In a door-to-door cargo move, the sea leg is the major contributor to Green House Gasses (GHG) emissions, contributing to about 90% share of the total emissions. Reducing emissions from ships is therefore an important task, resulting in a lot of buzz around green shipping and alternative fuel.
Sulphur, NOx and GHG are emitted from vessels due to fuel combustion; these gases are either harmful to humans or the planet. Moves to reduce the emission of CO2 and other GHG generated by shipping have been propelled by a combination of:
• Regulatory push: IMO’s ambition to reduce emissions has resulted in the requirement for energy-efficient vessels with lower emissions.
• Push from the financial institutes: Adoption of the ‘Poseidon Principles’ by many banks, which means that they will only finance projects which are climate aligned.
• Push from the end customers: Charterers of the ships and cargo owners are also exerting pressure on shipowners and operators by the adoption of the ‘Sea Cargo Charter’ and coZEV (Cargo Owners for Zero Emission Vessels). This is in response to demand from end users so that the customer can get information on the emission for various products.
All these have resulted in innovations across the industry to reduce emissions.
The main ways to reduce emissions are by using:
• Alternative fuels have lower emissions than the conventional fuel oil
• Propulsion Improving Devices (PID) are modifications in front or behind the propellor
• Energy Efficient Technologies (EET) for example, wind-assisted propulsion
• Others include various operational measures (like hull cleaning, engine power limitation etc.)
What are alternative fuels and how they help in decarbonisation
Out of the above methods to reduce emissions, the key method is to use alternative fuels, supported by all the others.
Alternative fuels include various fuels other than the conventional fuel oil Alternative fuels are further categorised into different colours depending on the feedstock used. Some of the colours are:
• Grey fuels are fossil fuel based and produce carbon emissions that are not captured.
• Blue fuels are those in which carbon emissions are captured using the carbon capture and storage (CCS) process.
• Green fuels, which are non-fossil fuels, and therefore either do not have any carbon in them or else the carbon molecule required for its production is captured from the air by a process called Direct Air capture (DAC).
According to Drewry Maritime Advisors, only 1059 vessels are capable to use alternative fuels. (this includes 496 LNG vessels capable of burning LNG). Out of these, over 86% is capable of burningLNG. Among the vessels under construction, 20% vessels are dual fuel vessels. Around 84% of orderbook are capable of burning LNG.
Overview of the key alternative fuels
LNG: It has gained considerable popularity as an alternative fuel in the last few years as it is the most easily available alternative fuel at the moment, with lesser CO2 emissions. In addition, it has negligible sulphur emissions and very less other air pollutants.
But, it needs more storage space than Heavy Fuel Oil (HFO).In addition, there are controversies about the capability of LNG to contribute to GHG reductions due to possible methane slip (gas leakage during extraction, combustion, etc.). Although, methane slip does not cause any CO2 emission but results in the emission of methane, which is about 30 times more harmful GHG than CO2.
Since LNG is still a fossil fuel and emits CO2, it alone will not be able to meet the long-term IMO targets. Therefore vessels will have to change over to bio-LNG and thereafter to synthetic LNG. Bio-LNG is produced from biomass and there are concerns about the its sufficient availability in the long run.
Synthetic LNG is expected to be more expensive than other alternative fuels like ammonia. This is because carbon required for the production of synthetic LNG is obtained by DAC, which is an energy-intensive process, thereby increasing its production cost.
Therefore, there is a lack of a clear case for LNG as an alternative fuel in the long run. Hence, it may be regarded as a transition fuel. During the next few years, LNG is still likely to remain popular fuel while the other alternative fuel evolves and their production, as well as the bunkering facilities, are ramped up.
Biofuels: These are liquid hydrocarbon fuels that are produced from sources such as vegetable and animal oils or their waste. Although, they do not result in carbon emissions reduction during the combustion process, however, these emissions can be partially or fully offset during their production to create net-zero-carbon fuels.
