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The shipping industry’s net-zero fuel dilemma

STORY: “It’s an incredibly complex and challenging puzzle for ship owners” The shipping industry is under increasing pressure to decarbonize. Particularly now as the International Maritime Organization (IMO) is being pushed to introduce a levy on the sector’s greenhouse gas emissions – possibly as early as September 2024, with the aim of achieving net zero by 2050. But getting there is complicated, shipping managers say. They cite unclear regulatory guidelines, particularly regarding which cleaner fuels to switch to. Kenny MacLean is chief operating officer of Peninsula, a company that supplies fuel to the shipping industry. “We obviously understand the complexity and variety of regulatory requirements imposed on our customers, and to some extent on ourselves, because we operate ships. I think the big problem with the new fuel regulation guidelines is that there are many of them and they all overlap to some extent. But the most important thing, in my opinion, is that they come from different national, regional or international organizations. Shipping accounts for about 90% of global trade and is responsible for almost 3% of global carbon dioxide emissions. Currently, most large ships run on very low sulfur fuel oil, a tar-like substance that is relatively inexpensive and high in energy, so a relatively small amount is needed to power a ship over long distances. Greener alternatives include ammonia, methanol or biofuel. But industry research has shown that they each have their unfavorable characteristics – from dangerous and toxic to expensive or in limited supply.” Container lines know pretty much where they will be when they do there are. So when you’re in the hitchhiking business, your ship can literally operate anywhere in the world. When you have more certainty about where you want your ship to operate, you also have more certainty about which fuel propulsion system you can choose because you know what is available today or what is likely to be available in the future. However, the greatest possible flexibility is required in hitchhiking. That’s why we’re working on hybrid drive systems. It could be traditional fuels combined with something like LNG. “LNG, which stands for liquefied natural gas, powered this 8,000-passenger Royal Caribbean cruise ship on its maiden voyage in early 2024. The company says the cleaner-burning fuel makes the ship 24% more efficient when it comes to carbon emissions than required by the IMO. But environmental groups say the associated methane leaks from ship engines pose an unacceptable risk to the climate. Bryan Comer, Marine Program Director at the International Council of Clean Transportation “LNG is not a short-term or long-term solution because the moment you start using LNG as a marine fuel, including on cruise ships, you actually start emitting more greenhouse gas emissions than if nothing had been done.” would continue to run on the fuels we use today. “It’s actually a step in the wrong direction.” Last year, European Commission President Ursula von der Leyen christened the world’s first methanol-powered container ship at a ceremony in Copenhagen. “This event is a big deal, not just for Europe but for the whole world. By successfully decarbonizing shipping, we are not only furthering our fight against climate change, but also creating new supply chains, new industries and thousands of new good jobs.” Experts say the challenge for ship owners is not just choosing the right, cleaner fuel It also depends on its availability. Roger Holm is Marine President at Wärtsilä – a Finnish company that supplies equipment to the shipping industry. “Here you have the chicken-and-egg problem with these fuels that companies are not willing to invest in unless they know exactly the financial implications. You don’t know when the fuels will be available. And that means that as a fuel provider you are not ready to set up green fuel production now “Most marine engines are designed to take one type of fuel and have an average lifespan of 25 years. So, in the absence of a longer-term regulatory framework, many are in a position to invest.” The industry is reluctant to buy completely new fleets or retrofit existing engines to run on cleaner fuels. The IMO’s draft plans to introduce a fuel standard and emissions pricing are still up for discussion… but pressure is on to set a course that could be adopted or changed at the group’s next meeting in September.