Switch to alternative fuels “relentless and inevitable”
Anyone paying attention to greenhouse gas (GHG) negotiations at the International Maritime Organization (IMO) knows that shipping must move toward a zero-carbon future. The questions that are subject to intense negotiations and speculation are “when?” and “how?”.
The “when” is both a political and practical question, linked to the “how” which in turn depends on development of new fuels and technology combined with regulatory and policy instruments. Without the latter, there will be little or no financial incentive to help with the transition to zero-carbon shipping because new energy solutions are, at least today, uncompetitive with traditional fuel and propulsion systems. Improved energy efficiency, which can help pay for itself thanks to fuel savings, will not be enough to meet the longer term goal of zero-carbon shipping.
For those of us that follow GHG negotiations at the IMO, like IBIA’s secretariat does, it wasn’t a huge shock when Simon Bennett, Director of Policy at the International Chamber of Shipping (ICS) told the Platts’ Mediterranean marine bunker fuel conference in Athens on November 30 that bunker suppliers should anticipate that there may no longer be significant demand for fossil fuels from shipping within as little as 25 years, if not sooner.
He said the sector is on an inevitable trajectory towards a future of zero CO2 emissions, because “the momentum created by the Paris Agreement on climate change means that the wholesale switch to alternative fuels and propulsion systems will be relentless and inevitable”.
ICS also put out a press release on the day Bennett delivered his speech at the Platts conference, announcing that “Bunker suppliers must prepare for the death of fossil fuels in shipping”.
The writing is on the wall, and as IBIA has said before: The signal is clear: IMO will come up with a framework to set shipping on a pathway to decarbonisation in the second half of the century. It is even possible that IMO policies already put in place may mean that shipping’s fossil fuel consumption peaked already in 2008, even though most studies and predictions we have seen suggest that growth in trade will outpace efficiency gains and cause bunker sales to grow again.
ICS and other shipping organisations are proactively trying to shape IMO’s GHG policy as the organisation struggles to reach consensus on a comprehensive strategy for addressing CO2 emissions from shipping, scheduled to be adopted in April 2018.
Among the proposals from the shipping sector is that IMO Member States should agree that the initial goal should be to hold the entire sector’s total CO2 emissions below 2008 levels.
Beyond that, they have also suggested that the IMO should set a sectoral CO2 reduction target by 2050, similar to the nationally determined contributions (NDCs) that all countries that are parties to the Paris Agreement will prepare in time for the Conference of the Parties (COP) meeting in late 2018.
ICS noted that the most challenging area in the IMO negotiations is agreement on the levels of ambition for CO2 reduction, by the sector as a whole. Or in other words, the “when” question.
As for the “how” question, Bennett said the transition to zero-carbon fuels and propulsion “will happen as soon as the technology and bunkering infrastructure permits, which ICS is confident it eventually will, whether using fuel cells or batteries powered by renewable energy, technologies such as hydrogen or some other solution we can’t yet anticipate.”
A study has just been released that aims to demonstrate the viability of zero emission vessels (ZEVs) – identifying what needs to be in place to make them a competitive solution for decarbonisation.
Lloyd’s Register (LR) and University Maritime Advisory Services (UMAS) have released ‘Zero Emission Vessels 2030’. It says that for shipping to deliver an ambitious reduction strategy in line with the Paris Agreement, “ZEVs will need to be entering the fleet in 2030 and form a significant proportion of newbuilds from then on.”
The press release announcing the study notes: “Although none of the ZEVs are estimated to be more competitive than conventional shipping by 2030, the technology options are evolving rapidly and it’s possible that over the next 10 years the gap could reduce even further than this study estimates. If this gap does not close then there may be a need for regulatory intervention in the near future, to drive the viability compared to conventional fossil fuels.”
To download a PDF of the study go to info.lr.org/zev2030
Meanwhile, the shipping and bunker industry is more preoccupied with the more immediate concern of the fuel sulphur limit reduction to no more than 0.50% required from the start of 2020. This is expected to lead to a huge increase in bunker costs and will incentivise fuel efficiency measures, which can in turn help keep the sector’s CO2 emissions in check.
Report by Unni Einemo