“Given the lack of clarity around which technologies and fuels will mature and become dominant, investing in fuel flexibility today is the most financially viable way to avoid the risk of stranded assets in the future,” suggests Sachin Kulkarni, Head Marine Business Sales (South Asia) Wartsila India.
How is Wärtsilä helping the maritime sector in emission compliance and transitioning to eco-fuels?
The shipping industry needs to transform into a form of green transport. The IMO has put regulations in place to drive this transformation. Last year, the 80th session of the IMO’s Marine Environment Protection Committee (MEPC 80) adopted a revised GHG Strategy. The revised strategy aims to significantly curb GHG emissions from international shipping, with an ultimate goal of achieving net-zero emissions by 2050.
The path towards decarbonisation is complex with factors like – ambitious targets, indexes compliance, local and international regulations, infrastructure needs, geopolitical considerations, as well as technological maturity. Thats why it’s important to create a unique decarbonisation strategy for ship owners. After all, ‘de-risking’ the investment, or even repositioning the fleet, is a journey that needs to be done with careful planning.
We work closely with many ship owners to create a tailor-made decarbonisation strategy which supports their sustainability ambitions. Our approach allows for an open and honest conversation in which we can apply our expertise and seek out the best possible solution for ship owners, helping them take steps along their decarbonisation journey.
Starting with the existing fleet first, data-led advice is a valuable way to reduce and lower overall emissions. Our Decarbonisation Services can help ship owners find their decarbonisation path with three simple steps: analysis of current fleet, modelling and data analysis, followed by the selection of the appropriate solutions.
What’s more, one of the core elements preventing fleets from acting on decarbonisation is uncertainty. There is a sea of unknowns, particularly in relation to future fuels – so, fleets are worried about investing and getting locked into the ‘wrong’ solution. For existing vessels, the Wärtsilä feasibility study outlines the modifications needed to accommodate engines capable of combusting a ship owner’s future fuel of choice as well as the related fuel storage and auxiliary systems.
Turning to newbuild vessels, Wärtsilä works with ship owners around the world to future proof their newbuild vessels. There are a wide range of options for future-proofing new vessels including opting for future-proof propulsion systems, choosing efficient, multifuel or alternative fuel engines, leveraging electrical solutions such as hybrid, shore power or shaft generators. Energy-saving technologies and digital solutions can also improve efficiency and cut fuel costs and GHG emissions.
However, looking longer-term, given the lack of clarity around which technologies and fuels will mature and become dominant, investing in fuel flexibility today is the most financially viable way to avoid the risk of stranded assets in the future. We are committed to delivering environmentally sustainable technologies that will accelerate the transition to carbon-free shipping. The development of engines capable of running on future fuels is crucial to that and we are investing in all the new fuels and developing flexible technologies for the benefit of the maritime industry.
What are the main challenges for zero-carbon energy transition for shipping in India?
Globally, measures have been taken to reduce emissions from shipping, with the IMO, for example, announcing its revised strategy in July 2023 to reduce the industry’s GHG emissions to zero by or around 2050. With 2050 less than one vessel lifetime away, the industry is under increasing pressure to accelerate their decarbonisation journey.
However, the future of shipping is uncertain, which is one of the core challenges preventing fleets from acting today. The regulation and policy landscape in particular are ever evolving, both at an industry and regional level. There’s also confusion around the scale of change that’s needed, and a fear of making the wrong decisions. However, one thing is for certain: inaction is the costliest action that fleets can take today.
Another unique challenge for the industry is the lack of clarity around which technologies and future fuels will mature and become dominant. Shipowners, however, cannot wait for one fuel to become dominant, they simply do not have the time. It’s critical to begin today and prepare for multiple fuel options, lowering the risk of stranded assets and accelerating the opportunity to unlock the business benefits of decarbonisation.
