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The unlikely champion and the rise of the Zero Emissions ship (ZES)

With 90,000 vessels trading all over the globe, it is difficult to imagine that any single development could, over the lifespan of a ship, make almost every one of them obsolete and destined for a chapter in the annals of maritime history. However, this is the unescapable fate for the venerable hard-working diesel plant that we have all come to depend on, regardless of its time polished rods, or ultra-modern all encased shiny blue paintwork, the two or four stroke diesel is soon to be a thing of the past.

Before we get all dewy eyed and nostalgic for that Sulzer that saw you through thick and thin or the MAN that lulled you to sleep as it ran and shocked you awake when it changed pitch or, god forbid, shut down, It is worth considering the previous such visceral attachments that mariners through time have seen come and go, and why they came and eventually went.

Sail as a lone propulsion method was of course at the whims of the very elements it harnessed and so scheduling arrivals was a true feat of mastery and mystery. Combining sail and steam was a logical half step which was highly successful even in the days when the steam engine was not well developed and often suffered from failures. The design of these ships kept the essence of both propulsion systems well accommodated so they could make good way with either if so, required hence ensuring the failings of either the wind or the iron could be compensated for and the customers at the quay side would not be unduly inconvenienced.

Steam ate coal and the same advances in mechanical production gave the iron topsail a new diet of black gold. The time of fuel oil was the new era of smaller crews, higher speeds and larger and larger ships. Today we have already seen a 600,000 Dwt vessel and a 25,000 teu, running 60 Mw engines and ships running at 28knots to bring plastic doodads from one side of the planet to the other in some cases to be twisted and tied and then sent back to where they first came from. It’s a modern phenomenon that the logic of unimaginable waste is legitimized by excess capacity and low price.

The IMO, moving at its normal, deferential, glacial pace has finally stepped up to the challenge that was first tabled in the 1960s. And is leading the “charge” to a brighter less polluted tomorrow, or perhaps a couple of weeks after tomorrow, by enshrining the objective to reduce the Carbon discharge from the shipping industry by at least 50% by 2050! The date of 2050 is contentious in its self as it is still a full thirty years from today and the average commercial ship is built for a service life of 20 years therefore even a ship built and launched this very afternoon will be scrapped 10 years before the 2050 rule comes into effect.

Another sleight of hand with the 2050 rule is the reference point from which it is drawn. In 2008 the world economy was just starting to feel the effects of the great recession, ships were running full and at high speeds and relatively unconcerned about the fuel costs. This led to one of the highest years for heavy fuel oil use in the shipping industry. After 2008 ships used less fuel by a combination of low demand due to the near global meltdown and by slow steaming to reduce fuel consumption and keep the rapidly declining number of shipping companies from slipping underwater.

A third factor came greatly into focus as the world economy ground through the mud and bad debt of the recession, in the shape of the change in typical ownership of vessels. No longer were the banks involved the traditional shipping banks that knew the cycles of the industry or the transience of trading, but now came the Highstreet banks and investment houses eager to find places to invest their now toxic Non-housing capital. The big new shipping banks invested heavily in shipping assets and continued to pour money into the shipping companies long after the conventional shipping bank’s insight had told them to quit and run for cover.

Yes, shipping suffered, companies that were over a hundred years in business were wiped away and histories were swapped for trivial value just to stay afloat. The banking industry held the power of life or debt and the new era of shipping was born, unseen, unheard and unbeknownst to even the most diligent of Blog addicts. The track was set in motion to the Zero Emissions Ship.

It is ironic but often the case that when a change takes place for reasons that are felt to be horrific at the time, they can be the most beneficial for the long run. And so, it is in the maritime space too.

With the exception of the galley stove, ships during the golden age of sail emitted almost nothing to the atmosphere. Ships mostly got to where they were meant to go. And until a second propulsive arrangement was in place, they could not hold to a schedule.
This has changed and changed radically.

There are highly developed systems today to propel ships with electrical power derived from many sources, to store that power in many forms and materials, and to use it through completely clean systems to produce propulsion. Add these to the obvious wind power and a completely emission free ship is born.

10Mw banks of Fuel cells are in use on shore right now, Electrolysis of water to produce hydrogen through both high efficiency electrolysis and even certain types of minerals, or production from waste metals are all available right now. This is not science fiction but science fact. The complete zero emissions ship is spread out in kit form all around the world and with the ingenuity of talented naval architects who will incorporate air lubrication, drive fins and low block coefficient hulls, regenerative propellers, even Nano-steel plating it is beyond doubt that the whole ship is already here, some assembly required.

So, what guarantees the move forward and when will it happen, I hear you ask, and its not an unreasonable question.

The guarantee comes as a direct result of the modern investment banking system’s injecting themselves into the shipping world almost to the complete exclusion of the more highly aware traditional shipping banks. Let’s look at the world they way they do for a moment. Ship owner wished to borrow money for a new conventionally powered bulk carrier or tanker. He requires $x million and will purchase a neat ship to which the bank will have first rights should anything go astray with the business or any unforeseen problems.

What would the banks position be if our hardy shipowner were to approach the same bank when a single Zero Emissions ship were to be in service at the same time? The cost of the conventional Fossil fuel burner would be the same, but would its value be the same if the bank needed to recover its liability from the disposal of the asset?

It is more likely that the bank would insist that the ship be the newer type, the ones that don’t need fuel, the ones that will not need to be continually updated to comply to an increasingly more restrictive fuel use and more expensive add ons to reduce emissions, all the paperwork and reports, the fuel tests, the inspections etc. etc. …. But most importantly the high running cost.

The Banks the lenders they will dictate the rapidity of the conversion of the fleet.

But when?
This too has a rather simple answer. As soon as the first ZES is trading, the first year of hitting her schedule, the first time since the early 1900s that a ship will show a null value on the ledger for Fuel used. And that day is not far off.

The IMO have stood firm on NOX, and SOX and there is no reason to believe that Carbon will not be exactly the same. This reassurance to the banking community will be the driving force that cements their reluctance to invest in conventional Diesel and speeds up the march into technologically advanced propulsion. Asset value and the trading bottom line go very much hand in hand in the new shipping era.

The Age of the ZES.
Source: Eric J Holohan, CTO Green Framework LLC

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