The shipping sector is required to reduce fuel sulphur content to 0.1% in Emission Control Areas by 2015 and to 0.5% globally by 2020. Although this is demanding, a greater challenge for all sectors is climate change. However, the three options to comply with sulphur regulation do little to address this challenge.
With a deep-seated change to the type of fuel burnt in marine engines, this should be seen as an opportunity to explore co-benefits of sulphur and carbon reduction - instead of taking a short-sighted approach to the problem.
It is argued that the upcoming sulphur regulations should be postponed and instead, a co-ordinated suite of regulations should be implemented that tackles cumulative CO2 emissions and localised SOx emissions in chorus. This would ensure that less developed, yet more radical, step-change forms of propulsion such as wind, battery and biofuels are introduced from the outset - reducing the risks of infrastructure lock-in and preventing the lock-out of technologies that can meaningfully reduce absolute emissions from the sector.
Highlights
- Shipping sector is taking a short-sighted approach to address sulphur emissions.
- It should consider postponing current sulphur regulations.
- Instead a coordinated suite of policies should tackle CO2 and SOx emissions in tandem.
- Ensuring more radical, step-change forms of propulsion are initiated from the outset.
- Reducing risk of lock-in and preventing lock-out of future lower carbon technologies.
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Introduction
In April this year (2013) a conference exploring 'Fuelling the future' was organised by Shipping Emissions Abatement and Trading (SEAaT) at Norton Rose LLP, London. It focused on the regulation surrounding Emission Control Areas (ECAs), in particular the enforceable limits in North West European Waters. Currently, marine fuel oil has high sulphur content and when released via the ships exhaust as sulphur oxides (SOx) it increases the acidification potential of the surrounding atmosphere. The rationale for the ECAs is therefore to limit marine fuel sulphur content in such areas and in turn, minimise the release of SOx.
The International Maritime Organization's (IMO) Marpol Annex VI stipulates that from 1st January 2015, the maximum allowable sulphur content of marine fuel combusted in an ECA will be 0.1%. Outside of the ECAs Marpol Annex VI limits global marine fuel sulphur content to 0.5% by 2020. There is also a similar requirement to minimise the release of nitrogen oxides (NOx) and particulate matter (PM). The reduction in fuel sulphur content within an ECA is requiring a step-change in thinking for those affected. The shipping industry will no longer be able to burn high sulphur content heavy fuel oil and will either require an alternative fuel, scrubbing or, as a last resort, the potential shut down of routes in affected areas.
Although sulphur is considered to be a significant barrier for the sector, arguably the bigger challenge facing not just shipping, but the whole of society, is climate change. However, this challenge is often considered a long-term problem, with targets set out to 2050 and temperature rises discussed at a 2100 timeframe. This should not be the case; temperatures in 2100 correlate with cumulative emissions over the century and hence failing to implement mitigation measures in the short-term makes the challenge harder if not impossible in the long-term.
From a shipping perspective, colleagues at the Tyndall Centre and Sustainable Consumption Institute explored the mitigation required by the industry to reduce emissions in line with international climate change obligations. Despite the urgency for rapid decarbonisation, the sector, particularly through the IMO, has known about the need to globally reduce greenhouse gas emissions since the Kyoto Protocol in 1997. Here, the United Nations Framework Convention on Climate Change tasked the IMO with limiting emissions from marine bunker fuels; however, in over 15 years, little in the way of meaningful progress has come from this.
The only CO2 related policies adopted by the IMO to date is a revised MARPOL ANNEX VI to include the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP). This has been criticised by industry, academics and NGOs alike for being a weak measure that will fail to cut CO2 emissions in absolute terms, at least without complimentary and stringent policy instruments.
Exploring the current options to reduce SOx emissions
1. The current direction of industry
Implementing a fuel switch to reduce SOx emissions could also provide significant opportunity to also reduce CO2 emissions. After all, a fuel switch that provides a reduction in the carbon intensity of the fuel, taken over the full life-cycle, is a key mechanism for mitigation, alongside combustion and wider efficiency improvements. However, the real take home message from the SEAaT event was that there is little attention being paid to the co-benefits of tackling CO2 and SOx emissions in tandem. If CO2 is not part of the considerations, the result of meeting current regulation could make controlling future CO2 emissions much more of a challenge.
2. Do the three main options deliver CO2 emission savings?
The three main options to reduce sulphur emissions are: low sulphur distillates, liquefied natural gas (LNG) and, SOx scrubbers. If the sector, or at least those impacted by the ECA, is to switch to low sulphur distillates then, over the full life-cycle, CO2 emissions will increase largely from a rise in the energy required for additional refining. Whilst a switch to LNG could provide emission savings of 7-15% and, depending on the level of methane slippage assumed, the absolute growth in trade at ∼4% p.a. would mean that any relative emission savings would be undermined within about four to five years. Finally, the use of scrubbers arguably only promotes business as usual for the industry and provides little incentive to move beyond heavy fuel oil altogether. In addition, scrubbers require additional energy to operate, further increasing CO2.
