In Depth

What does the 2023 IMO Greenhouse Gas Strategy mean for shipping?

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01/25/2024 08:57:49

Cover Story

What does the 2023 IMO Greenhouse Gas Strategy mean for shipping?

The new greenhouse gas strategy agreed at MEPC80 has raised ambitions in the maritime sector to hit net-zero emissions by 2050. Keri Allan explores how the industry is evolving to meet these targets.

The 80th session of the International Maritime Organisation’s (IMO) Marine Environment Protection Committee (MEPC 80) agreed the adoption of a revised greenhouse gas (GHG) strategy. The objective – to significantly reduce GHG emissions from international shipping – now goes much further than before.

The revised strategy includes an enhanced ambition to reach net-zero GHG emissions from international shipping by 2050, a commitment to ensure an uptake of alternative zero and near-zero GHG fuels by 2030 and two indicative check-points.

These are to reduce the total annual GHG emissions from international shipping by at least 20% compared with 2008 levels – but striving for 30% – by 2030, and to reduce the total annual GHG emissions from international shipping by at least 70%, striving for 80%, by 2040, also compared with 2008.

The committee also agreed that measures for delivering the reduction targets should be finalised, comprising of two elements. First, there should be a goal-based standard to regulate the phased reduction of marine fuels’ GHG intensity. Second, there should be an economic element based on a maritime GHG emissions pricing mechanism.

Emission measurement criteria changes

MEPC 80 also changed the focus of the marine fuel emissions directive from combustion (tank-to-wake) to lifecycle emissions (well-to-wake). As a result, vessel operators can no longer just look to reduce emissions solely from fuel combustion. Now they will have to take into consideration emissions generated during refinery processes and transportation of the fuel to a bunkering port.

This could change the investment decisions of operators who were considering installing sulphur oxide (SOx) and carbon dioxide (CO₂) capturing scrubbers on their vessels, with the aim of continuing to run on high-sulphur fuels and then paying for the disposal of the captured material.

Making the IMO’s objectives a reality will require extensive modifications to the marine industry’s fuel and engine technologies.

We need tangible and immediate action from all industry partners.

One of the biggest challenges right now is the availability of low or zero-carbon fuels and related infrastructure at scale. Stakeholders responsible for investing in resources, production, bunkering, and port infrastructure require key information on the demand profiles for alternative formulations and the infrastructure required to unlock the investment case for producing and supplying these fuels.

“The availability of renewable energy will be the main bottleneck going forward,” says Muhammad Ilyas, head of green fuels at German international shipping and container transportation company Hapag-Lloyd. “We need tangible and immediate action from all industry partners, in the form of strong demand signals, and governments, in the form of financial incentives, to accelerate decarbonisation.”

“A greater demand for fuel readiness in specific regions could help to stimulate investments into infrastructure that will scale up supply,” adds Carlo Raucci, marine decarbonisation consultant at the Lloyd’s Register Maritime Decarbonisation Hub.

“For example, the Silk Alliance green shipping corridor cluster programme in Singapore – a collaborative zero-emission shipping partnership across supply chain stakeholders – aggregates alternative fuel demand in the infra-Asia container trade route, which will help drive investments into fuel supply infrastructure.”

Future fuels

“Developments are still ongoing, but what is clear is that some of the fuel options will need cryogenic storage,” notes Kenneth Kar, product solutions technology engineering associate at ExxonMobil Technology and Engineering. “These may require the development of new supply chains and bunkering technologies, along with revised approaches to on-board handling, storage and combustion.”

Vessel operators will need to assess fuel options based on their individual needs and operational profiles, but there are currently six options capturing the most interest: ammonia, biofuels, hydrogen, liquefied natural gas (LNG), methanol LNG, and fuel cells.

LNG is one of the most advanced options in terms of infrastructure, “due to its existence in the market for over a decade, making it easily sourced and available,” says Hrishikesh Chatterjee, promotion manager at MAN Energy Solutions, who goes on to note a sharp rise in interest in methanol-fuelled engines, as the company’s had over 160 orders for these this year.

This links to the rise in green methanol production, with approximately 80 projects in progress that are anticipated to generate almost nine million tonnes annually by 2027, according to the Methanol Institute.

“Shore infrastructure is also building up, but it’s limited due to lack of regulatory guidelines on low flash point fuels,” says Chatterjee. “Until then, ship-to-ship transfers are going to fill the gaps and more green corridor projects will pave the way on how it’s to be done.”

LNG is one of the most advanced options in terms of infrastructure.

Then there’s the rise in green hydrogen, thanks to an increase in national hydrogen strategies around the world and more countries investing in renewable energy and land-side hydrogen infrastructure, as Raucci highlights.

