Welcoming the guests, Rune Braastad, SVP, Division Manager at ABB Marine & Ports US, noted that shipping is in transition, with both stricter regulations and new technologies driving change. “The pace of change is faster than ever. Vision is important in times like these, but realistic goals and stepwise progress are the way to ensure sustainable development.”
On the regulatory front, the International Maritime Organization (IMO) has called for a 50 percent reduction of GHG emissions by 2050 compared with a 2008 baseline, and for phasing them out as soon as possible in this century. Carbon intensity is to be reduced by 40 percent by 2030, and 70 percent by 2050.
The first steps toward compliance
Moderator John Snyder opened the floor to discussion starting with the IMO 2020 sulphur cap, the first major piece of emissions legislation to impact the industry.
Anshul Tuteja, Associate VP, Global Fleet Optimization, Royal Caribbean Cruises Ltd. (RCCL), expressed the urgency shared by his colleagues in the room: “The clock is definitely ticking on emissions now. We began installing scrubbers four years ago, with about half a billion USD invested to date.” But no such major decision is without its complications, he confirmed. “These are challenging times in many ways. Luckily, we went for hybrid scrubbers, so we have the option to comply with stricter requirements. But there is a learning process involved.”
As an example, he cited unsightly steam plume caused by the moisture added to exhaust by the scrubbing process, requiring ships to run on cleaner fuel despite having scrubbers installed. Though he acknowledges that alternative fuels have their advantages, Tuteja said RCCL remains at peace with their decision: “Right now we see an economic advantage with scrubbers.”
While RCCL will take delivery of three 5,000-passenger ‘Icon Class’ cruise ships powered by liquefied natural gas (LNG) between 2022 and 2025, Tuteja noted that as a fossil fuel, albeit significantly cleaner than oil-based fuels, LNG would remain an intermediate solution to emissions reductions.
Derek Novak, Chief Engineer at the American Bureau of Shipping (ABS), reported that he sees the bulk of their clients implementing a variety of strategies. “Scrubbers are installed on 15 percent of all ABS Classed ocean-going vessels, many of these with open loop. We see a learning curve on the operation of scrubbers, but most of the issues can be resolved by applying some best practices. There have been some technical issues with installations, and some system failures, but the operations of these systems are not very complicated. We do expect more feedback as we go along though,” he noted.
Solutions for the shift
Capt. James C. DeSimone, COO of Staten Island Ferry, is seeing decisions driven by fuel availability: “Many shipowners think heavy fuel will not be readily available in the future, so they are not investing in scrubbers.”
Jennifer States, Director for Blue Economy at DNV GL and Project Director for Washington Maritime Blue, observed that lighter fuel seemed to be emerging as the more popular solution, with fewer scrubbers installed than had been predicted. Noting that initial estimates predicted around 4,000 ships operating with exhaust gas cleaning systems by 2020, she confirmed that about 2,800 vessels had been fitted with scrubbers by year-end 2019.
Neither path is without challenges, noted Michael Carter, Acting Associate Administrator for Environment and Compliance in the US Maritime Administration (MARAD): “There are issues with burning fuel other than what an engine was designed for, including insufficient lubrication, excess wear, and so on. With scrubbers, the catalysts used to remove sulphur from exhaust can leave particulate matter, and managing that waste is a challenge.”
Snyder pointed out that companies operating in the U.S. have to comply with Environmental Protection Agency’s Tier 4 emissions regulations, and asked how this requirement would influence the operational and design strategies for U.S. owners and operators
“We are typically docking in heart of a city, so we are required to comply with Tier 6,” Tuteja responded. “We are aggressively pursuing solutions for that. Scrubbers and selective catalytic reactors are options for port stays and maneuvering in harbors, and we are retrofitting to accommodate shore power. Moreover, we see these as good contributions to cleaner air, regardless of requirements.”
Braastad added that many vessels are being fitted for shore power, but land power installations are not following suit. “What will operators do if this pattern continues?” he asked.
“We know that Port Everglades has looked into shore power costs, but USD 25 million per berth is a big investment for a limited number of customers,” Tuteja offered. He added that each cruise ship would require as much as 5-10 MW of power while berthed, a major drain even for a large port like Miami. “Norway is taking a leading role on shore power, as is California. But it is important to look at where ports get their power. Gas and coal generation is getting cleaner, making them more attractive, but even cleaner energy upstream is the long-term answer.”
States pointed out the importance of planning in the implementation of shore power. “Utilities are saying that the business case does not always make sense. With relatively few ships using shore power seasonally, there may not be enough utilization to payoff infrastructure costs. Now is when we need to get everyone working together to find out how to better plan and recoup investments. Energy planning cooperation needs to go broader, to bring stakeholders together to meet future needs. California has said it wants to impose cold ironing for all ships, but this may need to be followed up by complementary measures to balance out the financial burden.”
Fuel in different forms
Jostein Bogen, global product manager for energy storage and fuel cells at ABB Marine & Ports, asked whether fuel cells could provide solutions on ships and on shore.
“We are looking at hybrid systems for our ships. In fact, we are doing a fuel cell study,” Tuteja replied. “We also developed a prototype with ABB and Ballard Power Systems. Storing hydrogen on board a vessel carrying passengers is still a hurdle we need to address, though.”
