Marine News – Feature: Shipowners look to carbon as looming regulatory risk

By March 24, 2017August 17th, 2018Marine Fuel, Methanol Market

Singapore (Platts)–24Mar2017/912 am EDT/1312 GMT

With many in the shipping industry looking at ways to cut their sulfur emissions ahead of tighter limits being introduced in 2020, others are already looking at carbon as another problem that will face them in the coming years.

Global marine fuel sulfur content limits will be cut from 3.5% to 0.5% at the start of 2020, and further restrictions on nitrogen and particulate matter emissions are likely to be announced over the next decade.

But while the options for cutting these emissions are becoming increasingly familiar to the shipping industry, less thought has been put into how to reduce carbon emissions.

The European Parliament voted last month to include shipping in the European emissions trading scheme (ETS) as of 2023 if the International Maritime Organization (IMO) does not have a comparable system operating by 2021.

The vote was not binding, but indicated what the parliament will push for in negotiations with the EU’s national governments on changes to the ETS.

The IMO has criticized European moves to include shipping in the ETS, saying they could threaten its work on developing a global approach to cutting carbon emissions.

“Shipowners that want to be prepared for the near future” are starting to investigate low-carbon options, Astrid Sonneveld, head of international marine business development at biofuels marketer GoodFuels, said in an interview earlier this month. “Most of them want to have a plug-and-play solution in mind, something off the shelf to turn to as soon as carbon regulations arise.”

Reducing carbon dioxide emissions from marine fuels will be a more difficult proposition than cutting pollution from sulfur and other unwanted chemicals.

While sulfur can be removed from fuel oil either at the refinery or directly from a vessel’s emissions with scrubbers, it is less obvious how to reduce carbon dioxide output. Methods like using vessels more efficiently will need to be considered as well as finding cleaner fuels.

“Decarbonisation is a priority for now,” according to Catrien Scheers, chairman of logistics company Fast Group. “We have to see that all terminals are efficient energy wise and all vessels are efficient.”

Container shipping company Maersk Line is targeting a 60% reduction from 2007 levels in carbon dioxide emissions per container carried by 2020, and had managed a 42% drop by the end of last year.

Increasing average vessel sizes as well as vessel sharing agreements with other companies have helped the Danish firm in this.

But Maersk now says low fuel prices are encouraging it to increase average vessel speed, cutting fuel efficiency and raising emissions per container again.

Increased use of biofuels by the shipping industry may also help it to reduce its carbon footprint.

This month the Port of Amsterdam announced its fleet of five patrol vessels will use a blended product containing 30% biodiesel, with carbon dioxide emissions savings of 25% versus traditional marine diesel oil.

In an interview with S&P Global Platts in December, GoodFuels forecast that marine biofuels could take up 5-10% of global bunker fuel demand by 2030.

“We believe inclusion in the EU ETS to be an important first step towards low carbon shipping,” Sonneveld said. “It will not help to bring the market for marine biofuel to a next level, but in our opinion any kind of progress sends a clear signal — it can be done — to the IMO.”

For now, it seems unlikely that the majority of shipowners will start to address carbon emissions until the regulatory environment for them and other pollution is clearer.

There will be advantages for some early adopters in terms of their public relations and relationships with regulators, but for most the time to change practices will not come until both the law, and the best choice of fuel, are clear.

“We all have a responsibility to lower carbon emissions,” Scheers said. “Supply and availability of the fuel will be the problem.”

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–Edited by James Leech,