ABB Marine & Ports gathered maritime industry leaders to discuss how shipping is to reach decarbonization targets. Focus turned to diversity rather than uniformity of solutions, and flexibility in vessel design to ensure adaptability as suitable solutions emerge.
Moderator Edwin Lampert, Executive Editor & Head of Business Relations, Riviera Maritime Media, started off by challenging participants to grade the industry’s chances of success in reaching the International Maritime Organization’s (IMO) 2050 decarbonization objectives, on a scale of one to five. When all votes were cast, Lampert gave the group an average score of three, balancing technical optimism with political pragmatism.
The next segment of the roundtable discussion touched upon five topics, each dedicated to exploring a pressing issue on the maritime industry’s decarbonization agenda.
How are regulations driving the shift to zero emission shipping?
Rens Groot, Innovation and Performance Manager with Berge Bulk, took the first swing, establishing that the main agenda for shipping is to reach carbon neutral shipping, with plans on track to have the first zero emission ship on the water by 2030. “The first stake is in the ground already, and we are very proud of that. Now the IMO is pushing regulations and we have to follow suit. We believe the Energy Efficiency Design Index (EEDI) and the International Convention for the Prevention of Pollution from Ships (MARPOL) directives can be effective tools to align a scattered worldwide industry.”
Imran Ibrahim, Principal Consultant, Head of Research and Development, in DNV, noted that, in addition to the EEDI, the Energy Efficiency Existing Ship Index (EEXI) could be responsible for driving changes in design efficiency.
“Regulations are at the heart of the movement toward sustainable shipping,” offered Anis Hussain, KMDTech General Manager. “If not for regulations and the IMO, we would not be doing this in the way we are now. I am happy to see the IMO come up with major support for development funds, taking initiatives and promoting decarbonization actively. They are aiming for the 2050 goals, but they also have given us targets along the way and that is very heartening.”
Kenneth Lim, Chief Technology Officer and Senior Director, Innovation, Technology & Talent Development with the Maritime and Port Authority of Singapore (MPA), believes that decarbonization is driving developments thanks to IMO targets. “The IMO 2020 sulphur cap has shown that everyone may have to scramble, but eventually they meet the targets. We have a bit more time going toward 2030, though, and that is good.”
Regulations will overshadow choice, Sanjay Kuttan, Executive Director of Singapore Maritime Institute (SMI), argued. “Compliance is a far stronger motivator for change than choice. Not everyone is convinced that we have an existential issue, so they must be required to act.”
ABB Marine & Ports Singapore Local Division Manager Mahesh Krishnappa pointed out that regulations would increasingly influence deliveries from suppliers: “Our focus on electric, digital and connected solutions is organic, but also aligns with industry goals. In this way, regulations are guiding not only owners’ decisions, but also those of Original Equipment Manufacturers (OEMs). It is important to align all partners in the maritime ecosystem towards regulation.”
Hitting a moving target – designing and building for a dynamic future
The design of the future, Groot maintained, will be modular. “We don’t know the future, so we must be able to adapt. Hybrid and electric platforms must be able to be incorporated. Buying a ship today, you would have to be ready for the various development scenarios.”
Kuttan pointed out that the very word ‘future’ may serve to make stakeholders complacent. “We are fighting against the timeline of climate change, and we need to prevent the tipping point from actually happening.” Two parameters stand out, he said: “If we are going to reach a sustainable future, we need both scale and pace.”
He emphasized that future-proof means flexible. “But if you add flexibility into design there is always a cost, so the CEO and CFO will have some big debates here. We need to invest in flexibility for the future, even if it does not pay off today. This requires leadership to guide the flexibility choices.”
Kuttan pointed out that designers are prepared to hit the moving target of emissions goals: “Digitalization provides a viable platform for development. The technology around analysis supports good decisions and the ability to try various scenarios in the design phase. Using these platforms effectively, future planning can be accelerated.”
Krishnappa noted that some owners are looking as far as 25-30 years ahead when ordering ships today: “This is a good challenge. They may not always hit the mark, but at least the majority of projects will be pointed in the right direction.”
“The future will not converge on one solution for all vessels and segments, at least not in the foreseeable future,” offered Alf Kåre Ådnanes, AMEA Regional Division Manager at ABB Marine & Ports. “The right choice today may not be right in 10 or 15 years, so we will need to build in flexibility, to make sure we can take advantage of the best available options as they emerge.”
Head of Regulatory Affairs in ABB Marine & Ports, Eero Lehtovaara, emphasized diversity as the touchstone of the future: “There will be no silver bullet. We need to be looking at the big picture if we are going to get it right.”
How are the different segments responding to future-proof requirement?
As the most technically feasible segment for alternative fuels, Ibrahim nominated the coastal and short sea trade, citing a variety of likely solutions including batteries, fuel cells, and hydrogen. “For deep sea, liquefied natural gas (LNG) is still the most viable fuel option. Uptake of new fuels here is still slow, and LNG is better than heavy fuel. LNG has been slower in coming than we initially thought, but there is growing interest in the market. We have also seen electrification coming on in this segment.”
