Decarbonisation of the shipping industry by 2050: opportunities and challenges in market-based measures

Prithviraj Raorane,

DES SNFLC

Introduction-

The International Maritime Organization has set a target to hit Net Zero by or around 2050. Here Net Zero signifies the decarbonisation of shipping industry. The global trade relies heavily on shipping sector as 90% of world’s cargo is carries by 5000 Merchant vessels alone. Shipping industry is the most important transport sector globally, as it accounts for the trade of 11 billion goods across the world each year, still it is the least reformed transport sector as no significant reforms has been made to lower the carbon emissions from this industry. One of these ships could burn more than 100 tonnes of fuel per day. Ocean going ships like heavy oil tankers, merchant vessels, bulk carriers, container ships amount to total 11% of total greenhouse gases of the world, and these are projected to double by 2050. More than 3% of carbon emissions are from the ocean-going ships. Maersk,the world’s largest shipping company with around 17.6% of total market share of container transport has 786 gigantic ships. These ships last 20-30 years, so it is important for us to convert these ships into carbon neutral technology when the time comes.

The need for reforms-

While governments and the companies had made extensive efforts in bringing down the pollution caused by petrol and diesel vehicles, not much efforts had been made in the shipping industry, mainly because it is governed by international community and where decision making takes a lot of time. The industry only started to think of reforms when the global warming actually started to hit them too, the sea storms and adverse weather conditions damaged a significant number of ships. To make situations worse the global wars and international terrorism has resulted into blockage of some of the most important choke points of the sea routes, because of which the ships have to travel a long distance to deliver goods causing more carbon emissions. The red sea crisis has already shown the impact of international wars on global trade. When the ships were at the threat to pass through the Suez Canal from the red sea, they decided to go through the cape of good hope which added more 8900 km to the shipping route, taking more time and burning more fuel. Though there are several diplomatic efforts, technological advancements and strategic alliances to mitigate the risks of sea route blockages, there still needs a better legal framework and mechanism to address this issue.

Five approaches for Decarbonisation-

The initial stage of the decarbonisation, according to the agreement is to reduce the carbon emissions by 40% by 2030.  The international council on transportation has identified 5 approaches through which the goal of net zero by 2050 could be achieved. The first one is to slow the ships down to save fuel, surprisingly this technique works and it was already practised in 2008-2009 when there was global financial crisis. It was expected that as growth resumed and traffic picked up, maritime shipping companies would return to normal cruising speeds. However, because of higher fossil fuel prices, maritime shipping companies are opting for slow steaming for cost-cutting purposes but using the environmental agenda to justify them further. The normal cruising speed is of 20-25 knots which is 37-45 km/hr, while the slow steaming speed is 18-20 knots which amounts to 33-37 km/hr. This slow speed is likely to be adopted by many shipping companies, as more than 50% of the ships in 2011 adopted this method. The second method is to improve logistics to avoid port delays. Several alternatives sea routes and trail have been developed to lessen the burden of existing busiest sea routes like Suez Canalor Strait of Hormuz. For the Strait of Hormuz, UAE has developed the Habshan-Fujairah oil pipeline, this bypasses the Strait of Hormuz, providing a secure export route for UAE oil. The China’s silk route and India’s North-South transport corridor provides a land alternative to Suez Canal. The 3rd approach is to develop high energy retrofit ships, wind assisted propulsion and hull air lubrication. Recently developed, the wind challenger developed by Japan is the first coal carrier, it converts the wind energy directly to vessel propulsion force. The added propulsion force reduces the consumption of fuel while maintaining the speed of the vessel. It is anticipated that by using rotor sails and the Wind challenger together will reduce the green house emission by 20% on average. The wind assisted propulsion system has already delivered fuel savings between 4%-9.5% and has the potential to save up to 25%. The fourth approach is to use hybrid electric ships. By combining traditional engines with electric propulsion, vessels save fuel and operate at optimum point as well. One of the additional advantages of this is, it is cost friendly, requires less maintenance, causes less noise pollution. There still needs technological advancement in this field as the batteries degrade overtime, they take a lot of space and there is limited battery infrastructure to support this industry. The fifth approach is to use low-emission fuels such as biofuels from waste and renewable hydrogen, using hydrogen as a energy resource will also mitigate the risk of oil spills The UN backed one ocean summit has presented a new prototype energy absorber-2 which has power to decarbonise 1’/3rdof the world’s existing fleet, it is powered by liquified hydrogen produced on land. A study shows that almost all the ships going from China to USA could be powered by hydrogen fuel cells. The hype of hydrogen energy is because the byproduct of hydrogen is water, but problem is about 90% of hydrogen that is produced today is grey hydrogen, which basically means that it is mainly made from fossil fuels. If we want to use hydrogen as clean fuel, we first need to clean up its production process. Another challenge about hydrogen is its density, it has relatively low density than natural gas, we need about 3 times more space to store the same amount of punch compared to natural gas. To put these numbers into shipping industry still looks pretty difficult as vast majority of the ships would first require to increase their storage capacity in big numbers.

Conclusion-

Overall, looking at the current scenario, it may be said that the goal to decarbonise the entire shipping industry by 2050 is difficult to achieve but right now the top most priority of majority of the stakeholders is also to limit the global warming by 1.5°C. The governing bodies and the policy makers should take fast and appropriate decisions to limit the carbon emissions according to the current prescribed limit in the agreement. Renewable power fuels appear to be the most promising renewable fuels, particularly e-ammonia. As the cost of renewable energy continues to fall, electrolysers and H2 storage costs are also falling progressively, renewable ammonia is set to become the future for decarbonising international shipping in the medium and long term. Ammonia is already been used in certain ships for zero emissions, it is also said to be the green fuel of the future. Finally, for the reduction of CO2 gas, the largest company i.e. Maersk has already started using methanol. It is to be noted that methanol is only efficient at lowering the Co2 levels if it is obtained from the renewable energysource. Almost every fuel has its own disadvantage but with technological advancements it is very much possible to achieve net zero by 2050.

References: -

1)Gabriel Castellanos, Roland Roesch and Aidan Sloan, International renewable energy agency, A pathway to decarbonise the shipping sector by 2050,IRENA (2021)-  https://www.irena.org/- /media/Files/IRENA/Agency/Publication/2021/Oct/IRENA_Decarbonising_Shipping_2021.pdf

2)Ingrid Sidenvall Jegou et al, Net-zero by 2050: Achieving shipping decarbonization through industry momentum and the new ambition at IMO,UN trade and development- https://unctad.org/news/transport-newsletter-article-no-108-net-zero-by-2050

3)YouTube,The international council of clean transport, Vision 2050: Addressing emissions from global shipping

- https://www.youtube.com/watch?v=mmO4RM3XXdk