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As Shipping is Consumed with Imminent New Fuel Regulations, Many Uncomfortable Questions Remain

Our blog is pleased to welcome well-educated insights of industry experts. We are thrilled to host as inaugural opinion guest Mr Greg Atkinson, Chief Technology Officer at Eco Marine Power, B.Sc., MBA., FRINA., FIMarEST.

Last month, I was invited by the Credit Suisse Research Institute (CSRI), to participate in meetings related to the energy transition - a term that encompasses the shift away from fossil fuels and towards a reduction in greenhouse gas (GHG) emissions. For my part, I made a presentation during which I touched upon some of the challenges shipping faces during this transition and briefly discussed a few solutions we have been working on at Eco Marine Power. Perhaps more importantly though, I was able to gain a better understanding of the global trends in regards to energy transition, and how shipping is viewed by those outside the industry in terms of the measures being taken to lessen its impact on the environment.

During my presentation, I also suggested that shipping needed to deal with some uncomfortable questions. That is to say, the discussion needed to move beyond contemplating short-term alternative propulsion technologies, lower carbon fuels and the reduction of emissions, to a deeper reflection about the industry itself; and why not, about our very own behavior as citizens and consumers. For example, should we be examining in detail what type of cargoes are transported by the world’s shipping fleet and how much energy is needed to move these cargoes? Should waste be transported by sea to developing nations for disposal, or should greater investment be made in recycling and waste processing so that wealthy nations can manage their own trash? Should live animals for meat consumption be shipped half way around the planet or should the meat be processed in the country of origin? Should spring water from Europe be sent over 10,000 km to Australia so that consumers have a wider range of bottled water to choose from? Yes, I know it gets dry down in the great southern land, but I don’t think bottled spring water is going to drought-proof the parched country of my birth. I am a believer in free markets and trade, but not to the extent that we go out of our way to damage the environment and waste resources.

There are also some uncomfortable questions specifically for the cruise ship sector. In particular, how many floating resorts do we really need and are some of the ships becoming too large? Are cruise ship companies serious about reducing energy consumption, or is greater emphasis placed upon on-board attractions including theme park rides. Bearing that in mind, it’s worth highlighting that: “On average, one cruise ship emits as much black carbon as 4,200 Euro V heavy-duty trucks operating 100,000 km over one year. Further, cruise ships emit the most BC per unit of fuel they burn: the average cruise ship emits 0.34 kg of BC for every tonne of fuel, compared with 0.26 kg/t for a container ship.” Black Carbon Emissions and Fuel Use in Shipping. ICCT. (2015).

Furthermore, how many cruise ships should operate in pristine marine environments and should there be a limit on the types and numbers of vessels that can operate in these regions? I admit that the thought of sailing to Antarctica is appealing, but it’s also an experience I accept can be forfeited so that we allow some places on this planet to remain almost untouched by humans.

Another question to ponder is: are the right types of ships being built? For example, can the expected increase in demand for shipping be met and emissions reductions achieved, if we continue to have large bulkers sailing from Australia or Brazil to China full of iron ore, and then have them make the return journey in ballast? Admittedly it would be challenging to build ships capable of carrying bulk cargoes and containers, but maybe it’s something that needs to be considered. In the past, general cargo ships exist that can carry multiple types of cargo, so perhaps more emphasis could be placed on designing and building ships with this type of capability.

Vessels being built today are generally cost-effective in terms of prevailing business models, but, in the near future, trading considerations are likely to be very different. By some calculations, ships and shipping at the moment might be priced inefficiently as negative externalizes, among other, of high emissions and energy inefficiencies are ignored.

Perhaps there’s more that can be done to streamline the ship building industry though. That doesn’t necessarily mean simply closing down shipyards, but rather further consolidation in terms of ship design so that proven energy efficient ship types can be built at lower cost at several shipyards that share a common global design organization. To assist with this class societies though should standardize their design guidelines and perhaps further merges amongst these organizations is also required.