They are a ‘drop-in’ fuel, which means that they can be directly used in place of an existing fuel with minimal alterations to the engine and other equipment. Biofuel is a good alternative fuel for the short to medium term. especially because minimum alteration is required in engines for regular usage.
Biofuels require sustainable biomass, whose availability is limited. In addition, its sustainable production is also a cause of concern. Therefore, biofuel will not be an alternative fuel in the long run, and hence it may also be regarded as a transition fuel.
Methanol: Currently, methanol is produced using natural gas and coal and is slowly becoming popular alternative fuel at the moment due to its ease of handling and lesser emissions. In addition, low-carbon methanol can also be produced from biomass and green methanol can be produced from renewable electricity along with DAC.
However, it requires more storag e space than conventional fuels. Therefore, there is a possibility of reduced cargo carrying space due to larger fuel tank requirements. Hence, Maersk is working on a revolutionary design of the container vessel to prevent the loss of cargo space.
Methanol-fuelled vessels will have to change to green methanol in the long run. But green methanol is expected to be more expensive than other alternative fuels like ammonia. This is because carbon required for the production of green methanol is obtained by DAC, which is an energy-intensive process, thereby increasing its production cost.
Potential of India to become a key bunkering hub for green ammonia
Hydrogen: If it is produced from natural gas in conjunction with 100% CCS, it is called blue hydrogen and if produced using renewable electricity it is called green hydrogen.
Although this is a zero-carbon fuel, it requires a larger storage area, resulting in a compromise in the cargo space. Also, special storage tanks are required which can store the liquid hydrogen at -2530C and these tanks have to be made of special material. This results in a higher overall cost for hydrogen, although the production cost has been reducing, due to the decreasing cost of renewable energy.
Due to the additional cost and higher loss of cargo carrying space, hydrogen is not expected to be the fuel of choice for deep sea vessels.
However, for vessels on short sailing or ferries, hydrogen may be used, especially in fuel cells, provided that the vessel design does not result in lesser cargo capacity.
Ammonia: Hydrogen and nitrogen are combined to produce ammonia. Green hydrogen is required to produce green ammonia. It is also a zero-carbon fuel as it has no carbon in it. In addition, it virtually eliminates sulfur emissions, particulate matter and black carbon emissions.
Ammonia engine is expected to be ready by 2024. There are a few safety issues associated with this fuel as it is highly toxic. However, since it is already carried as cargo, these issues are not expected to be a major hurdle.
Alternative fuel in the long run for the maritime sector
Ammonia and hydrogen are the only two zero carbon fuels for the long run as of now due to the fact that they do not contain any carbon. Out of these, Ammonia is expected to be the clear winner for the maritime sector. Although hydrogen is used as a feedstock for ammonia, the main reasons for preference for ammonia over hydrogen are the following:
• Ammonia can be stored at a lower temperature of -340c as against – 2530c required for liquid hydrogen.
• Ammonia is much easier to store and requires less space onboard a vessel.
• The cost for hydrogen storage infrastructure needs a higher capex as it requires special material for construction, insulation, refrigeration system, etc.
• The production costs of ammonia are higher than that of hydrogen due to a more complex method of production. However, due to its much lower costs for storage/distribution, the delivered cost of ammonia fuel may be significantly lower than Hydrogen.
• Nitrogen feedstock for ammonia is readily available from the atmosphere and is cheaper to obtain than the carbon needed for carbon-based fuels. Therefore, ammonia is expected to be much cheaper than other green fuels in the long run.
Conclusion: Although, green ammonia is expected to be the cheapest zero carbon fuel in long term, the picture will be clearer by around 2024-26 once engines for ammonia are ready and used for some time. The major concern with ammonia is its highly toxic nature so proper precautions are needed. Any accidental leakages of ammonia in pilot projects may delay the popularity of ammonia.
Developments toward green shipping will continue at an increasing pace. It must be highlighted that there are a lot of emerging technologies like nuclear, fuel cells, battery etc. Therefore, it is possible that some other fuels may become more popular than the one mentioned in this article.
