Maritime sector responding to decarbonisation requirements
The European Commission has also included the maritime sector in the “Fit for 55” package through the Fuel EU Maritime initiative. In recent years, the sector has developed a number of alternatives to conventional fuels, from LNG to hydrogen, but the cost problem is still unresolved
The European Green Deal has set an ambitious goal: a net reduction of greenhouse gas emissions of at least 55% by 2030. Details about how this goal can be achieved were recently outlined in the “Fit for 55” package of legislative proposals issued by the European Commission, which prompted widespread debate, even outside the borders of the European Union, over its potential impact. These proposals seek to translate the objectives into effective action and will have a significant impact on many sectors, with the risk of reducing, or at least limiting, the development and application of renewable and low-carbon liquid fuels to the advantage of electric power for motor vehicles.
The effective action envisaged includes the application of emissions trading to new sectors and further tightening of the current system, as well as a faster roll-out of low-emission modes of transport and the infrastructure and fuels to support them. The “Fit for 55” document also aligns fiscal policies with the objectives and measures in the European Green Deal to prevent re-localisation of carbon dioxide emissions.
One proposal that may well have a far-reaching impact concerns the phasing out of free aviation allowances and the inclusion of shipping emissions for the first time through the FuelEU Maritime initiative. Until now, the maritime sector was the only one still not subject to direct targets for reducing greenhouse gas emissions in Europe, although as early as 2019 the International Maritime Organization (IMO) introduced the objective of reducing greenhouse gas emissions by at least 50% below 2008 levels by 2050 and enacted stricter regulations on sulphur emissions as of January 2020.
The maritime sector currently accounts for 3.5% of total emissions generated in the European Union. On a par with other sectors, the maritime sector is also at the heart of a far-reaching transformation intended to reduce emissions, with many companies investing in new technologies and the use of greener engines and fuels, such as liquefied natural gas (LNG), currently considered the main resource for energy transition in this sector, as well as methanol or hybrid solutions.
As for the LNG on a global scale, the number of ships powered by liquefied natural gas has grown from 18 in 2010 to 175 currently in service, with more than 200 on order in 2020. Most ships in service operate in Europe and the shift from fuel oil to LNG or other alternative fuels is expected to be further accelerated following stricter of Sarbanes-Oxley (SOx) regulations as of January 2020.
Methanol, together with LNG, is currently considered to be one of the main alternatives to conventional fuels. Last 24 August, giant corporation Maersk announced a $1.4 billion investment to build eight container ships powered by zero-emission methanol with a rated capacity of 16,000 Teu. The first delivery is expected by March 2024. Another resource being analysed by operators in the sector is ammonia, which can also be produced from green hydrogen. Ammonia is considered a possible fuel for the maritime sector since its density is double that of hydrogen (which currently poses a storage problem on board large cargo ships). Energy sources currently in experimental stages also include electric and hydrogen fuel cells. Several solutions for this kind of power supply have been tested on relatively small transport boats, from light catamaran to small fishing boats and river tourism transport ferries. Mention can be made in Europe of projects such as Hybrid Ships or the HySeas III initiative. In Asia, Shell announced in April this year that it intends to test a roll-on/roll-off system powered by a fuel cell. Developments are also underway as regards electric motor propulsion, as seen by the Yara Birkeland container ship currently under construction – today considered to be the first electric ship in the world capable of carrying up to 120 Teu.
One of the main challenges hindering rapid transition in the sector is – naturally enough – that of costs. The maritime sector obviously needs commercial justification to ensure the viability of solutions based on new resources such as hydrogen. In specific smaller segments such as port handling equipment, alternative solutions such as batteries may be more cost-competitive for similar kinds of use and should be evaluated. Powering ships is more complicated. In addition to the higher capital expenditures for retrofitted vessels, shipowners also face uncertainties regarding operational costs. With long-life systems, low fuel and maintenance costs are extremely critical in order to achieve credible costs of ownership for their vessels. In this context, many observers foresee that hydrogen-based fuels will become cost-competitive with alternative fuels only in the decade 2030-2040.