Another consideration is that ships being built now might in environmental terms, become obsolete in 10 or 20 years. For example could a ship with an open-loop scrubber become a stranded asset due to its environmental impact? Just a month before the mandatory deadline of implementing IMO2020, we still don’t know enough about the impact of scrubber discharge water on the marine environment, and I have written about this topic before in Open-loop scrubbers, science and the Japan report. Already some ports have banned their use and nobody I’ve discussed this topic with outside shipping, thinks they’re a good idea with reactions ranging from disbelief to outrage. Coverage of this topic in the mainstream media also conveys a sense of how they are perceived with articles being entitled: Thousands of ships fitted with ‘cheat devices’ to divert poisonous pollution into sea and Shipping companies 'will dodge UN emissions regulations'.

So how does shipping respond to such concerns? Well, in some cases the thinking appears to be that if companies band together in an alliance or association, that somehow their public relations efforts will be able to win over the doubting public. Shipping needs to deal with greenhouse gas emissions & pollution, so there’s not much point making comparisons to the airline industry for example or looking for reasons to complain about regulations aimed at reducing emissions or pollution. Associations and alliances may appear effective at churning out press releases and gaining media attention, but for those outside shipping, the narratives often being circulated by some of these groups are not only predictable, but also reinforce the view that shipping is unwilling or unable to develop and implement the changes required.

I do however appreciate how frustrating it must be for ship owners to try and manage their businesses over the long term, when they are unsure what new regulations, guidelines or taxes etc. might be implemented in the years ahead by a maze of organizations including port authorities, classification societies and governments.

Certainly new regulations that are proposed by (or via) the International Maritime Organization (IMO), need to be subjected to scrutiny and this is where I believe some reform is required. My concern is that this process could be overly influenced by lobby groups whereas a broader range of views especially from the scientific & engineering fields, would help maintain confidence in this process. Enforcement of regulations also needs the support of nation states, so this requires the utmost confidence in the procedures leading to the adoption of new regulations.

Overall, it became apparent during the CSRI meetings that many of the changes heading towards shipping as part of the energy transition, are going to originate from outside the industry. There were for example discussions dealing with the concept of the circular economy - an economic system that is aimed at encouraging recycling, re-use, sharing, repair, refurbishment, re-manufacturing and the reduction of waste. This circular economy approach could be applied to the shipping sector and it’s also an area where the industry could be viewed as being in a leadership role due to its global influence. A focus on the circular economy for example might affect the design of ships, how they are built, how they are operated and how they are recycled or disposed of. It’s also a concept that is not dissimilar to sustainable shipping, and so there’s work that has already been done and that can be expanded upon.

Certainly the issues discussed in this article would need to be addressed at nation state level, with national and international organizations, and in conjunction with efficiencies of other industries and overall infrastructure. They are complex, multi-faceted and interconnected issues and that dealing with them will be easy. But they are also areas where shipping can get out in front of the debate and be proactive in suggesting possible solutions. In that way, shipping will not only be able to improve its image, but also attract the resources and investment it requires to shift into the emerging low-carbon global economy.

About the Author

Mr Greg Atkinson is the Founder and Chief Technology Officer (CTO) at Eco Marine Power, headquartered in Fukuoka, Japan. Before founding Eco Marine Power, he spent approximately 12 years in the telecommunications industry where he held senior management and technical roles for a number of major multinational companies in Australia and Japan. Prior to his career in the telecommunications sector, Greg spent 10 years in the Royal Australian Navy in the electronics engineering branch. His qualifications include an MBA, a B.Sc (Elec Eng), an Associate Diploma in Electronic Systems and he is currently working towards a Doctorate in Maritime Engineering. He is also a Fellow of the Royal Institution of Naval Architects (FRINA) and a Fellow of the Institute of Marine Engineering, Science and Technology (FIMarEST) in the United Kingdom.


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