Hussain projected that different segments will progress at different paces: “They will not have the same momentum. Also, there is a big gap between those in front and those following behind.” Not to say that everyone isn’t trying, he assured. “But smaller players generally tend to lag behind, while the bigger players have deep pockets to meet initial outlay. There is no blame here of course, simply a lack of resources in smaller companies.”
Lim believes another major factor will be fleet renewal: “Companies will need to renew their fleets, so they have to start thinking, ‘What is our next vessel going to be?’ They are starting now to look at 2030.”
Preparing for increased electrification of operations
Electrification of operations, Kuttan believes, is a low-hanging fruit. “We have the technology to help us here, but electrification is not enough as such. We need to increase the efficiency of power systems to extract the full value of electrification.”
Groot noted that the industry is working hard to advance electrification, but may in fact just be getting started: “Optimizing the direct current (DC) grid and frequency control is still a learning experience. Electrification is absolutely crucial, though. Even if our solutions are not the most efficient right now, we will get there.”
Hussain said the challenge could be compared with the move from heavier fuels to LNG: “Who will provide and control the infrastructure? Right now the institutions are taking the lead, but what happened for LNG will happen for electrification, so the trend toward electrification will continue.”
Liza Chua, Associate R&D Engineer, Electric Solutions in ABB Marine & Ports, pointed out that options will not be the same for all vessel types: “Location will be a determining factor, and certain types might have advantages and stronger motivation to go electric. In the case of Singapore, those operating in port can go to electric solutions sooner.”
Stakeholders will need to see the advantages before they move forward, she maintained. “They will target the most likely segments first and move forward from there. Once they can see the advantages, others will make their moves.”
Future fuel mix: who’s driving, and where are we going?
Stating DNV’s support for introducing alternative maritime fuels, Ibrahim reported that they are actively exploring several sustainable fuel alternatives. For the interim, he confirmed DNV’s advocacy of LNG as a viable fuel choice.
Different fuel types will play different roles, said Hussain: “LNG is an improvement, but it does not provide a zero carbon outcome. Methanol, hydrogen and ammonia each have their own negatives and positives. It will be a mixed bag until we agree on a homogenous solution. The OEMs have engines for several fuels including ammonia, and also hydrogen fuel cells. It’s good to have various technologies advancing on the market, because the customers will ultimately be the ones to choose.”
Groot described development as driven by the OEMs and energy companies for the time being. “But biofuels, and maybe even nuclear solutions, could come from outside those circles. We can’t really say who might be driving this development, but we are testing in order to be prepared.”
In order for new fuels to become viable, Lim believes that stakeholders need to support the development of infrastructure. “We are working to establish a future fuel network in Asia to see how we can share experiences.”
Kuttan maintained that the oil companies risk the greatest loss, but are still in a position of power. “Unless they make the decision to join the change to a sustainable future, the industry will have to make the changes themselves. But do we want to change the entire infrastructure, or figure out how to manage current infrastructure? Here the incumbents will play a major role.”
“We need to remember that more than 50 percent of the global fleet are small vessels owned by small companies,” Lehtovaara pointed out. “They will face real challenges, and it is not a case of one size fits all.” He does want credit where credit is due, though: “The ultimate solution is still unclear, but we are often too hard on ourselves. Shipping is the most efficient means of transportation by far, and owners have already done a lot to improve efficiency.”
In the next segment of the session, Lampert invited all participants to an open Q&A session, posing a series of questions around the room, and on screen.
What are the greatest barriers to an all-electric revolution?
Ådnanes: Financial and economic factors represent the biggest barrier, simply being able to explain and justify investments. Owners will have to be able to justify huge outlays with payback.
Lehtovaara: I followed the recent IMO Marine Environment Protection Committee (MEPC) meeting, and I found it in many ways more confusing than edifying. I got the feeling that it was very unclear what can actually be done. The industry does not really seem to be seeing the big picture yet.
Lim: First, the color of electrons will be important, whether they are blue or green. If they are not green, the solution will not be viable. Secondly, I would ask myself if we are serious about building a sustainable future. Do we really have an existential issue with emissions? Are we really trying to reach the CO2 targets? In this sense the issue is behavioral – how we regard regulations and how we will act on them to reach the targets.
Has the shipping industry achieved its ‘iPhone moment’?
Groot: The iPhone gathered everything on one platform and made it connectable. Digitalization allows for greater connectivity, and better connections to our suppliers can help with remote diagnosis. But if we go to a yard with something that is new for them, their risk goes up and business cases fall apart. In this way I don’t think we have had our true iPhone moment yet.
Huge financial investments will be required to accommodate the future fuel mix. Who will be responsible for these investments?
