Most of the clothes and gadgets you buy in stores today were once in shipping containers that sailed across the ocean. Sailing ships more than 80% of the world’s traded goods. But they have a problem: the majority of them burn heavy sulfur fuel oil, which is a driver of climate change.
Whereas the engines of cargo ships do become more efficient over time, the industry is under increasing pressure to eliminate its carbon footprint.
The Parliament of the European Union voted this year to a 80% reduction in the greenhouse gas intensity of marine fuels by 2050 and to require shipping companies to pay for the greenhouse gases emitted by their ships. The International Maritime Organization, the United Nations agency that regulates international shipping, is also planning strengthen its climate strategy this summer. The IMO’s current target is to reduce shipping emissions by 50% by 2050. President Joe Biden said on April 20, 2023 that the US strive for a new international goal of zero emissions instead by 2050.
We asked a researcher in the maritime industry Don Maier if the industry can meet those stricter targets.
Why is it so hard for the shipping industry to move away from fossil fuels?
Economy and the ship life are two main reasons.
Most major shippers’ fleets are less than 20 years old, but even the newer ships don’t necessarily have the most advanced technology. It will take about a year and a half to come out with a new build ship, and it will still be based on technology from a few years ago. Most engines therefore still run on fossil fuel oil.
If companies do buy ships that run on alternative fuels, such as hydrogen, methanol and ammonia, they run into another challenge: there are only a few ports until now with the infrastructure to supply those fuels. Without a way to refuel at all the ports a ship might use, companies will lose their return on investment, so they will keep using the same technology instead of.
It is not necessary that the maritime industry does not want to move towards cleaner fuels. But their assets – their fleets – were bought with longevity and alternative fuels in mind are not yet available everywhere.
Ships be built which can run on liquefied natural gas (LNG) and methanol, and even hydrogen will come online. Often these are dual fuel – ships that can run on alternative fuels as well as on fossil fuels. But so far too few ships of this type have been ordered to make the costs financially justified for most builders or buyers.
Costs of alternative fuels, such as methanol and hydrogen fuels made with renewable energy (as opposed to made with natural gas), are also silent significantly higher than fuel oil or LNG. But the good news is that those costs are there starting Unpleasant reject. As production increases, emissions will fall further.
Can stricter regulation and carbon pricing effectively drive industry change?
A little pressure on the industry can be helpful, but too much, too soon, can really make things more disruptive.
Like most industries, shipping companies want standardized rules that they can count on not changing next year. Some of these companies have invested millions of dollars in new ships in recent years, and now they are being told that those ships may not meet the new standards – even though the ships are almost brand new.
Another concern about the EU’s moves is whether it understands all the ‘what if’ scenarios. For example, if the EU has stricter rules than other countries, which affects which ships companies can use on European routes. All the ships they have on board routes to Europe will have to meet those emission standards. If there is more demand for products in Europe, they may have fewer ships to use.
I think the change will soon come in the industrybut changes are necessary make financial sense also for the shipping companies and their customers.
Economists have estimated that the cost of cutting emissions by 50% by 2050 will come from everywhere 1 trillion dollars to, more realistically, more than 3 trillion dollars, and full decarbonization would be even higher. Much of that cost will be passed on to charterers, shippers and ultimately consumers – so you and me.
Are there ways companies can reduce emissions now as they prepare to upgrade their fleets?
There are a number of options that shipping companies are now using to reduce emissions.
One that has been used for at least 10 years is wells higher quality paint on the hulls, which reduces the friction between the hull and the water. With less friction, the engine doesn’t work as hard, which reduces emissions.
Another is slow speed. When ships travel at higher speeds, their engines work harder, using more fuel and emitting more emissions. So shippers will use steam slowly. Usually, ships will move slowly when they are close to shore to reduce the emissions that smog creates in port cities like Los Angeles. On the open ocean, they return to normal speed.
Another commonly used option in the US and Europe is to turn off the ship’s engines in the harbor and connect to the electricity of the port. It is called ‘cold ironing’. It prevents more of the ship’s fuel from being burned, which affects air quality. The Ports of Los Angeles and Long Beach, where smog from idling ships has been a health concern, has been a major driver of electrification. It is also less expensive for shipping companies than to burn their fuel in the port.
As simple as those may sound, they made massive improvements in emissionsbut she are not enough in themselves.
Will a higher target from the IMO be enough to pressure the industry to change?
I used to work in the shipping industry and I know that the maritime industry is a very old fashioned industry centuries ago. But the industry has invested millions in recent years in new ships with the most effective technology available.
When the IMO began requiring all ships using heavy fuel in world trade to switch to low-sulphur fuel, the industry revolves around complying with the rule, even though retrofits were costly and time consuming. Many shipping companies complied by installing ‘scrubbers’ that essentially filter the ship’s engine, and new ships were built to run on low-sulphur fuel oil.
Now the industry is being told that standards are changing again.
All industries want consistency so that they can be sure that they are investing in a new technology. The shipping companies will follow what the IMO says. They will push back, but they will still do it. That’s partly because of the IMO supports the maritime industryat.