Decarbonizing Cargo

A green wave builds in the lagging shipping sector

Photo © Perry Fiedler

The world’s first electric-powered cargo ship was launched in China last year for short voyages up and down the Pearl River. Its cargo: coal. Hidden behind the glaring irony is another story – the world needs more low-carbon ships to haul every type of cargo.

Despite being the most energy efficient way to move cargo, greenhouse gases from marine shipping account for two per cent of global emissions. International shipping is set to spike in coming decades, driven largely by a growing consumer class in China and India. In a business-as-usual scenario, shipping could cause 17% of global emissions by 2050. The shipping sector was left out of the Paris Climate Accord, and is now in the spotlight for lagging in the push to decarbonize. To meet goals consistent with the Paris Accord, shipping must forego incremental improvements and embrace disruptive change and new technologies at an eye-watering pace.

Dr. Jane Lister, director of research for the International Green Shipping Network, explains that historically shipping has had no appetite for change, and the industry’s old guard have resisted attempts to reduce its carbon footprint. Further slowing progress is the lacklustre leadership of the UN’s International Maritime Organization (IMO), the global regulatory body for shipping. However, a growing faction within the industry is tired of waiting, including container shipping giant Maersk, and is pressing for action. “Pressure is mounting,” says Lister. “Certain companies recognize the long-term business value of innovating, and those tend to be the companies that are around the longest.”

“The shipping sector was left out of the Paris Climate Accord, and is now in the spotlight for lagging in the push to decarbonize.”

In this environment, a number of non-government think tanks have cropped up to advance plans to decarbonize. They have created rating schemes for ship efficiency and programs to share best environmental practices. Ship efficiency ratings are intended to breed competition in the marketplace by auditing and ranking ships by their carbon emissions. Efficient vessels could be rewarded with better contracts, and reduced fees and priority service at ports and canals. Lister sees an opportunity for the IMO to meta-govern these private initiatives and harness them to influence policy, raising the bar for the whole sector.

Retail cargo owners represent a 15 trillion dollar industry and have considerable leverage to influence transport carbon emissions. Many of the largest cargo owners are multinational brands with familiar names such as Walmart, Target, and Home Depot. Retailers looking to green-up their supply chains can insist on vessels that score highly on one of the ship rating programs.

While think tanks and cargo owners are able to exert pressure, the IMO is the only agency able to mandate reforms to the world’s cargo fleet. The IMO has become more politicized as concern over climate change has grown, and has been criticized for catering to corporate interests. Industry is heavily represented at the IMO with agents from shipping companies, cruise lines, and even mining companies acting in an advisory role to member nations. The IMO has refuted accusations of undue influence, saying corporate counsel is appropriate for such a specialized sector. While Lister stops short of saying that the IMO is under corporate control, she does say corporate interests have been privileged in the IMO dialogue, “no question.”

 

Solutions?

The IMO has ratified two pieces of legislation aimed at curbing air pollution. The first is a phase-out, by 2020, of the high-sulphur bunker fuel used widely in large ships. Bunker fuel is the cheap and dirty sludge left after crude oil refining. It releases sulphur dioxide, nitrous oxide (a potent greenhouse gas), and sulphur particulates when burned, and is linked to an estimated 60,000 premature deaths yearly. Bunker fuel also emits black carbon – particles which speed global warming by absorbing solar radiation while floating in the air and by blanketing snow and ice.

The bunker fuel phase-out is a no-brainer and several countries, Canada included, are already in IMO zones prohibiting the use of high-sulphur fuel. The phase-out is spurring the adoption of liquefied natural gas (LNG) as a ship fuel. LNG, though free of sulphur and particulates, can leak methane. The beneficial effect of LNG on greenhouse gas emissions “from well to wake” depends on mitigating this “methane slip.” Lister points out that LNG is a transition fuel and not a climate solution.

The second IMO regulation is the Energy Efficiency Design Index (EEDI), which mandates efficient design specifications for new ship builds. One study by a UK consultancy describes the EEDI as unambitious and predicts that it will at best spur a three per cent increase in vessel efficiency by 2050.