We are starting to see great results with methanol, ammonia and hydrogen but they will all require more infrastructure to scale up. It will be vital to develop a green shipping infrastructure where 1.) ports provides onshore power, charging facilities, adequate bunkering facilities for sustainable fuels; 2.) we see national infrastructure for producing, distributing, and bunkering sustainable fuels; 3.) we see a buildup of green corridors as this will encourage ship owners to invest in green shipping.
There is also a need for developing maritime clusters where increased co-operation amongst maritime stakeholders throughout the value chain can be facilitated.
There seems to be a lot of confusion in choosing the right eco-fuel. How can the shipping lines decide the right fuel for them?
Because new fuels are not readily available yet, it is difficult for shipowners and for the maritime industry to predict which is going to be the prevailing fuel in the future. All alternative fuels have their unique advantages and disadvantages. Therefore, each ship owner will have to map its own transition path to new alternative fuels.
Fuel flexibility and the ability to convert to alternative fuels will be crucial in ensuring that operations continue uninterrupted. The choice that makes the most sense is a set-up that does not depend on the availability of a single fuel type. At the same time, ship owners will want to ensure the environmental performance of their vessel or fleet. The requirement for flexibility applies to newbuild vessels and existing assets alike.
Fuel selection will impact vessel design, CAPEX, OPEX and revenue generation potential of individual vessels. All alternative marine fuels – LNG, ammonia, biofuels, methanol and hydrogen, to name the main contenders – can reduce carbon emissions from shipping. How environmentally friendly they are depends on how they are produced. A lifecycle approach to ship-generated emissions takes the entire value chain of the energy source into account – from well to wake.
All-in-all, it will be important to consider the following three points: firstly, taking a well-to-wake approach when calculating emission reduction. As an example, the Fuel EU Maritime initiative demands a well-to-wake approach, and others are expected to move away from tank to wake. Secondly, investigating the current, and future, availability of fuel on a planned route. And finally, ensuring that crew are trained to handle any new fuels intending to be used.
Is retrofitting a good option? In which scenarios can a vessel owner opt for retrofitting an existing vessel? What factors need to be considered while deciding for retrofitting a vessel to operate on clean fuels?
In the short term, efficiency improvements and energy-saving technologies can help. But to hit tough regulatory targets in the longer term, more operators are converting their vessels to run on lower carbon fuels. Modifying a ship running on traditional fuels to make it compliant with sustainable fuels can very much vary depending on the type of fuels, load and operating profile, certification and safety requirements. In most cases, modifications are not limited only on engine. The whole fuel storage and supply system will need to be adapted depending on fuel selection.
There are a few factors to consider with a marine fuel conversion, including:
The business case:
To ensure a successful conversion to alternative fuels, you need to create a business case. What is the target you need to reach and how will a fuel conversion enable you to reach that target? What fuels are being considered and what impact will the conversion have on your vessel and its operations? Is the CAPEX recoverable in the vessel’s remaining operational lifetime?
Fuel Choice:
One of the main factors to consider when evaluating which alternative fuel to choose are your emission reduction targets and the availability of each fuel along the route that your vessel operates. Also, taking a well-to-wake approach when calculating emission reduction is important.
Engine conversion:
You also need to check if your engine can be converted to run on alternative fuels or if you need to replace it. Because of availability limitations for alternative fuels, the most popular choice is to convert the engine so that it can use the new fuel in addition to the existing fuel. This allows you to use the alternative fuel when available and your traditional marine fuel when not. Converting a vessel involves far more than just converting the engine, the scope of the conversion may widen depending on the fuel being considered.
Finding room on board:
Alternative fuels like hydrogen, ammonia and methanol are less energy-dense than conventional marine fuels, which means bigger fuel tanks are needed. When converting to a fuel-flexible engine a double fuel supply system might be needed, depending on the chosen alternative fuel. All this will require more room than the current diesel setup. A technical feasibility study is a key part of identifying in detail what converting the vessel will involve.
