow for installation of charging equipment and support infrastructure at each end – plus the opportunity to tailor the battery and hull design to a specific job.
These novel vessels will reduce carbon emissions but not necessarily see big returns. “Like many new technologies, volume brings better cost-savings and return on capital investment,” says Lars Kristian Moen, Kongsberg’s Sales Director for Advanced Maneuvering & Autonomy. “So purely financial benefits will follow as the number of autonomous ships increases.”
Merchant Shipping Options
Merchant shipping consumes about three million barrels of bunker fuel a day, which works out to a continuous power demand of about 240 gigawatts. If this load could be plugged into the grid without any other changes, it would be enough to max out all the power plants in Germany. Since that’s a tremendous amount of power to replace outright, experts say the transition will require increased efficiency and reduced ton-mile demand.
The biggest names in the business are actively engaged in meeting this challenge including Maersk (the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping), Lloyds Register (the Maritime Decarbonization Hub), the Global Maritime Forum (home of the Getting to Zero Coalition), and the 20-plus shipping banks that have signed on to the Poseidon Principles.
So what are the realistic options? Wind power can augment propulsion and reduce fuel consumption but is not widely seen as a stand-alone solution. Biofuels will make up a segment of the supply but come with challenges related to land-use change and lifecycle carbon emissions. Battery-electric propulsion is very efficient, but the sheer size of the battery pack makes it impractical for long-distance shipping.
The third prominent option? Renewable electrical power, which can be used to split water into hydrogen and oxygen via electrolysis, creating "green" hydrogen. The H2 can be reacted with nitrogen to make ammonia, which can be used to power diesel engines or solid-oxide fuel cells. This may be the most scalable method of moving big ships without carbon, and it’s gathering steam.
There are drawbacks, of course: Green ammonia only gives back half the power it takes to make and is both corrosive and toxic. However, it’s possible to fit enough of it on board, and that’s the critical metric for a zero-carbon deep sea ship. Maersk, MSC, NYK and CMA CGM have all signaled priority interest in developing this option.
It sounds attractive, but how do you make enough to go around? Hong Kong-based developer InterContinental Energy (ICE) believes it has a game-changing solution. ICE is planning a series of massive renewable energy projects at seaside desert sites with strong wind and solar potential – ideal for making lots of green hydrogen and green ammonia. Solar arrays would generate power by day and wind turbines at night, providing a steady flow of electricity and improving project economics. Electrolyzers for hydrogen production are expensive. If there’s enough power to run them continuously, which wind power alone can't do, the capital cost comes down.
The scale of ICE’s onshore installations would be unprecedented. Its first project, the 26-gigawatt Australian Renewable Energy Hub (AREH), would occupy a 2,500-square-mile parcel of desert in Western Australia. This gigantic $36 billion plant would make about 10 million tons of green ammonia per year – enough to power 200 large container ships, according to ICE Co-Founder and Managing Director Alicia Eastman.
That isn't nearly enough to fuel every ship, but AREH is ICE's smallest proposal. It’s planning three bigger developments at sites around the world. Eastman says that’s just the beginning of a much larger global market: "We think the conditions at our sites will offer the most competitive prices, but there's room for hundreds of other projects like ours because the demand is going to be so much more." (Australian mining giant Fortescue recently announced plans to develop 235 gigawatts’ worth of similar green hydrogen and green ammonia projects, ten times bigger than AREH.)
In a recent interview on the Global Optimism podcast, Maersk CEO Søren Skou said the number-one ocean carrier will begin ordering a variety of carbon-neutral container ships as early as 2023: “A ship has a life expectancy of between 20 and 25 years, so we need to start replacing ships by 2030 in order to be ready in 2050.”
That aligns with ICE's project timeline, and Eastman says the fuel supply will be ready when it’s needed: “I would encourage shipowners to move forward with using ammonia because we’re going to be there for them. They don’t have to worry about it.”
Nonetheless, shipowners might find themselves bidding against shoreside industries for a finite new energy supply. The same hydrogen molecules that could be used to make bunker fuel could also be sold to utilities, airlines, manufacturers and chemical producers, which are all under pressure to decarbonize on the same timeline. British Airways has never had a need for HFO, but it’s very interested in green hydrogen.
New Scrubber Technology
Until zero-carbon technology displaces the last fossil-fueled engine, marine scrubbers will play a significant role – and not just for SOx emissions.
New scrubber orders have all but evaporated since the beginning of the pandemic, says Nick Confuorto, President & COO of CR Ocean Engineering, but the market will likely bounce back as the economics of using HFO improve. The only real obstacle may be compliance risk.
Some regulators have expressed concerns about the contents of open-loop scrubber washwater, which contains the same substances that would ordinarily exit the stack. CR Ocean has a new solution to address this question – an Oberlin pressure filter system that removes almost all solids from the washwater, making cakes of contaminates for disposal and leaving behind a far cleaner discharge stream.
Confuorto says CR Ocean is also developing an after-treatment system that will remove fine particulates from the exhaust, adding a pollution abatement capability lacking in wet scrubbers. He sees these investments as a way to get ahead of future requirements and prepare his company for change: "I think we can expect that at some point there will be stricter regulations on washwater. We will also see new scrutiny of fine particulates and black carbon, which are already being discussed in Europe and at the IMO.”
Austrian company ANDRITZ also sees value in targeting fine particulate matter. Its SOx dry scrubber removes 99.9 percent of particulate matter from the exhaust stream, according to Business Development Manager Rene Schoeberl, including almost all of the health-hazardous PM 2.5 and PM 1. With the addition of an optional SCR (selective catalytic reduction) system, it can scrub NOx down to Tier III-compliant levels.
ANDRITZ offers two options for filtration: SeaSOx Dual Filtration (a dry scrubber system that removes SOx and PM) and SeaSOx Multi Filtration (removes SOx, PM and NOx). The Dual Filtration scrubber has been installed aboard the French ropax ferry Piana, which serves a regular route between Marseille and Corsica.
The system is advantageous for vessels that spend their careers in ECA zones, coastal waters and seaports: There’s no washwater discharge, and the near-elimination of PM aligns well with regulators' air quality goals.
In partnership with a North American seaport, ANDRITZ is working on a barge-mounted system that could be deployed to capture a ship's emissions in port, comparable to the "sock-on-a-stack" bonnet system found at the Port of Los Angeles. The idea is that ANDRITZ's dry scrubber-plus-SCR system would capture the trifecta of pollutants that matter most to port communities – SOx, PM and NOx – without any effluent discharge. This solution may cost the port less than building the infrastructure for shore power, says Global Product Manager Martin Koller, and it would also work for ships at anchor.
Like CR Ocean’s Confuorto, Koller thinks scrubber manufacturers have an opportunity to help shipping transition to a zero-carbon future. ANDRITZ is currently working with a Norwegian research team on an onboard CO2 capture and storage system that would absorb and liquefy about half the CO2 in the ship's exhaust stream.
Every ton of fuel makes three tons of CO2. Since storing it all would take up a lot of weight and space, his team thinks capturing a portion of it would be a more practical approach. “Of course, I think the future is in alternative fuels,” Koller says. “We don't yet know which one will be ‘number one,’ and in the shorter term I think you need a transition technology like CO2 capture. In my opinion, it's very promising." – MarEx
Paul Benecki is The Maritime Executive’s News Editor.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.