Greenhouse Gas Reductions In The Shipping Industry: What You Should Know

Almost everyone in the shipping industry is talking about greenhouse gas reduction. What exactly are greenhouse gases? And why are players in the shipping industry trying as much as they can to play their part in its reduction? Let’s get to the basics?

What are Greenhouse Gases?

Greenhouse gases are gases in the atmosphere that have an influence on the earth’s energy balance. They cause what we call  “the greenhouse effect” which is another fancy name for a process that involves the trapping of heat in the atmosphere, causing the earth to be warm. The best-known greenhouse gases – carbon dioxide (CO₂), methane, and nitrous oxide – are all available in low quantities in the atmosphere under normal conditions. The problem is the quantity of these gases has increased since the beginning of the last century due to various man-made activities (and yes, that includes shipping & logistic activities). These amplified levels of greenhouse gases have a wide range of environmental and health effects. A major effect is that it has impacted and led to climate change by trapping heat and also contributing to respiratory disease from smog and air pollution.

Current trends in greenhouse emissions

In 2020 alone, the amount of carbon dioxide increased by 149% when compared to the pre-industrial level. The global economic slowdown caused by Covid19 did not have a real effect on greenhouse gas levels and their growth rates, but new emissions reduce. Considering the long half-life of CO2, the temperature level already observed will continue to exist for several decades even if emissions are reduced to zero. However, as long as emissions continue, global temperature will continue to rise.

Aside from the rising temperatures, other extreme weather conditions such as:

• intense heat and rainfall,
• ice melt,
• sea-level rise, and
• ocean acidification,

will be followed by far-reaching socioeconomic impacts.

Greenhouse Gas Emissions & The Shipping Industry

The shipping industry is one of the largest sources of these greenhouse gases. Reports show that maritime transport alone accounts for about 3% of world greenhouse gas emissions.

Some of the effects caused by the activities of the shipping industry include:

• losses of coastal land to sea-level rise
• cyclones with high intensity
• longer periods of droughts
• significant losses of biodiversity.

According to the third International Maritime Organization (IMO) Greenhouse Gas study,  emissions from the shipping industry under “usual business conditions” are estimated to increase to between 50% and 250% by the end of 2050. With all these being said, how committed is the industry to the reduction in greenhouse gas? Can anything even be done? According to Kitack Lim, who is the secretary-general of the International Maritime Organization, the industry is committed to making sure there is a reduction in greenhouse gases.

He outlined the latest mandatory energy efficiency measures for ships, some of which include:

• the use of ship carbon intensity indicator rating system,
• alternative fuels, and
• the application of new technologies.

Carbon Levy impact on supply chain

In view of the danger that increased gas emissions pose globally, many  Governments around the world are under a lot of pressure to pass laws and strategies to checkmate the amount of greenhouse gas emissions. Some of the developed environmental strategies include the Kyoto Protocol, the European Union Emission Trading System, and others. Some of these strategies have a direct impact on the supply chain and other close factors.

For example:

The Carbon Cap Policy

This policy imposes strict constraints on the amount of carbon emissions generated in supply chain operations.

The Cap-and-Trade Policy

This policy is dependent on the carbon market price and cap allocation. It, however, might not succeed in limiting carbon emissions because a hard cap on emissions would lead to increases in the cost of energy which will lead to increasing costs throughout the economy.

The Carbon Tax Policy

The carbon tax policy is more flexible but has huge financial stress on the companies to reach certain emission targets compared to the other two policies.

How large cargo companies are making changes to reduce CO2?

In 2018, in response to the environmental concerns, the International Maritime Organisation (IMO) adopted mandatory measures under an umbrella of policies to reduce greenhouse gas emissions produced by international shipping. There are a few of them:

• The IMO’s pollution prevention treaty (MARPOL);
• The energy efficiency design index (EEDI), which is mandatory for new ships; and
• The ship energy efficiency management plan (SEEMP).

Many of these mandated changes go into effect by 2030, less than 10 years from now.

There is also some notable change happening now like sailing vessels getting put on the water by:

• Startup companies, like fair transport, with its retrofit wooden vessels;
• Sized proof of concept companies like the schooner Apollonia;
• Firms with newly built ocean-crossing sailing ships like grain de sail;
• Large cargo ship companies launching innovative retrofits and purpose-built vessels like Neoline’s new large cargo vessels.

Scalable ways to reduce Greenhouse emission

There are several ways that shipping companies can begin to reduce their carbon footprint. Let’s look at the top three ways that the shipping industry can do this and how cargo ships are on a path to becoming more eco-friendly than they are today.

Switch to An Alternative Cleaner Sources of Fuel

One of the obvious ways to reduce shipping emissions is to use fuels that produce fewer greenhouse gasses and pollutants. Before now, almost every cargo ship relied on low-cost, low-grade “heavy fuel oil” – known as “bunker fuel” – which is much higher in sulfur content than diesel. Not only do cargo ships require phenomenal amounts of this fuel – but it’s also much worse for the environment. At the start of 2020, the International Maritime Organization enacted strict new rules for bunker fuel that brought the maximum allowable sulfur content down from 3.5% to 0.5%. The move will reduce sulfur emissions by 77% – that’s equal to 8.5 million tonnes per year.

Transition to Green Hydrogen

Today’s hydrogen is almost exclusively produced through fossil-fuel processes, a process that releases carbon straight into the atmosphere. But, the future lies in green hydrogen – an inexhaustible energy carrier produced using renewable electricity and an electrolyzer that splits water into oxygen and hydrogen. The advantage of this process is that “there are no emissions from this process.” Produced through electrolysis, the hydrogen can be stored, transported, and processed for a growing range of applications. Green hydrogen is clean, green, and everywhere. Switching to hydrogen also requires shipping companies to replace existing engines with electric motors and hydrogen fuel cells, which, while entirely possible, requires significant capital investment. But the long terms benefits of doing so are enormous.

Adopting Slow Steaming

Slow steaming is the practice where the (operational) speed of a ship is reduced. This means that the ship’s engine is not used at full power, thus saving fuel, reducing CO2 and greenhouse emissions. Slow steaming a ship by 10% will lead to a 27% reduction of the ship’s emissions. However, if all ships were to slow-steam, the available capacity on the market would be reduced (more ships will be needed to carry out the same transport work). But, if the additional emissions of building and operating these new ships were considered, then slow steaming the fleets by 10% would lead to overall CO2 savings of 19%.

Conclusion

Reducing Greenhouse gas emissions is critical and each one has a part to play and that includes you. If you don’t have any methods in place to reduce greenhouse emissions, the next best time to start is now.