The western world’s most important shipbuilding fair, SMM 2024, which took place in Hamburg in the first week of September, once again offered a range of technological know-how and solutions for increasingly modern, better – because more sustainable – ships that, above all, pollute less. However, the real breakthrough was not to be found here either. Because the wait is on: for alternative fuels that are both clean and contain enough energy to propel the often large and heavy ships efficiently.
In every issue of SWZ|Maritime, SWZ|Maritime’s editor-in-chief Antoon Oosting writes an opinion piece under the heading “Markets” about the maritime industry or a particular sector within it. In the September 2024 issue, he provides insight into the visions presented at SMM regarding alternative fuels. The opinions expressed in this article are those of the author and do not necessarily reflect those of the publisher, the SWZ Foundation, the KNVTS, or other editors.
This leaves the search for the Egg of Columbus for the future of world shipping wide open. Or perhaps it cannot be found at all, and the solution should instead be sought in many smaller-scale technical solutions to make ships more economical and, thus, cleaner. And an important warning came from the CEO of marine engine builder MAN Energy Solutions SE, Uwe Lauber, not to throw away technology that with further development could perhaps be made a lot cleaner: the use of LNG as fuel.
An exciting debate thus unfolded in the forum during the official opening of the 31st edition of the SMM and the press conference linked to it, with industry representatives such as the MAN chief, joined by Knut Ørbeck- Nilssen, CEO of DNV Maritime, and Alberto Maestrini, chairman of VARD and head of the Offshore Division at Fincantieri on one side, and Magda Kopczynska, director general DG Move, EU Commission (EC), on the other. Because the EC has determined that LNG can only be a transition fuel in the drive to achieve an emission-free world by 2050, and LNG must be phased out as a marine fuel after 2035.
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EC: LNG is a no go
The EC official made it clear that LNG is a solution for the short term, up to 2030 or perhaps, with additional measures to reduce CO2 emissions, until 2035, ‘but LNG is not a long-term solution’ to make shipping carbon- free. ‘It is just a matter of time’, according to Kopczynska, until the shipping sector will have to speed up its efforts to decarbonise and submit to the energy transition in using non-fossil fuels. Therefore, the maritime industry and shipping sector have to invest in the production of alternative fuels.
But to date, this happens far too little. A few initiatives here and there are developing green corridors between ports that are building infrastructure to provide alternative fuels like methanol. At the forums and presentations at SMM, there were warnings from all sides that it will be utterly impossible for the time being to produce enough methanol and biofuels to meet the future needs of world shipping. In fact, the infrastructure expansion for bunkering LNG has only just come about.
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50% alternative fuel
Stephen Gordon, global head of Clarksons Research, a data and intelligence provider for shipping, trade, offshore and the maritime energy transition, notes that alongside the healthy order flow, “green” investments remain crucial (energy security has risen up the agenda since the last SMM). Over fifty per cent of global tonnage in the orderbook is now alternative fuel capable (SMM 2022: forty per cent), with the share of orders for LNG dual-fuel increasing this year relative to methanol (7.1 million versus 2.1 million CGT through August, excluding LNG carriers).
But he also warns that investments at ports continue to lag behind: there are now 192 ports with LNG bunkering facilities (+82 being developed) and 208 ports with shore power connection.
It is not that shipowners sit back and do nothing. According to Clarksons Research, 34 per cent of the world tonnage is already equipped with significant energy saving technologies (ESTs). Despite the progress, there is still a huge way to go with Clarksons’ projections suggesting strong long-term fleet renewal requirements ($ 5.3 trillion of newbuild orders through 2050) driven by ageing fleets (fleet average age up to 13.9 years) and decarbonisation (shipping is responsible for approximately two per cent of global emissions, or 1 billion tonnes of CO2e). ‘We made a start, but we are only at the start,’ Gordon said.
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A greener fleet in 2030
Gordon gave a few projections in advance of the SMM: ‘Today, about seven per cent of global tonnage is capable of using alternative fuels, principally LNG. We see by 2030 that over twenty per cent of the global fleet will be able to burn alternative fuels, either the LNG, methanol, and ammonia that we are seeing today, but potentially there will also be other options. So, we see the fleet in 2030 being larger. We see the fleet being greener. We also see growth in trade, but this is accompanied by having to manage all the complexities of the energy transition and the disruption due to all the geo-political unrest around the Red Sea and the sanctions against Russia.’