Lim: We will need to see more public investment in R&D. We need to get the infrastructure in place and learn from experience, what works and what does not. But financial players are not aware of the technological evolution, and many are hesitant. This is due to lack of specific knowledge and insight. We cannot go to them at the last moment and ask them to buy in. We need to bring them in early, so they can learn and assess by the time investment is needed.
Ådnanes: Investment is needed in green infrastructure and transport, but let’s not forget that production of oil and gas is not free either. Huge investments have been made here, both offshore and onshore. Now we are in need of green and sustainable solutions. Why not invest in green technology instead, or in addition to traditional infrastructure? It should be possible to route some of these investment to green solutions.
Krishnappa: In the shift from conventional coal-fired energy to renewables, the power produced is available for electrification in many parts of the world, and cost of renewable power generation is also going down every year. This can be used by the maritime industry. The whole world is looking to shipping be more efficient, also increasing safety and productivity. Now investments are required to enable the vessels of tomorrow. These investments will be need to come from every player in the maritime ecosystem.
Which course will shipping take? Participant predictions for 2021, 2030 and 2050
2021: Nothing of note beyond what we have seen in 2020.
2030: Hard to predict, because the pace is so fast. Because of this, regulators will have a hard time keeping up.
2050: Fusion power becomes commercially available. Power generated on shore can be transferred to ships, but also shipboard power plants could emerge. The key driver here is energy density.
2021: The latest EEDI requirements are coming so soon that we will have to take some chances to make the deadline.
2030: We will have zero emission ships on the water.
2050: Zero emission will graduate to the fleet level. Automation and remote will be enablers here. These will also help to make it cool again to work at sea.
2021: Recovery from the setbacks of COVID-19 will be the first thing.
2030: Increase in the availability and uptake of current technologies.
2050: New technologies coming up, including many things we have not yet seen.
2021: Increased adoption of remote surveys.
2030: More focused decarbonization pathways for shipping.
2050: Normalcy in autonomy levels 3 and 4 in shipping, with wider adoptions of alternative fuels.
Alf Kåre Ådnanes
2021: I hope COVID issues are resolved and all the good designs and projects that have been put on hold can restart. These should provide good examples of how to move forward.
2030: IMO targets can largely be met by operational developments in the fleet, using LNG and improved operations. We will also see a gradual increase of electrification overall. I also believe that IMO 2030 goals will be met.
2050: By then we will need to see a significant green shift, including a mix of different fuels. Green fuels, perhaps predominately ammonia for larger, deep sea going vessels and hydrogen for smaller and short distance shipping, will have a greater share of the energy mix. A major part of the newbuilding fleet will be fueled with emission-neutral fuels.
2021: It would have been different without COVID, for better and for worse. For example, the acceleration of digital technology and digitalization that we have experienced would not have happened. It was slow to take off initially but has picked up fast due to travel and contact restrictions. Momentum that has been built up in 2020 will feed into 2030.
2030: Based on the 2020 IMO meeting, the EEXI (Energy Efficient Ship Index) will have a significant impact. Operational developments will also drive the decarbonization of big ships.
2050: If fusion becomes possible, we will see green solutions becoming viable. Also a differentiated fuel mix, including ammonia for long haul shipping.
2021: More good projects will kick off after COVID is resolved, and others will follow. Singapore is ready here, with projects for tugs and harbor vessels.
2030: We will see a shift in the way seafarers are working. Digitalization will change their lives.
2050: Regions will have established their own types of fuels in a complex ecosystem of highly regional perspectives. Singapore will be leading the way in automation. We could even see uncrewed harbor craft in operation.
2021: Various pilots of zero-carbon/hybrid propulsion solutions and regulation development.
2030: Policy and market incentives in place and scaling up of zero-carbon fuels. Zero-carbon ships sailing commercial deep sea routes.
2050: The transition to zero-carbon energy sources and technologies will be well established, with appropriate end fuels in place for each ship type and route.
2021: We will see more digitalization. This will open the door for greater collaboration throughout the value chain. Here, transparency in the exchange of data and information is important. Also the rise of a greener supply chain will drive sustainable technologies, and we will see the rise of sustainable, bio-based fuels, but not yet at the scale we need.
2030: Nature will send us a signal. If we have not done enough, we will see an increase in the rate of climate change. This reality may open the door to technologies like fusion. Right now the technology is there, but acceptance is not. We need a burning platform in order to ignite real support.
2050: Just hoping to still be around!
2021: The electrification of harbor craft is a clear goal. For international shipping, trials will be ongoing in Singapore for alternative fuels, including ammonia, methanol, ethanol, and hydrogen. The digitalization of power systems will contribute to decarbonization.
2030: The first set of zero carbon vessels will emerge. Safety and other benefits of this development will be key to further discussions, including how to retrain staff and crew in a new zero carbon reality.
2050: By then, today’s graduates will be 50, and leading the way to decarbonization. What they are learning today, will allow the industry to become more proactive in achieving a green supply chain. The responsibility will be in the hands of the next generation of leaders.