Scheduling:
You will need to consider the best time to undertake a conversion and what steps need to be taken. Installing the new fuel tanks and fuel handling system is carried out in a drydock, so is best timed for when your vessels have its scheduled drydocking. The engine conversion itself can be done separately, does not require drydocking and can usually be carried out while the vessel is in service. The whole conversion doesn’t need to be completed at once, which gives you more flexibility.
What are the retrofitting solutions offered by Wärtsilä?
There are several options open to ship owners and operators looking to retrofit solutions as a way to reduce emissions and/or save fuel. At Wärtsilä we offer a variety of retrofit solutions.
For example, our Wärtsilä Fit4Fuels, which is a retrofit technology platform converting 2-stroke diesel engines to run on future fuels. The ground-breaking hybrid combustion concept maintains engine power density and eliminates fuel slip, providing a viable and flexible pathway towards a decarbonised future. It also increases the commercial value and lifetime of existing vessels.
To enhance this solution further, last year we introduced our new radical derating retrofit solution – Wärtsilä Fit4Power – which extends the emissions-compliant lifetime of merchant vessels by providing the existing two-stroke fleet with leaner, healthier and more optimised engines.
Another example is our Wärtsilä 32 engine which is available for newbuild or retrofitting. Our Wärtsilä 32 methanol engine does not require any technical conversion when starting to run on methanol. However, it is important that there is a methanol supply system in place along with the adequate safety measures taken in the engine room and tank space. That’s why, we developed a dedicated fuel supply system for methanol, MethanolPac. More recently, we introduced another four methanol engines to our portfolio, setting a new industry benchmark with the broadest methanol engine portfolio on the market. Of these new additions, Wärtsilä is developing the corresponding methanol retrofit capabilities for the Wärtsilä 31, Wärtsilä 46F and Wärtsilä 46TS.
Outside of our engine technology, we have a range of other solutions that can support here, such as our energy saving technologies, which are designed with high efficiency at their core and can reduce a ship’s energy consumption and save fuel for ships, or our hybrid solutions which optimise the use of auxiliary engines and can provide a solid starting point for creating a flexible vessel, which is adaptable for any future requirements within its lifetime.
We also offer a number of services to ensure that vessels operate in an optimal way. For example, our service agreements can help ship owners and operators to decarbonise, cut emissions and stay compliant. We deliver repairs, field services, technical advice, performance optimisation, environmental solutions, crew training and full lifecycle solutions anytime, anywhere. Our data, AI and voyage solutions are designed to connect and optimise the entire ecosystem, from propellers to ports, and beyond. This portfolio of digital solutions helps fleets improve efficiency, cut fuel costs and GHG emissions, while foreseeing shocks.
Do you think the process of decarbonisation in shipping could be fast-tracked with the implementation of carbon levy system?
We welcome any initiative that accelerates decarbonisation, both on land and sea as these are interconnected when it comes to e.g. fuel availability and infrastructure.
The challenge is not downstream, it is upstream. Today, we already have the know-how and the technology to drastically reduce maritime emissions and set the industry on an upgrade path towards complete decarbonisation. But technology in silo does not decarbonise maritime alone – action from both the market and regulatory side of the maritime industry is crucial to incentivise investment, build infrastructure, favour the development of the needed fuel supply chain, and legislate to accelerate the adoption of these technologies. Decarbonising maritime will take more than technology on its own, it needs active collaboration across the entire marine ecosystem.
Fleet emissions will have direct consequences on access to capital (e.g. Poseidon Principles), on chartering conditions with Sea Cargo Charter, and even on operating expenses (OPEX) due to the introduction of the carbon tax.
Businesses and consumers will take steps, such as switching fuels or adopting new energy saving technologies, to reduce their emissions so they can limit, or eliminate altogether, the amount of tax needed to pay. This means that carbon tax could act as an incentive to get businesses to avoid the use of fossil fuels and would act as a pressure for accelerating the energy transition process in marine.