Despite the meagre twenty per cent figure from Clarksons’ forecast, new IMO secretary-general Arsenio Dominguez and MAN CEO Lauber insist that zero CO2 emissions for international shipping are achievable by 2050. ‘2050 is achievable. Look at all the technologies that have been and are still to be developed,’ Dominguez stated at the SMM opening session. ‘It is not a slow transition. But one has to take into account that not all states are at the same level of transition.’
Lauber also insists that shipping is on the right track: ‘We have the technology’, but the only uncertainty lies in the availability of CO2-free fuels. Therefore, production of synthetic fuels needs to be stepped up.
Huge investments needed
But to develop the non-fossil fuels and infrastructure to make them available for international shipping requires huge investments, money that, for a great deal, must be earned by the shipping sector itself. ‘We are working on efficiency of engines, propellors. All cornerstones are available,’ Lauber said.
Captain Silke Lehmkoester, managing director Fleet at Hapag-Lloyd stated that her company is investing massively in retrofitting its container ships with ESTs. Where some 25 years ago ships were built to be as fast as possible, they now are designed to be as fuel-efficient as possible, which means they will sail much slower (slow steaming).
Shipowners are still hesitating to have new ships built for other non-fossil fuels as they still don’t know what will be the most economic choice on the longer term. ‘There’s a lot of investments going on, and there’s a lot of movement, but there are still a lot of uncertainties as well. Will we have all the necessary fuels available in time? What will be the role of ammonia?’ Lehmkoester asked. She stressed that the container lines are involved in a fierce battle of competition. ‘Costs do affect us. How can we stay competitive and at the same time invest in quality?’
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EU is too bureaucratic
According to Lauber, the European Commission is too bureaucratic with its policy on marine fuels. ‘The way decisions are taken in the EU is a disaster. There is debate after debate, but what is missing is decision making. The money is there, the technology is there, we need hydrogen, but I don’t see any action. The plan to act is not there,’ Lauber said in the opening session. And mainly because that production of alternative non-fossil fuels is so slow to take off, he strongly opposes the European Commission’s anti-LNG policy.
‘LNG is not only a bridging fuel. In the coming decade, we will see what propulsion on LNG can still bring us on our path towards zero emission. And if this doesn’t bring enough, an LNG engine can easily be converted to run on methanol,’ Lauber said. ‘LNG is not evil personified’ like the EC and other critics would have us believe.
He is joined in this by DNV Maritime’s CEO Ørbeck- Nilssen, who also still considers LNG to be a good choice for propulsion of ships. ‘LNG still offers a lot of opportunities to reduce the emissions of CO2. It depends on the input of data. Energy-efficiency also has a lot of potency to reduce CO2 emissions,’ Ørbeck-Nilssen said.
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Carbon capture and storage
With Lauber, the chief of DNV Maritime also sees a lot of opportunities for and potential in the technology of carbon capture and storage systems that filter CO2 out of the emissions from the smokestack of LNG-fuelled ships. And he stated that building new ships with LNG propulsion is still a good choice.
‘There are several pilot projects to reduce CO2 emissions while using LNG that show quite promising results.’ According to Ørbeck-Nilssen, it is more a systematic question of where to deposit the methane and CO2 that have been filtered out of the emissions. Lauber added to this that with current technology up to forty per cent of CO2 can be captured from the exhaust gases of ships powered by LNG.
Lauber’s vision is shared by shipbuilders such as Maestrini, chairman of VARD and head of the Offshore Division of the big Italian shipbuilding conglomerate Fincantieri. ‘LNG is still a viable solution that brings a significant reduction of climate-endangering emissions.’ The big advantage of LNG, according to Maestrini, is its much higher energy density compared to other alternative fuels, notably hydrogen and many synthetic e-fuels. ‘With hydrogen, you need six times more storage for the same amount of energy. Therefore, we should be careful to throw away LNG until other good solutions are available.’
Respond to this article by sending an e-mail to Antoon Oosting, editor-in-chief and author of this article: swz.rotterdam@knvts.nl.
Cartoon by Hans de Wilde/SWZ|Maritime.
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