From Today to 2050: Challenges and Opportunities for the Maritime Industry
17 Oct 2023
State of the art and considerations by the RINA Italian Decarbonization Committee with the participation of Assarmatori and Confitarma
The reduction of carbon dioxide emissions, as well as greenhouse gases in general, by the maritime sector is a common goal at the international, European, and national levels.
Each ship differs in type, installed power, type of navigation, and therefore, the optimal solution for its decarbonization should be considered based on the combination of these characteristics. It is evident that a single solution cannot be decisive for all ships and for their entire lifecycle, considering that emissions limits will become increasingly stringent over time.
The need for uniform recommendations
Both the International Maritime Organization (IMO) and the European Union (EU) are developing their own strategies and measures to mitigate greenhouse gas (GHG) emissions and reduce the effects of global warming. To avoid each Administration making unaligned decisions, introducing disparities in treatment for ships flying different Flags, it would be appropriate to apply uniformly the recommendations approved by the IMO in the form of recommended resolutions, unified interpretations, circulars, or guidelines.
What are the current decarbonization options?
It is necessary to develop options applicable to the existing fleet, such as the use of drop-in solutions. Biofuels, for example, can be blended with conventional fuels or used in pure form, allowing for substantial reductions in CO2 equivalent emissions. For this path to be viable, two fundamental factors must not be forgotten: the availability of the fuel and the sustainability of its cost.
Carbon capture, which prevents its release into the atmosphere (Carbon Capture and Storage - CCS), is currently the only technology capable of making fossil fuels compatible with short-term emission reduction goals. It could be one of the transitional solutions for the maritime industry in the coming years for specific types of vessels. Although the technology is mature on land, investments are needed to support the initial research and development phase for onboard application, as well as the necessary logistics chain for the ultimate carbon sequestration.
The use of liquefied natural gas (LNG), which allows for a reduction of around 20% in CO2 compared to traditional fuels, despite its fossil origin, confirms itself as a transitional fuel. New ships that choose this alternative fuel, depending on their type and operational profile, will be able to employ reforming technologies combined with carbon capture and onboard hydrogen production (for use in combination with LNG) before transitioning to complete conversion to fuels such as methanol, ammonia, and hydrogen. In this case as well, research and development for onboard application of new fuels should be supported both financially and by a clear regulatory framework, as well as adequate infrastructure to support the production and distribution of various fuels.
The use of nuclear energy onboard holds promises and is worthy of further exploration, although the technology, especially related to new generation reactors and particularly small modular reactors (SMRs), is still in the study and experimentation phase, with public acceptance being one of the most critical aspects.
Many ships spend part of the time required for their commercial operations in urban ports, such as those operating regular liner services. To reduce, if not eliminate, local pollutant emissions such as SOx, PM (smog), and NOx, it is effective to power the ship, while in port, with shore power ("cold ironing" or "onshore power supply - OPS"). Additional benefits of this solution include the reduction of CO2 emissions if the land-based energy is entirely or partially generated from renewable sources, as well as the reduction of noise pollution resulting from the shutdown of onboard power generators. Many ships are already equipped to be powered from shore, and it is essential to invest in port logistics as well.
What is the decarbonization process like?
The decarbonization process of fleets necessarily follows two tracks:
- that of new ships (including major transformations involving the replacement of one or more main engines), which can fully benefit from the new technologies and alternative fuels gradually made available by the industry.
- that of the existing fleet, which, unable to use fuels with significantly different characteristics from current fuels, will need to reduce the quantity of emissions from fossil fuels by adopting suitable operational procedures, accepting an impact on service, consumption reduction techniques, and, where possible, the use of increasing proportions of compatible fuels such as biofuels.
The overall result depends on the combination of these elements, and especially in terms of time, on the rate of new ship/new fleet replacements that can be achieved.
The decarbonization process of the maritime sector depends almost entirely on land-based production and distribution infrastructure, over which shipping companies can stimulate but which largely depends on factors/circumstances that are beyond the control of shipowners.
In addition to the inherent logic of production and the market, in which the maritime sector is often less influential/decisive than other sectors (consider heavy road transport or aviation), land-based production and distribution infrastructure are strongly influenced by existing regulatory/authorization systems. These must be clear and consistent, especially at the international level.
Social acceptance and costs
We should not underestimate the difficulties associated with the "social acceptance" of certain solutions, such as the construction of new coastal storage facilities for gas, methanol, or ammonia, not to mention the "social acceptance" of solutions based on new "nuclear technologies."
The issue of costs directly and indirectly connected to the decarbonization process of the maritime industry is one of the central challenges of a journey that is not in question and that the maritime sector has already started to undertake decisively. This issue of costs includes elements (one of them being that decarbonization cannot be achieved at zero cost) that must be clear to everyone, especially those who are called upon to make policy and financial support decisions. The costs resulting from the ongoing process will burden everyone, either in terms of higher transport service costs or in terms of public resources that governments will need to allocate to accelerate, if not solely to support, the energy transition. It is important to emphasize that direct costs, understood as the costs that have a more immediate impact on the budgets of shipping companies, such as CAPEX and OPEX required to advance the decarbonization process, are very high.
Investments in fleet renewal and the high costs of new fuels must lead legislators to consider the following:
- Invest in the maritime sector most of the incomes from the application of the ETS to the maritime sector and from the Fuel EU Maritime.
- Incentivize those who invest in new ships/technologies.
- Reduce the price differential between existing fuels and future alternative fuels, up to covering it.
Regarding the second point, it is essential that any financing instruments put in place be consistent with the technologies available, in line with the time required to complete the respective projects and aware of the global shipbuilding production structure. It must be avoided that economic resources are made available that cannot then be spent, not because of shipowners' bad intentions, but because they are linked to the achievement of unrealistic technological goals or because they need to be realized within timeframes that are incompatible with project complexity or shipbuilding production capacity.
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