“North America and Europe have taken the lead in implementing initiatives to encourage low-emission hydrogen production, while China has taken the lead of electrolyser deployment,” Raucci says.

In terms of biofuels, bunkering infrastructure is already in place in Rotterdam and Singapore and with demand increasing, more ports are making biofuel blends available, notes Ilyas.

ExxonMobil points to biodiesel as also being a good candidate, due to being a “drop-in alternative”, and it’s already successfully bunkered its marine biofuel oil – a blend of conventional marine fuel and a bio-based component derived from fatty acid methyl esters (FAME).

“Longer term, new fuel formulations are possibly the answer and ExxonMobil is reviewing potential candidates,” explains Kar. “We are also consulting with our customers and the wider industry to help understand how we can help deliver the products and services they want, when and where they need them.

The energy transition is already well underway

With more than 57% (over 1,250 units) of MAN’s newbuild orders being for dual-fuel technology, the engine manufacturer believes that the energy transition has come into full momentum and it’s just a matter of time before this will be the default choice for all newbuilding.

“From a technology provider’s perspective, we’re proud to say we’ve pioneered the development of dual fuel technology, using the same base concept as our electronically controlled ME engines. Hence all our ME engine designs are retrofittable to any other dual fuel technology. We’ve proved it doing retrofits for LNG, LPG and ethane, and have upcoming large projects for methanol retrofits,” Chatterjee says.

In terms of what fuel will come out top, industry experts all agree that the future most likely to play out will be multi-fuel. This is because it’s unlikely one single fuel will be able to meet the needs of every operator in their pursuit of meeting the IMO’s ambitious targets.

What is clear, however, is that industry-wide collaboration will be needed to get the fuels and related infrastructure in place in time to meet these carbon intensity reduction targets.

01/25/2024 08:57:49

Feature

Peril on the high seas: the Yemen oil tanker and the menace of oil spills

The Yemen oil tanker crisis serves as a grim reminder of the environmental risks associated with oil spills in war-torn and disturbed regions. Ashima Sharma investigates.

Pumping oil from the FSO Safer to the relief ship, Nautica. Credit: AFP/Getty Images

The ironically named FSO Safer, an oil tanker moored off the coast of Yemen for six years, carried with it the looming disaster of an oil spill. Holding 1.1 million tonnes of oil, the decaying floating production and storage vessel lay afloat in the Red Sea, unclaimed, only to be termed the “ticking time bomb” that could spill its massive cargo at any time.

If a spill were to occur, it would be the fifth largest in history. It would have disastrous ramifications for over 17 million people caught in a civil war in the country relying primarily on humanitarian aid. Clean water supply would be disrupted and losing access to fuel would mean shutting down things like hospitals and water systems.

According to the UN, the oil would have slicked to the African coast, damaging 25 years’ worth of fish stock and affecting close to 200,000 jobs in communities that often rely on fishing.

A study by researchers from Stanford University found that the risk of hospitalisation due to cardiovascular or respiratory problems following an explosion would increase by 530%.

And while all these scenarios were highly likely if a spill or an explosion occurred, the disaster was averted in August this year. A team of rescuers pumped between 4,000 and 5,000 barrels of oil from FSO Safer every hour to a replacement vessel, held by the UN.

The rare path away from oil spills

The UN engaged with this potentially catastrophic threat uniquely by raising a crowdfunding appeal to purchase and offload the vessel.

In May 2022, the UN staged a rare donor conference to raise $80m, taking a year to acquire the funds. 23 UN member states funded the mission, with Yemen’s largest private company, Hayel Saeed Anam Group, also donating $1.2m in August 2022.

While one disaster was averted, others await. Even after the transfer, the 47-year-old decaying tanker will “continue to pose an environmental threat resulting from the sticky oil residue inside the tank, especially since the tanker remains vulnerable to collapse,” the UN said. The agency still needs $22m more to finish the job.

Adding to this, the recovery vessel could be stranded until it is decided who owns the oil, and can therefore profit from its sale.

Oil spills caused by war, conflict, and theft represent a distressing reality that exacerbates environmental degradation in some of the most ecologically and territorially sensitive regions.

In countries experiencing conflict, critical infrastructure and oil facilities are often neglected or become targets, leading to spills. Conflicts can also exacerbate the challenges of oil spill response and clean-up.

A potential spill from FSO Safer would have cost $20bn to clean up. The vessel contained four times the amount of oil spilled by Exxon Valdez off the Alaskan coast in 1989, which caused a slick of 1,300 miles.

If one oil tanker can raise such concerns, what next?