Carter said that onshore installation is also being considered as an option for fuel cells. “The Department of Energy is looking at how to electrify ports using fuel cells. These measures would offset other emissions. They are looking into applications for hydrogen in the maritime space. The harbor workboat fleet and other users could potentially be added to the mix.”
States mentioned electrolysis technology suppliers looking at moving into the maritime sphere. “This is a good opportunity for many suppliers with established business in other industries,” she said, adding that clean hydropower in Washington State gives local companies a natural advantage. States helped to head up a regional Maritime Blue forum designed to bring such players together. “We are looking to establish a maritime R&D agenda for hydrogen, batteries and alternative fuels, but first we need to identify the maritime industry’s needs. By getting stakeholders to come together and tell us their needs, we can start to create the pipeline for solutions.”
Opinion, authority or economy: which is more powerful?
The participants were asked whether public opinion was becoming a major influence on stakeholder choices.
“It is more the local authorities that are driving change,” Tuteja replied, though conceding that youth activism and the public awareness on climate change are shifting opinions. “The first question in Scandinavia is now about the environment, and this is driven by the strong public sentiment. I think the rest of the EU is also feeling the same pressure.”
Ole-Jacob Irgens, Global Sales Manager, Propulsion Solutions at ABB Marine & Ports, added: “I think over the past few years the light bulb is going on over peoples’ heads. There is a definite acceleration of initiatives in more market areas, but awareness is still growing gradually.”
Novak agreed, noting that container ships were being rated for emissions, but not yet garnering the same attention as the cruise segment. States concurred that while public attention to the cargo segment remains relatively limited, consumers are certainly becoming more aware of the impact of their purchases.
Bradley Golden, professor at Webb Institute, confirmed that the general public is seeing global shipping as more of a concern. “Shipping is still the most efficient way to move goods, but Emission Control Areas’ and IMO regulations are gaining momentum. Relative emissions are small, but they are being increasingly challenged. All global shipping is being pressured to clean up.”
States noted that despite the growing impact of regulations, shipping’s ultimate motivation to change may be financial. “Bonds and other finance solutions are becoming key drivers. The question for the future is, will the banks support shipping that is not green?” She cited the Poseidon Principles, under which major shipping banks will for the first time integrate climate change considerations into their lending decisions in order to push shipping toward decarbonization. “Investments won’t be made unless owners have future-proof plans for their vessels,” she said.
Snyder noted that emissions have become a major factor in the offshore support market. “The oil companies are very aware of pressure from investors to show reduced emissions, and ship operators want to be more attractive on the charter market. They are using digital technology, monitoring, and more efficient logistics to clean up. Is the pressure in the freight segments coming from cargo owners in the same way?”
Novak offered that the primary pressure for now is coming from regulators, but to a growing degree from cargo owners.
“In any case we cannot do it all by ourselves,” Tuteja said. “OEMs, class, academia, and owners all have to be involved. It starts with prototyping and learning. We are all obliged to do the right thing, but our actions have to balance with our economy, and provide sustainability.”
Seeking stability in times of change
Braastad acknowledged that rapidly evolving regulations present challenges to shipowners: “How can a shipowner in this environment plan for a newbuild that will last for more than 30 years?”
“A decision on fuel will last the life of the ship,” Tuteja acknowledged. “This is why energy efficiency has become the new guideline. Each new class of vessels will be better than last. Carbon neutral is the ultimate goal, but eventually it will become too complex to clean carbon fuel. In the long term I think we will have to shift our focus to alternative fuels. For example, where we have moved to LNG technology we are al-ready looking at how to transition to green LNG. The same process applies to biofuels and synthetic fuels.”
Ethan Wiseman, Assistant VP, Fleet Manager at NYC Ferry, NYCEDC, maintains that the new reality demands addressing the dual challenges of decarbonizing as much as possible while still meeting market demands. “There is no single solution that fits all needs. Different routes will have to be found to meet different needs.” For example, he acknowledges that while Tier 4 is not reachable for all vessels, newer ships that able to comply will fill in the gap.
“We have three new Tier 4 vessels, so we are moving in the right direction” offered DeSimone. “But public ferry operators are subject to public opinion. We can examine available technologies and figure out which risks can we take, but we are obliged to meet public requirements. We cannot use passenger ferries as experimental projects. The technology has to be reliable and proven before we can embrace it.”
While Denmark and Norway have provided federal mandates to implement new propulsion technologies on passenger ferries, the State of New York has not gone as far, he observed. “Under the present circumstances we cannot rely on experimental technologies for primary service.” Looking forward he noted that moves from the IMO toward 2050 will likely open more doors. “More vessels with new solutions will be operating by then, and we will have more experience to draw on. Electric power is looking more like safe bet, and this could become our prime mover over time.”
States emphasized that the Washington State Ferries decision to go with electric hybrid solutions provided a noteworthy example for the industry: “The Governor has provided a great example of what a state can achieve by declaring for this option, but the existing regulations are not always aligned with implementing the new technologies. An even stronger signal would be to craft regulations to encourage or promote emissions reductions with even greater predictability and support. Regulations can guide the market in the right direction if they are realistic and robust.”