“One instant and significant efficiency gain can be had by just easing off the gas pedal: ‘slow steaming’ – moving at reduced speeds – has been shown to reduce daily fuel consumption by 27% on average.”

If the IMO does take bold steps to reign in CO2, there is no shortage of emerging technologies to develop. Lithium ion batteries, hydrogen fuel cells and bio-fuels have all been put forward as primary propulsion concepts to wean global shipping off fossil fuels. Many of the other options are variations of wind power to assist the main propulsion. Tech companies developing wing-like hard sails, kite sails, and upright spinning cylinders called Flettner rotors – which harness a physics principle called the Magnus effect for propulsion – are all vying to establish their product as the go-to wind-power solution. Efficiency also lurks in surprising places: more sophisticated route-finding and logistics software can yield big gains. Other projects include hulls lubricated with a stream of air bubbles, hydrodynamic 3D printed parts, and advanced hull coatings to reduce drag.

None of the cutting-edge propulsion ideas have seen significant adoption, and most need more investment to develop to commercial scale.

One instant and significant efficiency gain can be had by just easing off the gas pedal: “slow steaming” – moving at reduced speeds – has been shown to reduce daily fuel consumption by 27% on average. Slow steaming sounds uncomplicated, but increased transit times require large changes through the supply chain and wide cooperation between shippers, cargo owners, ports, and warehousers.

Darryl Anderson, managing director of Wave Point Consulting, says widespread use of low-carbon ships is still a long way off. He predicts dual-fuel ships, burning both LNG and low-sulphur marine diesel oil, will be the industry’s first move. He also says that before new technologies are ready for deep-sea ships, they will need to be tested and refined on smaller coastal vessels.

 

“Hidden” industry at a crossroads

With an array of options to lower fuel bills, which can exceed half of operating costs, why aren’t shippers scrambling to increase efficiency?

Although it is tempting to paint less progressive shippers as a cabal of tycoons gleeful at delaying action on climate change, the truth is more nuanced. Anderson says that ship owners, operating in multiple jurisdictions with different regulations and standards, are hesitant to invest in such an uncertain environment. He says they are reluctant – not unyielding – to attempt carbon reforms. Similarly, no company wants to be the guinea pig first investing in unproven technology – bearing the risk and cost to the benefit of their competition.

Then there’s the fuel bill: cargo owners pay it, giving shippers less incentive to lower fuel use. Revenues in shipping are low, leaving some shipping companies cash-strapped and dreading any market upheaval. Finally, there is the inertia of an industry steeped in the way things have always been done. In this context change requires industry visionaries, or considerable pressure from the marketplace or an outside regulator.

“The IMO is at a crossroads: from an anemic wait-and-see approach, with only data collection until 2023, to an aggressive decarbonizing plan nicknamed the “Tony De Brum” declaration.”

Canada is a bit player in deep-sea shipping, with only a tiny fraction of the world fleet. Still, Canada’s ports receive ships from all over the world and some have incentivized higher efficiency shipping. The Vancouver Fraser Port Authority’s EcoAction program recognizes several ship rating schemes and offers discounts on docking fees for qualifying ships. “Cold ironing,” the term for plugging in ships at dock instead of idling generators, will be available this year for container ships at the Port of Vancouver. Canada also has a homegrown environmental program named Green Marine for ships, ports, and shipyards.

The growing contingent calling for change will be put to the test this April as the IMO meets to hash out a decarbonizing strategy. The IMO is at a crossroads: from an anemic wait-and-see approach, with only data collection until 2023, to an aggressive decarbonizing plan nicknamed the “Tony De Brum” declaration after the late Marshall Islands’ IMO delegate who championed it.

Lister is hopeful that the shipping sector has reached a tipping point. “We’re seeing new awareness,” she says, “It’s been a hidden sector up until now, and it’s in the spotlight, which is a good thing.”


Gavin MacRae is a writer suffering mild eco-anxiety as a side effect of recent fatherhood. He lives in Port Moody.

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