While gas may not be the perfect solution, shipping must make progress now to meet IMO’s ambitious emissions targets
Shipping is the most carbon-efficient form of long-haul cargo transportation, far outpacing road, rail and airline in terms of grams of CO2e per tonne km. Nevertheless, it is clear from the Fourth IMO Greenhouse Gas (GHG) Study, released in July, that shipping has a lot of work still to do to reach its decarbonisation ambitions – and some difficult choices lie ahead.
The study reports that shipping’s total CO2 emissions increased 9.3% from 2012 to 2018, rising from 962M tonnes to 1,056M tonnes in 2018. Total GHG emissions – including CO2, methane, and NOx – expressed as CO2e, jumped 9.6%, climbing from 977M tonnes in 2012 to 1,076M tonnes in 2018.
Overall, shipping’s share of global human-made emissions increased from 2.76% in 2012 to 2.89% in 2018.
It’s a daunting task, but shipping needs to make progress now to meet IMO’s ambitious decarbonisation targets – a 40% reduction in carbon-intensity by 2030, while pursuing efforts towards 70% by 2050.
“We are advocating gas as the first step in this journey,” said DNV GL Maritime chief executive Knut Ørbeck-Nilssen, following the release of DNV GL’s Maritime Forecast 2050, Energy Transition Outlook 2020. “However, we are also saying that we should carefully examine different opportunities and not neglect options just because they are not available in this decade or the next,” adds Mr Ørbeck-Nilssen.
“Localism spells a lot of trouble for international shipping”
One of the key takeaways from the study is that installing a dual-fuel LNG engine and fuel system “is consistently the most robust choice” for preparing shipping for a decarbonised future.
“Gas is the best choice for one or two vessel generations,” said Mr Ørbeck-Nilssen, noting that this includes both LNG and liquefied petroleum gas (LPG).
By starting with a dual-fuel engine and fueling system, shipowners have the possibility of transitioning to ‘drop-in’ lower carbon intensity future fuels. The study says that “picking the wrong solution can lead to significant competitive disadvantage.” It states: “Planning for fuel flexibility could ease the transition and minimise the risk of investing in stranded assets.”
LNG has been gaining traction since the enactment of the IMO 2020 0.50% sulphur cap. LNG-fueled ships represent less than 1% of the operational fleet, but alternative fuels – including LNG – represent almost 10% of newbuilds.
DNV GL lead author for the study, Tore Longva, said the use of LNG as a fuel, in combination with energy efficiency gains and speed reductions, would support a 20% reduction in CO2 emissions. “It is a fairly good option for the first generation of ships,” he said.
As evidenced by DNV GL’s study, the path to decarbonisation is long and complex, requiring massive investment at a time when few shipowners can least afford it.
For some, that journey to decarbonisation is taking too long, as evidenced by the European Parliament’s actions in September regarding including shipping in an EU Emissions Trading System.
Calling the action by the EU “a curveball”, Mr Ørbeck-Nilssen noted: “Shipping is a very international business and it’s almost impossible for shipowners to deal with a patchwork of local or regional legislation. This localism spells a lot of trouble for international shipping. I see the rationale for some local authorities; they are trying to speed up the processes, but the danger is that they are not creating a level playing field. By doing that they are in fact penalising a lot of regional shipowners that reside or trade in that area.”
While LNG is not the perfect solution, said Mr Ørbeck-Nilssen, it is a good one. Shipping needs to make progress now to meet IMO’s ambitious targets. Quoting Voltaire, Mr Ørbeck-Nilssen said: “Perfect is the enemy of good.”