Royal Institution of Naval Architects ZAS0059
Written evidence from the Royal Institution of Naval Architects (RINA)
RINA Panel review:
1. Tom Strang – Chair of the RINA Environment Committee
2. Edwin Pang – Chair of the RINA IMO Committee
3. Dmitriy Ponkratov, Technical Director, RINA
4. Chris Boyd – Chief Executive, RINA
Q. What contribution can operational efficiencies make to reduce emissions from shipping, and over what timescale could these have an effect on emissions.
A. Improving operational efficiency is essential to reducing overall emissions from ships and has the advantage that it lowers fuel demand and therefore fuel unit cost. By measuring performance and comparing results and settings to the optimum, by using tools such as weather routing, and itinerary optimisation, ensuring that maintenance is done when necessary, and matching a ships operational profile to the intended use, then we see that there are considerable opportunities remaining across many ship types. This is particularly important when we see a future where higher fuel costs are the norm.
However, they are subject to the law of diminishing returns, and may also be erased by the demands of certain trade routes. Since 2008, a combination of regulation, market forces (poor rates for ships, high fuel prices) have meant that CO2e emissions have been decoupled from trade growth as seen below in the graphic from the 4th IMO GHG Study.
Figure 1 4th IMO GHG Study
This is due to a combination of operational efficiencies (including slower speeds) as well as newer and larger and more efficient ships joining the fleet. As can be seen, world trade has increased by some 30-40% in terms of tonnes carriers, or tonne miles, while CO2 emissions have remained
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broadly flat. How long this trend may be continued is unclear, but as long as trade increases, operational efficiencies alone will not lead to any reduction in emissions.
Metrics and benchmarks that are used to measure and regulate operational efficiency at the IMO, EU and in other private sector initiatives (AER, cgDIST, EEOI) work in about 50-60% of the cases, but for a large minority, mandating improvements in the metrics will conversely lead to increased CO2 emission, and this perverse incentive will increase if overly stringent operational efficiency targets are set.
Q. How close are zero carbon fuels to commercialisation. What role should transitional fuels such as alternative hydrocarbons fuels play?
A. Zero-carbon fuels are not available at scale anywhere in the world today. We are at least a decade away from availability in targeted key hubs and centres, but what the industry needs is supply in all locations to be able to guarantee safe commercial operations.
The technology to use zero carbon fuels, such as ammonia and hydrogen, are being developed. Hydrogen fuel cells at lower power densities are already available, and hydrogen combustion engines up to around 2 MW are available commercially. (Noting that 10s of MW power are required). Ammonia combustion engines capable of powering the full-size range of commercial ships may be ready in 2024, however the regulatory safety framework is lagging, and there are significant safety risks associated with the use of both ammonia and hydrogen as fuels, although this is slowly being addressed, and then there are also technical issues related to pilot fuels, NOx emissions etc that need to be resolved
There are however significant challenges for these zero carbon fuels. The first is around the zero carbon credentials, since today hydrogen and ammonia are made from LNG and from both cost and scale perspectives, one could see these dominating the supply initially, but with uncertain climate benefits.
This leads to the second challenge around scale and availability of these fuels. The green alternatives made from zero carbon electricity sources via electrolysis of water will be very constrained in quantities and there will be significant competition for this scarce and expensive resource. In the near term we may see point to point supply for specific ships being available but what industry will need is widespread availability of these fuels to allow for commercial operation.
The third challenge is energy efficiency. Production of ammonia and hydrogen from zero carbon electricity sources is extremely energy inefficient with round trip efficiency in the 10%-20% region, requiring therefore much more zero carbon power generation capacity.
The fourth challenge has to do with bunkering infrastructure – to store and to refuel ships require a vast expansion in storage capacity (due to the low energy density of these fuels) with associated risks, and the refuelling infrastructure. The LNG transition, which has taken around 20 years to reach around 25 bunker vessels is a notable case study for context – there are around 160 fuel bunker vessels serving Rotterdam alone, and likely a couple of thousand fuel bunker vessels worldwide, and development of this infrastructure will take decades.
The last pertinent challenge is that we currently build around 3% of the world fleet capacity every year. More ships are built than are scrapped, and so the fleet grows along with the growing world trade. It means that at the point we start to build significant quantities of ships that are zero emission capable (if supplied with the fuels), it would take at least a decade or more to replace a
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third of the fleet with these new ships. Retrofitting the bulk of the existing fleet is not impossible but will be more expensive and time consuming than building new.
