Shipping Needs To Find The Optimal Mix Of Technical And Operational Measures And Innovative Solutions To Decarbonise’ Says BRS In Their Annual Review

As the shipping industry continues along its long road to decarbonization, it ‘needs to find the optimal mix of technical and operational measures and innovative solutions’ but ‘could do the necessary now and show its leadership by simply adopting slow steaming’ BRS argues, in their Annual Review of Shipping and Shipbuilding Markets released today.

Last year was one of the most volatile in living memory as a rallying global economy led to winners and losers across the shipping industry. The BRS Annual Review takes stock of where shipping markets now are and the impact that last year has had on the industry’s push towards decarbonization.

As usual, the review provides specific analysis of all the major sectors: Shipbuilding, Dry Bulk, Tanker, Chemical, LNG, LPG, Offshore, Ship finance, Cruise, Containership, Car Carrier, MPP and Ro-Ro. This year, the Review includes a chapter dedicated to Carbon Markets, a subject which is becoming of paramount importance to the shipping community.

We Can Do It Now!
2021 was both an exciting and a dramatic year. Twelve months ago, I was hopeful that our pandemicinduced trials would be behind us by early 2022. Unfortunately, we will have to be patient and surf on a few additional variant waves before they subside for good. All historical plagues stopped at a certain point in time. ‘Spanish Influenza’ started in March 1918 and ended in July 1921. Let’s be optimistic!

Green House Gas (GHG) emissions and their elimination comprised the overriding theme of the year. There is a palpable urgency across the world to seriously engage in the fight against climate change in which every industry is involved and bears its own responsibility. Based on IMO data, the volume of marine fuels (HFO, MGO, MDO, LNG, LPG and methanol) consumed has remained extraordinarily stable since 2008 oscillating between 310 and 340 m tonnes of oil equivalent despite the merchant fleet doubling in size from 1,108 m dwt (or 30,864 ships) to 2,072 m dwt (or 40,588 ships). This probably reflects two factors. Firstly, a reduction in service speed, especially for large container carriers going from 22-25 knots prior 2008 to 18-20 knots or less. Secondly, the fruits of the ‘eco-revolution’ that took place in naval architecture in the early 2010s allowing a reduction of 20-40% in the daily fuel consumption of newbuildings.

The IMO still envisages cuts of 70% to CO2 and 50% to GHG emissions by 2050, when compared to 2008 levels. Furthermore, it has mandated an intermediate milestone of cutting CO2 emissions by 40% by 2030, although ships are typically designed and built to last for 30 years. Quite a conundrum! To reach these IMO goals, the shipping industry needs to find the optimal mix of technical and operational measures and innovative solutions.

But the shipping industry could do the necessary now and show its leadership by simply adopting slow steaming. A 20% reduction in service speed would result immediately into a 50% drop in CO2 and GHG emissions. We could go one step further and reduce the design service speeds of bulkers and tankers from about 13-14 kt to about 11-12 kt and of container carriers from 18-20 kt to 13-14 kt. Yes, we might need some additional tonnage to cope with the reduction of speed but before coming to that point we could also further optimize ships (main engine, propeller, auxiliaries), adopt higher bloc-coefficients and larger deadweight, design smaller engine rooms and develop enlarged cargo capacity.

We could also search for better logistical efficiencies resulting in more consistent speed profiles. It is heart-breaking to witness ships sailing at full speed only to slow down and wait for days/weeks/ months especially in 2021 before delivering their cargo or crossing oceans in ballast at full speed. We could also envisage more flexible ships capable of always being loaded such as new Oil Bulk Ore carriers (OBO) to avoid large bulkers and tankers sailing empty 50% of the time. The shipping industry must show real leadership and reinvent itself. Strangely, if global consensus leads to the fundamental and swift termination of fossil fuels, the main issue for the shipping community in the next thirty years will not really be the reduction of emissions from ships. The phasing out of fossil fuels (coal, oil, gas) which account for 40% of cargo transported by sea will have a much greater impact on shipping activities as we know them.

There is no historical precedent in the maritime industry for the simultaneous termination of multiple commodities (coking coal, steam coal, crude oil, petroleum products, LNG, LPG) apart from the crude oil crisis of the late 1970s which stopped the construction of super tankers and sent much of the tanker fleet directly from shipyards to scrap yards. In actuality, it is hard to say that the switch away from fossil fuels is accelerating. Apart from the downwards blip in 2020 when the global economy almost stopped, volumes of coal, oil and gas transported by sea have increased rather than decreased over the past decade. Phasing down will probably be the chosen path rather than an abrupt phasing out. The realpolitik that emanated from COP26 clearly showed that developing countries are not going to trade-off economic growth for lower emissions, or at least not yet. Therefore, as developing economies grow, fossil fuels will continue to ‘peak’ in the years to come.

There will be an eventual phasing out of fossil fuels: coal will disappear first but will be substituted with gas which could slightly outlive crude oil. We have to hope that science and technology will save us from these vicissitudes and bring us a completely novel solution unknown today. If you asked a postman in the 19th century how to speed up letter delivery he would have asked for a speedier horse and never contemplated the concept of email. As we wait for the required quantum leap in innovation, the shipping industry can show its leadership and bring the 330 m tonnes of marine fuel consumed per year (or about 1 billion tonnes CO2 released into the atmosphere!) down to 165 m tonnes (or about 500 m tonnes CO2) almost overnight, which incidentally still remains too high. This makes all current developments in dual fuels whatever they are (natural gas, biogas, e-methane, e-methanol, ammonia, hydrogen etc) and alternative propulsion truly imperative and in merit of being pursued with great determination
You can read the annual review here
Source: BRS Group