Looking forward to the path ahead: short, medium and long-term steps to maritime decarbonisation

Part one: the challenge ahead

The issue of decarbonising the shipping industry – which was responsible for around 2.9% of global emissions in 2018 according to the International Maritime Organisation’s (IMO) 4th Greenhouse Gas (GHG) Study – is the definitive challenge of our times.

Achieving the IMO’s goals requires a step change in ambition, innovation and collaboration from across our industry, and particularly between groups that may not have traditionally interacted or worked together.

By 2030, the IMO has targeted an initial 40% reduction in GHGs. This tightens further, and by 2050, the IMO is aiming for a 70% reduction in CO2 emissions and a 50% reduction in GHGs. Considering the strong likelihood of growth in global trade, and increasingly large vessels, meeting this target is estimated to require an 85% reduction in emissions on each individual vessel.

Meanwhile, there exist several barriers to decarbonisation in our industry. The lack of consensus on how ‘tough’ the pathway should be, plus the potential for regulatory fragmentation (if the European Union mandates stricter rules on carbon than the IMO, for instance) are all serving to add complexity at a time when owners and operators, who are at the frontline of the challenge, need clarity and simplicity.

Of course, decarbonisation is often intermingled with wider ‘sustainability’ issues, which should also be remembered. Already in force are a range of regulations covering marine pollutants, including the global 0.5% cap on sulphur content in fuel (IMO 2020), tiered regulations regarding NOx emissions, and structures designed to improve vessel efficiency, including the Energy Efficiency Design Index for newbuild vessels.

And soon, requirements on NOx will tighten further, and a new Index will be implemented for the efficiency of existing vessel design (the ‘EEXI’ scale). All in all, a complex picture lies ahead on the issue of shipping’s impact of the world – and that is not to even mention the estimated cost of achieving the IMO’s targets. 

In 2020, University College London’s Energy Institute estimated that achieving the IMO’s goals will cost USD $1 trillion to $1.4 trillion – although most of this investment will take place on land, in pioneering new, future fuels and the infrastructure required to support them.

Given the requirement for clarity, it is useful to think of the decarbonisation journey in terms of what is achievable in the short, medium, and long term – and home in on the actions that the industry can take today to start to make progress on these vital goals.

Short term solutions

In the short term, the industry should focus on what is immediately achievable, particularly if there are ‘marginal gains’ that can be unlocked that either enable wider innovation or save on emissions today. This short term period should be defined as what is likely to happen between now and the middle to end of the decade.

From a fuels perspective, there is likely to be increasing innovation and testing of so-called ‘future fuels’ to make them market mature. From an owner and operator’s perspective, this will prompt increasing action and trialling on these fuels to make sure they work in-operation. Efforts here are already progressing at pace, such as the number of shipowners currently trialling marine biofuel, and the scaling of other fuels such as methanol and ammonia.

Whilst these fuels are being adopted and tested with increasing pace and scale, we are also likely to see the greater use of bridging fuels, such as liquified natural gas (LNG). These fuels are defined as ‘bridges’ because they enable some action on decarbonisation, generally by providing a cleaner, if still fossil-based fuel solution.

From an asset perspective, the next decade is likely to see the adoption of more clean technologies in vessel design on a piecemeal or individual basis. These technologies include air lubrication systems, Flettner rotors, sails, or any technology that impacts the efficiency of the propulsion chain onboard. Generally, these technologies can individually unlock 5-10% fuel and emissions savings.

Meanwhile, operationally we are likely to see more derating of engines (in short, lowering an engine’s power) and slow steaming to achieve emissions reduction goals. However, critics of these techniques say that they do not address the challenge of holistic vessel efficiency.

Finally, and where ZeroNorth comes in, are the immediate efficiencies that can be unlocked through the use of digital technologies and data.

The industry’s vast - but widely underutilised - data resource holds the answer to a number of challenges operators and owners face. Without the need to alter a vessel or the infrastructure of a fleet, the right applications can leverage data to truly enhance vessel performance, increase earnings and reduce CO2 emissions.

Turning data into actions is central to our industry’s success as we continue to digitalise. Data alone is not an asset. Instead, shipping must do more to turn data into actions. In other terms, our challenge is about turning ones and zeros into dollars and cents.

Data can be turned into a true commercial differentiator and driver, and we will collectively begin to find more diverse use cases for shipping’s data asset, unlocking greater cumulative cost and efficiency savings.

ZeroNorth’s Optimise, for example, leverages data to provide ‘actionable’ insights for operators and owners into vessel performance and optimal speed. Through our software, we believe that around 5-10% of emissions can be addressed today. This is a significant total given the low barrier to entry and scalability of digital solutions. 

Given the power of this digital action to take place in the immediate term, it is clear that data-driven solutions must have a central place in the decarbonisation pathway. This is particularly important given the low cost to unlock efficiencies, which pound-for-pound make digital solutions that turn data into actions some of the best value decisions currently on the market.

We’re now up to the end of the decade in terms of the solutions we have explored. In next week’s blog, we will examine the rest of shipping’s pathway to decarbonisation, exploring some of the medium and long-term innovations that are going to enable a more sustainable sector.