In summary, while the technology to use zero carbon fuels is already here or imminent, infrastructure, supply and rate of shipbuilding will mean that any significant uptake will be decades away.
Regarding the transitional fuels question – there are many nuances to this. LNG and methanol have notable air quality benefits over conventional fuels, and without many of the compromises that afflict ammonia and hydrogen. They can also use bio-based fuels with no conversion. Most shipyards are by default offering LNG powered models to comply with upcoming regulations, and
Maersk’s recent foray into methanol powered ships may also change the dynamics by expanding the range of engines that are able to burn methanol. It should be noted that scaling of ammonia and hydrogen production will most likely initially be based on LNG derived versions. LNG and methanol represent alternatives that are available now. The role of net zero hydrocarbon fuels also needs to be considered and should be included. The alternative to avoiding these transition fuels is to continue to build conventional ships powered by HFO and MGO
Q. What new technologies are there to reduce emissions from ships and how close to commercialisation are they?
A. Talk of technologies to reduce emissions is in some ways a policy distraction, as they do not offer a way to zero emissions. The only viable technologies are alternative fuels which were covered above, and for some specific sectors wind technology for which some has already reached commercial scale. The UK has several companies engaged in bringing wind technologies to market (almost a cluster) and these need significant support from Government. Wind has advantages in that landside infrastructure is not needed, and projects can start now, and there are no conversion losses.
Q. How should the Government’s strategy support UK industry in the development and uptake of technologies, fuels, and infrastructure to deliver net zero shipping?
A. The UK government’s investment in maritime R&D is very small relative to other countries. Recently £20 million was offered in the Clean Maritime Demonstration Competition, and just over a million is in the MarRI-UK Smart Ports. Typical Maritime EU funded projects under the Horizon 2020 and Horizon Europe banner are over €10 million each, and the EC has committed €530 million to zero-emission waterborne research over the next 9 years. There are multiple funded initiatives in Singapore, including the setting up of the Maritime Decarbonisation Centre with around £33 million in government funding.
Increasing investment in maritime R&D, providing greater assistance to SMEs, identifying, and acting on the opportunities of being a non-EU country.
The UK should also consider accelerating build out of offshore wind and other zero carbon electricity generation sources, and pair these with production of zero carbon e-fuels to be ready to supply the shipping industry.
Q. Are there any policy mechanisms that could reduce our reliance on shipping?
A. Shipping needs to be seen as part of the logistics chain, not a standalone part, and it is the lowest emission/most efficient part of transport logistics. For an island like the UK, increasing the share of
Royal Institution of Naval Architects ZAS0059
goods moved by sea, potentially as north-south corridors on both east and west coasts could reduce truck/HGV movements across the UK (particularly topical given the shortage of HGV drivers), ease congestion on motorway routes, reduce road accidents and reduce CO2 emissions.
As an island dependent today on imported food and finished goods, the question is either asking how to repatriate manufacturing capacity from Asia (with associated required increase in power generation capacity) or asking for measures that may lead to reduced demand for food and finished goods, neither of which are within the remit of RINA.
Q. What further action is needed by the IMO to drive emissions reductions? What can the UK Government to do drive international action on emissions?
A. The discourse at the IMO has been soured by high ambition proposals that do not provide any concrete and credible indication as to how these targets may be achieved, and which risk disruption to world trade and logistics on a greater scale than inflicted by the Covid-19 pandemic. The IMO badly needs restoration of evidence-based decision making, and the UK can lead in this by
(a) carrying out the research (involving industry) to articulate the concrete steps that need to be taken to drive emissions reduction, including indications of the necessary infrastructure that will be needed and
(b) being a pragmatic voice of reason is a sea of opposing views.
Q. How effective will ETS be at stimulating technology improvement and/or behaviour change to reduce emissions?
A. Much would depend on the type of ETS. The EU example linked to the FuelEU Maritime and ETD revisions leads to a very complex web of rules and regulations that risk double/triple counting and carbon leakage and avoidance. A proliferation of different measures by different countries and regions will only drive frustration and increasing operational costs and drive reducing. A well designed and managed straightforward global MBM at an international level could be supported by shipping and could deliver considerable benefit, funding R&D and incentivizing the development of new fuels and the supporting infrastructure. As mentioned in the answer to the first question, optimisation of operational efficiencies is already ongoing as a response to market conditions. Application of ETS may drive some further efficiencies but may also increase uptake of drop in biofuels depending on the price spread, as well as changing port call patterns to minimise payments to ETS. And as mentioned earlier, the technology is available, but the fuels and infrastructure are not ready.
September 2021