The necessary resources and coordination to contain spills are often scarce, leaving local communities and ecosystems to bear the brunt of the consequences. In 2021, a tank filled with 15,000 tonnes of fuel leaked from a thermal power plant in Syria, into the Mediterranean Sea.

Officials at a press conference by Yemen’s Houthi deputy foreign minister Hussein Al-Ezzi about the progress of the FSO Safer‘s oil removal to the new replacement vessel Nautica. Credit: Mohammed Hamoud/Getty Images

For Syria, another country faced with civil war, resources to manage the 800 square kilometre-large spill were meagre. Residents from the town of Baniyas, where the spill occurred, told CNN: “The government only sent teams with sponges and water hoses; they do not have the capacity to deal with this… you cannot clean the sea with sponges.”

Spilled oil forms a slick on the water’s surface that blocks sunlight and oxygen exchange, causing marine life to suffocate. The effects on the smallest animals amplify higher up in the food chain, affecting birds, mammals, and even humans who rely on these ecosystems for sustenance and income.

The Gulf region, where the Yemen oil tanker crisis unfolded, is particularly vulnerable for its rich marine biodiversity and importance as a fishing ground.

Big oil polluters and the impact of vandalism and conflict

Nigeria is a case in point for pipeline vandalism. The country was Africa’s largest oil producer, dropping to its fourth in 2022 according to the International Energy Agency. Nigeria loses an average of 470,000 barrels of crude per day to theft and pipeline vandalism.

The National Oil Spill Detection and Response Agency of Nigeria has estimated that oil companies have lost NGN803bn ($1.04bn) in crude oil to spills suspected to originate from sabotaged pipelines and operational issues in 2022. The country lost NGN362bn ($470m) in 2020, and NGN674bn ($870m) in 2021.

In the Arctic, the biggest oil spill came from Russia in 2020. When a fuel storage tank at Norilsk-Taimyr Energy’s Thermal Power Plant failed, it flooded local rivers with up to 17,500 tonnes of diesel oil. Russia also has an unruly history of oil spills.

According to Russia’s Ministry of Energy, there were over 17,000 leaks in 2019, mostly from pipelines. This data suggests that an oil spill happens somewhere in Russia almost every half hour.

Presently, Russia presents a unique challenge and a threat of spills since its invasion of Ukraine. With Western sanctions affecting the movement and use of Russian crude, big oil insurers have warned of Russia’s “shadow tankers”, that move without third-party liability cover from “well-tested” insurers.

This means that traders with less experience are now moving crude over longer routes in less suitable vessels with unknown insurance provisions. With shadow or ghost fleets now carrying Russian oil, the threat is multi-fold on risk and accountability of a potential spill.

The interplay between conflicts, theft, and oil spills is a sobering reality that exacerbates environmental challenges in regions already grappling with instability. People in Iraq are still reeling under the impact of an intentional spill by Iraqi forces in the 1991 Gulf War.

Iraqi forces leaked over 240 million gallons of oil into the Gulf, and upon retreat from Kuwait, set more than 700 oil wells ablaze. The spill caused a nine-mile slick in water and led to the formation of nearly 300 oil lakes in a desert. In 2021, The Guardian reported that 30 years on, the country still battles with polluted water and contaminated soil.

The Yemen oil tanker crisis serves as a clear and present reminder of the grave environmental risks associated with oil spills. These disasters can wreak havoc on marine ecosystems, livelihoods, and human health, making them an international concern.

Those who clean the spills, as in the case of people who were hired to clean up for BP’s Deepwater Horizon explosion, today suffer from cancer and other illnesses owing to toxins in the oil. Years on, the environment and every person in it continue to take a silent hit in a conflict-oil spill nexus.

01/25/2024 08:57:49

In Depth

What does the 2023 IMO Greenhouse Gas Strategy mean for shipping?

Also in this section

What does the 2023 IMO Greenhouse Gas Strategy mean for shipping?

The new greenhouse gas strategy agreed at MEPC80 has raised ambitions in the maritime sector to hit net-﻿zero emissions by 2050. Keri Allan explores how the industry is evolving to meet these targets.

Emission measurement criteria changes

Future fuels

The energy transition is already well underway

Peril on the high seas: the Yemen oil tanker and the menace of oil spills

The Yemen oil tanker crisis serves as a grim reminder of the environmental risks associated with oil spills in war-torn and disturbed regions. Ashima Sharma investigates.

The rare path away from oil spills

If one oil tanker can raise such concerns, what next?

Big oil polluters and the impact of vandalism and conflict

The new greenhouse gas strategy agreed at MEPC80 has raised ambitions in the maritime sector to hit net-zero emissions by 2050. Keri Allan explores how the industry is evolving to meet these targets.