3. Wider challenges with meeting sulphur regulation
Meeting regulations through the use of low sulphur distillates could increase the fuel cost for operators and assumes sufficient fuel is available for use, which, in reality is likely to put strain on refinery capacity and put the sector into direct competition with other end-users. On the other hand, LNG would require the overhaul of infrastructure to support a gas network. In addition, the fuel is likely to only benefit new builds due to the modification required in the main engine (although dual fuel retrofits are being discussed) and subsequently, the capital expenditure for new LNG fuelled ships could increase by 25-30%. When meeting regulation through scrubbing, the technology will not be applicable for older and/or smaller vessels and therefore excludes a lot of the vessels currently operating in ECAs.
To recap:
- The most pressing challenge facing the sector is that it needs to reduce sulphur content to 0.1% in Emission Control Areas by 2015 and to 0.5% globally by 2020.
- But a greater, globally encompassing, challenge for all sectors is climate change.
- The sector will have to significantly improve existing measures to cut its share of global CO2 emissions.
- The three main options to comply with sulphur regulation are low sulphur distillates, LNG and SOx scrubbers.
- These do little to address CO2 and serve to increase it or limit the potential measures to curb CO2 emissions in the long-term.
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The opportunity for co-benefits
1. Minimise lock-in, maximise low carbon deployment
With such unprecedented change to the conventional means of marine fuel combustion, is this not an opportunity to address the challenges of sulphur and CO2 together? Links between SOx and CO2 emissions mean the sector runs the risk of taking a very short-sighted approach if chooses to tackle SOxemissions without thought for the carbon repercussions. Addressing the co-benefits would reduce the chances of infrastructure and marine engine lock-in, as well as reducing potential lock-out of future low carbon fuels. Failing this and continuing to pursue only sulphur regulation, means the sector is likely to have to again make changes to its fleet and fuel infrastructure in the coming decades. The argument of lock-in is not just made in the shipping industry, but it is also an argument that is frequently made in the energy sector when it considers low carbon pathways.
Whilst it is clear that one alternative fuel or technology measure will not be applicable for the entire fleet, there are a range of technologies that lend themselves to certain types of vessels and markets. With the help of industrial stakeholder input, our research is currently exploring technology roadmaps for a range of shipping vessels. For example, whereas small vessels operating in coastal waters could achieve large-scale decarbonisation through the use of energy storage and fuel cells, tankers operating on the high seas have potential to exploit wind (Flettner rotors and kites), given their greater flexibility with regards to available deck space. In exploring the potential benefits and challenges of any new developments or retrofit options, the vessels should, as a minimum, seek to satisfy the sulphur regulation in the short-term but ensure that such measures do not limit the potential for low carbon technologies in the longer-term. As an example, to ensure that LNG infrastructure is capable of storing either biogas or hydrogen in the future.
2. Rethink the purpose of ECAs and carbon-reduction policies
A more controversial suggestion to this challenge could be to delay the implementation of ECAs, so that the sector can develop and introduce lower carbon propulsion from the outset - so as to deliver these co-benefits. Arguably, the move towards low sulphur propulsion is missing the opportunity to tackle the wider systemic issue of climate change. This option would be premised on the implementation of a meaningful global CO2 reduction strategy in the coming years to incentivise low-carbon technology development. Such a suggestion could help the sector to
A more controversial suggestion to this challenge could be to delay the implementation of ECAs, so that the sector can develop and introduce lower carbon propulsion from the outset - so as to deliver these co-benefits. Arguably, the move towards low sulphur propulsion is missing the opportunity to tackle the wider systemic issue of climate change. This option would be premised on the implementation of a meaningful global CO2 reduction strategy in the coming years to incentivise low-carbon technology development. Such a suggestion could help the sector to
- move away from technology measures that only provide incremental CO2 savings,
- develop and implement more radical, step change technologies such as wind power, battery, fuel cells and biogas from the outset
- reap the co-benefits of addressing cumulative CO2 emissions and the localised impacts of SOx and NOx.
Let us not forget that many of these lower carbon forms of propulsion are seen as being cost-effective by industry themselves and there are already pioneers in the industry exploiting such measures like B9 Shipping, Sky Sails and Enercon. Of course, developing a meaningful global CO2 strategy in the interim is very challenging and from following discussions at the IMO's Marine Environment Protection Committee (MEPC) to date, it could take considerable time to reach agreement. Furthermore, the agreement could lead to unintended consequences such as loss of economic competitiveness and trans-modal shift. However, referring back to discussion at the SEAaT event, such challenges are just as apparent when addressing the sulphur regulations and the sector is moving forward with these.
To summarise
Whilst the stricter sulphur regulations in ECAs are impending, the widespread agreement amongst the scientific community is that climate change is here and the regulations surrounding a reduction in CO2 emissions are only going to tighten. In response to this, rather than taking a short-sighted approach, the shipping industry should consider the choices that it makes in the coming years with regard to dealing with sulphur emissions. The sector should be open to the idea that addressing CO2 and SOx emissions simultaneously is an opportunity to embrace the wider issues - to take a systems view of the role of shipping in addressing not just local pollutants, but climate change too. This in turn could secure a more sustainable future for the industry, rather than one that increases its costs by only meeting one regulation at a time.
By Paul Gilbert, Tyndall Centre for Climate Change Research, School of Mechanical, Aerospace and Civil Engineering, University of Manchester
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