September 6, 2022

interteiment

Innovation Leader

Why we ought to be using today’s technology to fix tomorrow’s problems

We can’t risk being dragged back to business as usual while we wait for future fuels – now is the time to invest in efficiency, argues Sean McLaughlin, a strategy consultant with Houlder.

Amazon, Ikea, Unilever and Michelin are among nine multinational companies that have committed to switching all of their ocean freight to vessels powered by zero-carbon fuels by 2040. Clearly organisations, even beyond shipping, have their focus on future fuels rather than on what can be done today. Sean McLaughlin, Strategy Consultant, at design and engineering consultancy Houlder highlights the risks and rewards of looking at what can be done right now to achieve the same targets.

Michael Parker, chairman of the Poseidon Principles, has suggested that its ambitions will be raised from early 2022 – with speculation that they might align with calls for full decarbonisation by 2050, as pledged by many shipping companies in the Getting to Zero coalition. This is just one more indicator of the mounting pressure on shipping to meet more ambitious decarbonisation targets – targets that exceed those of the International Maritime Organization (IMO). With regulatory, consumer and financial pressures, there is no doubt that the industry needs to change, and rapidly, but it needs to happen using solutions available today and not wait.

The dawn of future fuels

The debate on shipping’s decarbonisation has so far mainly focused on the development of alternative fuels, such as hydrogen or ammonia. Undoubtedly, these new fuels will be essential to bring the sector to net zero, but they face a big challenges. Given the complexity of developing engines capable of using these fuels and more significantly the supply chains to distribute them, they are likely to take decades before they are ready to fully power the 50,000+ merchant ships that are trading today on the world’s oceans. Future fuels are the future – but to focus on them at the expense of the full range of solutions available risks shipping remaining stuck on a business-as-usual pathway until they scale up.

Given the urgency of the climate crisis, the world cannot wait for this. We can already see the devastating impacts of climate change, from unprecedented floods, fires and heatwaves to the accelerated melting of the Arctic. That’s why, together with Airseas, NAPA, Norsepower, and I-Tech, and supported by a broad range of maritime leaders, we’ve called for the shipping industry to invest in technologies which are fully commercially available for both retrofits and newbuilds, extend the lifespan of the existing fleet and reduce the environmental footprint of the sector.

Demonstrated results

These clean technologies are widely available today and there is a substantial latent efficiency within the international commercial fleet. Wind assist solutions such as Airseas Seawing, for example, will make significant fuel savings when applied to appropriate vessels and routes. In addition, according to I-Tech, the savings from effective hull coatings are estimated to be capable of delivering more than 100 million tonnes of carbon dioxide for the entire shipping industry annually. Norsepower’s Rotor Sails have been installed on six different vessel types, the latest being five Rotor Sails onboard a VLOC, and have delivered major emissions savings. NAPA’s voyage optimisation software can also significantly reduce emissions through fuel savings just by taking better advantage of weather, current and other factors. These technologies are all already available, and demonstrating results across a wide range all vessel types.

Combining technologies

It’s not a question of choosing one or the other – our mantra is “start with the ship”. Select the best combination of technologies now and be ready to add others as they become available. Its also not all about retrofit as energy efficiency and renewable propulsion technologies can complement low and zero carbon fuels helping to overcome the challenge of reduced energy density. All areas of a ship can benefit, from hull to deck, from wind propulsion, air lubrication, battery energy storage, hull coating technology, hydrodynamic energy saving devices and voyage optimisation software. Combinations across entire vessels and fleets will change the global supply chain for the greater good. Vincent Bernatets, CEO of Airseas, puts it simply: “Despite obvious differences, our technologies all have the same aim: they improve the energy efficiency of ships, thereby reducing the quantity of fuel that they need to burn, as well as the amount of carbon they release into the atmosphere.”

Energy density matters

Currently, regulations are largely encouraging the industry to do two things; to derate engines so vessels are forced to slow down and save fuel, but also to gradually switch to low and zero-carbon fuels – such as green hydrogen, methanol ammonia or biofuels. However, the ship of the future will need both efficiency technologies and alternative fuels. Energy density of fuels will vary depending on their type and energy properties but, overall, future fuels will be less energy-dense than current fuels. Therefore, ships will need more fuel to meet the same performance goals. Efficiency technologies can bridge this gap; making every drop of new fuel count will be essential from both an environmental and financial perspective. With the potential of significant carbon levies and increased fuel costs, energy efficiency and renewable propulsion technologies will provide huge financial savings across vessels and fleets.

Financial incentives

Funders, charterers and shippers are seeking to invest in and employ vessels with lower carbon intensity at a rate which is often ahead of the traditional regulators. However, with ESG factors now firmly on shipping’s agenda, and initiatives such as the Poseidon Principles and the Sea Cargo Charter adopted by companies taking ESG seriously, the industry is genuinely responding to the markets demand for change. It’s no longer just a case of “what’s the payback period for this investment”; boards need to be asking themselves if they can afford the cost of doing nothing.

It’s not all about the market. The Energy Efficiency Existing Ship Index (EEXI) is rightly focussing many ship owners minds but don’t forget the Carbon Intensity Indicator (CII). This has the potential to demand much more significant improvement in operating performance year on year. Shipping companies that rise to the challenge now will reap the benefits of being aligned to the changing markets. Whether measured by the IMO, or by their downstream value chain, those who don’t take advantage of the technologies already available and start the process of change may find the cost unpalatable.

I keep reminding myself how far the narrative in shipping has moved over the last three years and am encouraged and excited by the increasing pace of change and the enthusiasm for it. We shouldn’t be downbeat and see the challenges that we face as insurmountable or just another cost. For those who embrace change, this modern industrial revolution provides both opportunity and reward.

Why we ought to be using today’s technology to fix tomorrow’s problems