The Pandemic Has Increased The Need To Reduce Fleet Emissions

There is no shortage of innovations in the marketplace relating to the development of new fuels, which are driving the industry towards more eco-friendly approaches, says Brian Coyne of KPI OceanConnect’s.

Decarbonisation is now firmly on the shipping industry’s agenda. Momentum is growing as the industry recognises the inevitable approach of the International Maritime Organization’s (IMO) 2030 and 2050 targets. In an industry and regulatory environment that will continue to evolve and change, we need to recognise that the needs of shipowners and operators will also continue to evolve.

They need solutions as soon as possible to support their decarbonisation trajectory. They need to be flexible in how they manage the change, and they need business partners that are equally flexible. Cruise owner AIDA Cruises recently bunkered GoodFuels’ sustainable biofuel as part of its Green Cruising Strategy to reduce CO2 emissions, a positive step in the right direction. But how do we make sure these options are more widely available across the industry?

Future fuels

The outlook for the industry is driven by which fuel pathways to decarbonisation are available and viable. Before shipowners make a decision about which fuels to invest in for their future fleets, they need to find the right partners to help them navigate through the coming market transformations. Whether they decide to bunker biofuel, methanol, ammonia, liquefied natural gas (LNG), or anything else, they will need to know they have the right solution for their operations and for achieving decarbonisation.

While the carbon fuel coefficient (kg of CO2/kg of fuel) for fossil fuels is high at over three, for alternative fuels, such as methanol and ethanol, it is about half as much, which is still a significant amount. Even ammonia will need to be produced through green processes before it can be considered zero-carbon.

LNG has a lower CO2 coefficient than the fossil oils used in shipping but COP26 saw greater attention being paid to methane due to its high impact as a greenhouse gas (GHG). Engine manufacturers are making progress towards eliminating methane slip (emissions of unburnt methane during combustion), but leakage during transportation and storage upstream still needs to be fully addressed. Meanwhile, more than 100 nations have now taken the Methane Pledge, launched at COP26, to reduce methane emissions across the whole economy.

Another viable option for shipping’s fleet today is sustainable biofuel. As a drop-in, low-carbon fuel, biofuel works within the existing infrastructure and complies with current regulation. However, many ship owners are not willing to pay the higher price of this fuel until there are more stringent regulations or greater pressure from their customers.

The reality is that the industry needs to take immediate action to turn the corner on reducing emissions and improving the sustainability of shipping. As well as moving towards a new and more complex supply chain. The industry needs to be flexible. It should consider existing solutions designed to tackle shipping’s carbon footprint today. One of the most effective mechanisms for achieving this is emissions trading and carbon offsetting.

Carbon footprints

Around 90% of world trade is transported by sea and the entire shipping industry is responsible for around 3% of global GHG emissions. For the industry to decarbonise, fuels need to decarbonise.

Current fuels on the market and those that are set to come in future will all have a carbon footprint, and this can be an eye opener for some. The carbon footprint of future fuels is not only about burning the fuel – consideration also needs to be given to how the fuel is produced and how we compensate for those carbon emissions. It is therefore important to consider the impact of all marine fuels and recognise there are things we can do today to reduce emissions.

One of the most immediate ways to act on this and to see instant results is through carbon offsetting. Carbon offsets enable emissions and CO2 output to be balanced with the purchase of an equivalent offset that funds certified projects to generate clean and renewable energy.

Carbon offsetting will be key to the EU Emissions Trading System (ETS), which should come into force from 1 January 2024, as part of the Fit for 55 package. It is important to recognise that the scheme is a marketplace and is far more expensive than the voluntary market. As a comparison, EU ETS is trading around $80 per tonne of CO2, whereas the voluntary market is around $8-12 per tonne of CO2, depending on the project.

Carbon offsetting is an enabler of the energy transition in shipping. As the EU imposes levies on users of its ports for their carbon emissions, responsible businesses could feasibly align their business in the rest of the world with the standards they meet in the EU. The only way to do this currently will be using voluntary carbon offsets. These programmes can be tied directly to the quantity of fuel an operator purchases. With the support of an experienced marine energy provider, shipping can ensure its offsetting activities not only help to balance emissions and act as a key tool to tackle decarbonisation, but also to support the global economy and environmental and social projects.

KPI OceanConnect sees an opportunity to be an innovator in this space and supports fellow forward-looking companies. We are drawing on expertise that already exists across the company, while also learning from others and sharing knowledge as we develop our carbon offset services. By partnering with buyers and sellers early on, we will see how best we can position ourselves in this market to add value and deliver fitting solutions.

Carbon offsetting offers a route to support the scale-up of renewable energy projects, which can then be used to produce zero-carbon fuels, while also mitigating the industry’s carbon footprint. The transition to future fuels to meet shipping’s decarbonisation pathway targets and new regulations is complex. Operational efficiency, profitability and sustainability require innovative thinking to unlock the complexities of the future fuel supply chain. By working with expert marine fuel partners, operators can gain knowledge of the future fuels that are becoming available while availability of these is still limited.

Changing roles

In line with the impending environmental regulatory changes, marine energy providers have a clear responsibility and a significant role to play in helping shipowners and operators successfully manage the transition. The marine energy sector needs to show leadership in a decarbonising shipping industry to ensure maritime stakeholders have expert support every step of the way. It is also essential to work with companies across the value chain to ensure owners and operators have access to the right fuel at the right quality wherever and whenever they need it.

As a consultative marine energy partner, we aim to apply our knowledge of the market and focus on innovative solutions to help drive environmental and sustainability change throughout our clients’ marine fuel supply chains. In Autumn 2021, we set up our Alternative Fuels and Special Projects division, led by Bill Wakeling, to enhance our offering further with the different pathway options, the idea being to accelerate progress towards a low-carbon future in maritime.

As a global organisation dedicated to sustainability and innovation, we are guiding our partners towards a decarbonised future. We advise on obtaining carbon-neutral fuel supplies and offsetting marine fuel emissions. During previous regulatory changes, we successfully supported our business partners to navigate through market transformations to find the best pathways for them in a changing industry.

This article was originally published by Clean Shipping International