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The shipping revolution is here

Reducing emissions from shipping

Lars Carlsson, Director of Windship Technology, looks forward to a revolution that promises to be every bit as dramatic as the switch from sail to steam

Ships made the Industrial Revolution possible, with cheap and efficient transport of goods, from mines to mills and from producer to consumer. And shipping was once, and could again become, by far the most economical and environmentally friendly mode of transport. But it is also true that the Paris Agreement to reduce harmful emissions by about 70 per cent has been signed by almost 200 states and numerous industrial giants – but not by the shipping industry, which produces a significantly high percentage of the world’s atmospheric pollution.

New marine legislation changes everything

Laid-up vessels at anchor off Skagen, Denmark, 2017

Unprofitable, environmentally unfriendly excess shipping capacity: laid-up vessels at anchor off Skagen, Denmark, 2017. Photo: Louis Mackay

The International Maritime Organization (IMO) is responsible for the global regulation of the shipping industry. It has now, with assistance from the European Commission and support from shipping organisations, presented draft legislation to reduce the maximum sulphur content in bunker fuel from 3.5 to 0.5 per cent.

This is a very important piece of shipping legislation, because sulphur in the atmosphere is causing premature deaths through respiratory illnesses estimated at over 70,000 a year in Europe alone, as well as being highly toxic to the environment as a whole. The new legislation will also eliminate other harmful substances emitted by ships’ engines, including greenhouse gases (GHG) and particulates.

A much-quoted statistic is that the 15 largest container ships emit more harmful sulphur and nitrogen substances and particulate matter than all the cars in the world. Another way of expressing it is that the shipping industry emits as much GHG as the whole of Germany – but, unlike Germany’s, ship emissions are expected to increase in the coming years as transport responds to a rise in global economic activity.

The new IMO legislation is expected to be ratified by the middle of 2018, to come into force on 1 January 2020. It will effectively put a stop to this heavily criticised and harmful pollution, reducing GHG emissions from ships by the global reduction target of 70 per cent. In the interim, the IMO and the European Commission will be benchmarking the present fuel consumption of ships and consequently their emissions.

What will be the effect of the new legislation?

To achieve the sulphur reduction, many ships will have to abandon heavy fuel oil and switch to clean marine gas oil (MGO). But this is like legislating that the food industry can use only the best parts of the slaughtered animal for food products: a quality improvement, but also a cost increase. It is estimated that 2 million barrels of fuel per day will have to be MGO instead of the residual oil extracted at the end of the refinery process. The bunker cost will increase dramatically. We may see 3–5 times higher fuel prices by 2020, and the only way to mitigate this cost increase will be to reduce consumption.

Shipping must also reduce its GHG emissions to be on par with all the efforts by the rest of the world, and it is much better for the shipping industry to act on its own initiative. If it fails to recognise the way the wind is blowing, the legislators could impose a regime far more onerous than if it selected the best methods itself.

The key components of an emission reduction scheme could include:

  • permanent economical speed, with fuel consumption reduced – 30% saving
  • optimise the hull, rudder and propeller design for slow-speed operation – 10% saving
  • modern antifouling systems to prevent barnacle growth – 5% saving
  • modernise ship operation in cooperation with the charterers to avoid waiting for a berth, and instead slow steam for just-in time arrival – 5% saving

The power of the wind

Sir Ben Ainslie and his crew fly their Land Rover catamaran on hydrofoils at the 2016 Louis Vuitton America’s Cup races in Portsmouth

A reminder that wind-powered vessels can move faster than the wind itself. Sir Ben Ainslie and his crew fly their Land Rover catamaran on hydrofoils at the 2016 Louis Vuitton America’s Cup races in Portsmouth. Photo: Land Rover

It is often said that necessity is the mother of invention, and in the longer term this fundamental step change will force the shipping industry to look to new technologies and explore alternative ship propulsion and fuel systems such as hydrogen and solar power. This is all in the future and unproven, but there is nothing new about wind power – for it was the wind that drove ships for centuries, until the age of steam rendered it uneconomical in the latter part of the nineteenth century.

Today, wind is set to make a comeback. One only has to look at the technology that has been developed by the yachting industry, where unheard-of speeds are being achieved by multi-hulled catamarans in the lightest winds. The America’s Cup yachts can sail twice as fast as the wind: in September 2013, a speed of 47.57 knots was achieved in 21.8 knots of wind. Wind power is the cleanest and most sustainable propulsion power, and above all it comes without cost.

There are opportunities here. A British company, Windship Technology Ltd, has developed and patented an auxiliary propulsion system called the Wind Assisted Sail Propulsion System (WASPS). It is estimated that it can save up to 30 per cent of fuel consumption, and it has been validated by Lloyd’s Register and the Wolfson Unit at Southampton University. No other wind propulsion system is believed to achieve such performance, and the system could be retrofitted to certain types of large bulk carriers using specific trade routes.

All in all, fuel consumption, and thereby emissions, can be reduced by about 70–80 per cent, compared with the previous generation of ships delivered in the boom years earlier this century. The shipping revolution Traditionally the shipping industry is conservative and resists costly changes.

The same can be said of the shipbuilding industry, which is reluctant to embrace development in radical new ship designs with all the associated costs. However, we are now entering a Shipping Revolution period, where shipyards and shipping companies, and also charterers, will have to adapt to the modern, efficient ship designs – or cease to exist.

Construction of the ultra-low-emission ships, based on 70–80 per cent lower fuel consumption, will begin before 2020. In the coming years, even modern ships built during the last ten years with a fuel consumption of about 30 tonnes per sea-voyage day will become uncompetitive. At $1500 per tonne of MGO, the fuel cost will increase by $30,000 per day at present prices. An ultra-lowemission ship will save 70 per cent of this, or $21,000 per day, which represents an annual saving of around $6.3 million. Naturally, such cost savings will only be possible in the new generation ships.

The owners of ultra-low-emission ships may wish to improve their charterer relationships by sharing the savings through a long-term charter, which will make the financing easy and take away the speculative risk in shipping. Focusing on the long term, charterer and shipowner may agree that the chartered ship is to operate in a high-quality mode with good guaranteed economy. In this way, they may bring an end to the ‘savings’ approach introduced in the last ten loss-making years and revert to the high-quality shipping standards of traditional European shipowners.

An opportunity for the Red Ensign

Ultra-low-emission ships will be attractive for all parties involved. Not only charterers but underwriters will appreciate the lower costs and the higher quality of ship, crew and maintenance. Northern European officers and ship managers, who were laid off in the cost reduction frenzy, would again be competitive in a quality operation. We also expect that those taking up maritime careers as cadets will be more environmentally conscious, wishing to work on board sustainable ships, wanting to make a difference to the environment and helping to reduce global warming. In slow-speed operation, a ship could become a floating university, with qualified seafarers becoming more qualified while sailing around the world. Their studies could cover ways of achieving constant innovation and performance improvements in shipping.

While costs have been rising in Asia, low cost ship management in new shipping countries has increased. British costs are now competitive with those in Japan, Korea or Singapore.

Creating a large publicly quoted shipping company in the UK, providing employment based in northern Europe for managers and officers and relying on long-term chartering, would provide some strong advantages. The fleet would be solely high-quality ultra-low emission ships, and the cost structure would be much lower than for conventional tonnage and operation.

The time to act is now!

For more information about Windship, see www.windshiptechnology.com.