- Maritime CO₂ Transport Emerges as Key Net-Zero Enabler.
- Cross-Border LCO₂ Shipping Faces Legal and Technical Hurdles.
- LCO₂ Vessels Drive Scalable Carbon Capture Logistics.
As countries strive to meet their net-zero goals, the maritime transport of liquefied carbon dioxide (LCO₂) is emerging as a viable and cost-effective alternative to traditional pipelines for carbon capture and storage (CCS). With a rising interest in flexible transport solutions, shipowners are pouring resources into vessels specifically designed for low-pressure, low-temperature cargoes like CO₂, ammonia, and LPG. This investment is crucial for developing long-term CCS infrastructure that will last through 2050, reports UK P&I.
Industry Initiatives Fueling Momentum
The UK P&I Club is playing a key role in shaping the regulatory landscape for LCO₂ shipping, participating in the BIMCO CO₂ charter party drafting committee and collaborating with the UK’s Carbon Capture and Storage Association. A standout project is Norway’s Northern Lights, which marks the first cross-border initiative for LCO₂ transport and storage, facilitating the movement of CO₂ from emitters in Northern Europe to offshore sequestration sites in the North Sea. Other nations, including the US, Australia, Indonesia, and Malaysia, are also making strides in developing local shipping solutions.
Cross-Border Hurdles and International Agreements
International regulations like the London Protocol currently categorise CO₂ as “waste,” which complicates its export for offshore storage. While provisional applications and amendments are in progress, achieving full legal clarity is still a work in progress. There’s a growing need for bilateral and multilateral government frameworks to support transboundary CCS chains, particularly in areas lacking established regulatory systems.
ETS Exposure and Liability Allocation
Under the EU ETS, shipowners take on liability for CO₂ cargo as soon as it’s loaded. Any losses from venting or leakage could result in hefty financial penalties. The challenge of distinguishing between fossil and bio-derived CO₂ adds another layer of complexity to compliance, especially when dealing with mixed cargoes. To navigate these risks effectively, well-crafted charter parties will need to incorporate clear indemnities, quality clauses, and loss protocols.
Strict Handling Conditions and Limited Infrastructure
To keep it stable, LCO₂ needs to be maintained within very specific temperature and pressure ranges. If those limits are crossed, it can lead to issues like dry ice forming, overpressure, or delays in handling. The design of tanks, insulation, and port facilities all have their technical challenges, and safety concerns—like the risk of asphyxiation and cold burns—make having emergency protocols essential. While current carriers can hold between 1,000 to 7,500 cbm, figuring out how to scale for long-haul routes is still a work in progress.
Lack of Standard Forms and LNG Limitations
BIMCO is working on a dedicated LCO₂ charter party that should be ready by late 2025. In the meantime, owners are using modified LNG forms like ShellLNGTime 2, which don’t quite fit the bill for CO₂’s waste-like and non-energy nature. For LCO₂, charter warranties will likely need to emphasise cargo stability, reliable refrigeration, and a strict no-loss delivery policy, especially considering the financial risks tied to carbon regulations.
Tailored Performance and Liability Clauses
Traditional performance warranties need to be adjusted to fit LCO₂’s unique characteristics. Terms regarding speed and fuel consumption should take into account the lack of boil-off benefits. Additionally, contracts will have to clearly outline the vessel’s readiness to handle the narrow thermodynamic tolerances that are necessary during loading and unloading.
Documenting Waste Cargo with Regulatory Implications
While CO₂ might not have a price tag, the Bill of Lading is still vital as proof of the amount delivered, especially when it comes to the ETS. Any inaccuracies can lead to compliance headaches or even legal disputes. There are two main risks to keep an eye on: EU ETS liabilities for any losses and possible claims from shippers related to EA. Cargo certificates must match up perfectly with the Bills of Lading to steer clear of any conflicts.
Standardisation and Early Risk Planning
The future of LCO₂ shipping relies on having consistent standards, well-balanced contracts, and teamwork among all stakeholders. Some best practices to consider include lab-certified checks for CO₂ purity, clearly defined thermodynamic parameters in contracts, real-time monitoring of cargo, and getting P&I Clubs and classification societies involved early on. As regulations and technologies evolve, strong collaboration will be key to developing a scalable and secure LCO₂ transport industry.
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Source: UK P&I