It must also be noted that every fuel option comes with its own hindrances and issues, and it must be emphasised that there is no perfect solution. The long-term alternative fuel is still not known and therefore, it seems more likely that there will probably be a multi-fuel scenario, in which more than one fuel will be popular and they may be specific for different regions/trade routes. The choice of fuel may also depend on how prices of different fuel develop.
Presently IMO targets are only for CO2 and all the Green House Gasses (GHG) together, without any specific regulations for the emission of methane. IMO regulations are only covering the emissions from the vessel’s tank to its combustion in the engine. There is a consensus developing to measure emission from well to combustion. IMO is expected to come with the revised GHG strategy by 2023 and issues will become clearer once this is made and this may change the alternative fuel landscape.
The emergence of zero-carbon bunker fuels and the decoupling of the energy supply for shipping from crude oil reserves offer a unique opportunity for some countries to become bunkering hubs in the future. The key driver of competitiveness in the production of zero-carbon fuels is the low-cost supply of zero-carbon hydrogen, which in turn depends on low-costs of renewable electricity.
Due to its favourable location, India is one of the best recipients of solar energy. As a potential economic superpower, which is located on the trade route between China and Europe, India is geographically well placed to meet the future demand for zero-carbon bunker fuels produced via solar energy, provided the bunkering hubs are located in appropriate maritime trade lanes.
The abundant possible supply of solar energy would still leave excess renewable electricity for other sectors. Therefore, India is suitable for the manufacture of green ammonia for shipping, whose key feedstock is green hydrogen. This will require large capital investment in the range of USD 147 to 385 billion for 10% to 27% of global ammonia demand in 2050.
Existing scenario of renewable energy production and investment in India
National Hydrogen Mission
In India, National Hydrogen Mission was launched in Aug 2021 and in line with this, a green hydrogen/green ammonia policy has been framed to boost the production of green hydrogen and green ammonia. There is a need of a national strategy for the development of green hydrogen and green ammonia bunkering hub at realistic locations, taking the maritime trade routes into consideration.
Overview of emission reduction in ports
A multi-pronged approach is adopted by ports to reduce emissions from vessels. For examples:
• Heavy duty vehicles are the main source of emission in the ports and globally the ports equipment are changing over to electric equipment
• Some ports like Los Angeles have mandatory speed limits for the vessels in the port area to reduce emissions.
• Ports also play their part in incentivising green ships, by charging them lower port dues.
• Shore power is increasingly being adopted to reduce the emission from the vessel at berth.
• Just In Time arrival is a new concept being progressively adopted by the ports to reduce emissions from vessels at anchorages.
• LNG duel fuelled tugs and electric tugs are becoming popular in ports. The world’s first hydrogen-fuelled tugboat was launched in May this year and is scheduled to become operational in the first quarter of 2023.
• Renewable energy is being used in ports. For example, Jurong Port of Singapore is the largest port-based solar energy generation facility in the world.
• Ports also have to invest in infrastructure to enable bunkering of alternative fuels.
Example of emission reduction initiatives in the Indian port sector
LNG Bunkering in India: Petronet LNG Ltd intends to start bunkering services to vessels from its 5 million tonnes capacity at Kochi terminal in India. The terminal has already provided LNG bunkering to two Norwegian ships in 2015 and intends to deploy bunker barges for it. It is studying the expected customer base before finalizing the decision.
Lower port dues: From August 2021, the Adani Group’s Mundra Port offer a 50% discount on port dues, pilotage and berth hire charges to ships running on LNG.
Emission reduction target: Adani Ports and Special Economic Zone (APSEZ) has chalked out a detailed plan to become a green port and logistic company towards its goal to become carbon-neutral by 2025.
LNG-fuelled fishing vessels in India; The Central Institute of Fisheries Technology carried out a trial of substituting high-speed diesel (HSD) with LNG on fishing vessels. LNG was substituted up to 40% of the total quantity during the trial. The trial concluded that LNG may be a viable choice for at least 40% substitution of HSD,
Other pilot projects in India: In Dec 2021, the Central Institute of Fisheries Technology started a trial of using XtraGreen diesel fuel of IOCL on a fishing vessel (XtraGreen diesel uses a modified diesel multi-functional additive which offers several benefits over the regular diesel).
Indian port policy
India’s maritime sector plays a crucial role in the overall trade and growth with 95% share in trade volume and 65% share in trade value. Therefore, Indian ports need to undertake green initiatives in line with the broad vision of the country to reduce emissions.
Accordingly, the Government of India has developed the Maritime India Vision (MIV) 2030 and aims to strengthen the Ports, Shipping and Waterways sectors of India through concerted interventions. ‘Safe, Sustainable and Green Maritime Sector’ is one of the focus areas under the MIV.
MIV 2030 has identified key interventions like increasing usage of renewable energy, reducing air emissions, optimizing water usage, improving solid waste management, etc. To take forward this agenda of ‘Safe, Sustainable and Green ports’, the Ministry of Ports, Shipping and Waterways has made a draft green port policy. This draft policy includes proposed projects which can be undertaken by various ports as a part of this strategic action plan. These projects will provide an impetus towards a greener maritime sector. It is now taking stakeholder inputs for this policy.
Further recommendations from Indian context
The draft policy has a number of interesting recommendations in the areas mentioned above. However, the following could also be considered to further enhance the implementation
A roadmap should be developed for each port, incorporating short/mid/long term measures.
• Short-term measures (within the next 2 years) could include a thorough review of each and every step of the vessel operation to look for the scope of improving productivity. Improvement of operational productivity reduces the port stay of the vessel and therefore, reduces the emission from the ship during the port stay.
Many times, productivity can be improved without sinking any capex by sweating resources more efficiently and taking simple measures, especially in dry bulk port operations.
• Mid-term measures (2025-2030) could include the following:
O KPIs could be considered for pilots to board the vessels on time to reduce the vessel’s turnaround time within the port limits. Such KPIs are there in Singapore port.
O Overstay dockage policy may be considered for implementation in the ports, to prevent longer stay of the vessels at berth, which in turn reduces the port stay of the vessel, and therefore, reduces berth utilisation and reduces emissions. Such policy exists at Jurong Port of Singapore
O Speed reduction policies within port limits should be adopted to reduce emissions. For example, the port of Los Angeles has mandatory speed limits in the port area.
O Ports also play their part in incentivising green ships, by charging them lower port dues, as is being followed at Mundra port.
O Provide cold ironing facility for some berths which have vessels on a regular run. However, shore power should not be imposed unilaterally for all vessels, but should be explored for specific berths and for specific types of vessels. For example, cruise vessels or refrigerated vessels or container vessels on a regular run.
O All new tug boats should run on alternative fuels
• Long-term measures beyond 2030 could include the following:
O Ports should explore multi-party collaboration for alternative fuels production near the ports and alternative fuel bunkering facilities to be provided by ports, especially in the port near busy trade lanes. This is especially for ammonia, which is expected to be the main zero-emission fuel in the long run for the maritime sector. Also, due to cost-effective production because of solar energy, it is expected to provide good returns for such facilities in India
O For example, waste fuel could be used to make biofuel, which could be used by the tugboats or supplied to the vessels. This is a cost-effective method as vessels do not need any retrofitting to use a limited quantity of biofuels.
• Other recommendations:
O Upgradation of the old berth at the major port should consider adopting Jurong Port’s green berth concept of berth upgradation. In this, some of the old concrete is recycled and involves the usage of green cement.
O When making a new PPP agreement or extending an existing agreement, the port authority should consider adding some clauses to motivate the port operators to reduce emissions. However, capex required for these may have to come from the operator or both from the port authority and the operator and the same needs to be agreed upon and documented clearly.
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