Can the shipping industry clean up its act?

Sensemaking / Can the shipping industry clean up its act?

Long considered one of the world's 'invisible industries', shipping is now looking towards a cleaner future

By Futures Centre / 20 Jan 2011

Close your eyes for a moment and imagine some of the green transport success stories that lie around the corner. What comes to mind? A vast graceful airship? A solar-powered car? Some clever piece of videocon kit?

What you probably didn't picture was a cargo ship the length of three football pitches, powered by liquid natural gas, currently being designed by Korean ship builder DSME as part of its Econology programme. Or a huge container vessel, self-loading, smooth-sailing and powered by liquid natural gas, that's been dreamt up by the Japanese shipping line NYK.

"One in every 30 tonnes of CO2 generated by human activity today comes from a ship"

But these are just the kind of innovations that will be needed if shipping is to face up to its impact on the world's climate. To be fair, ships are, relatively speaking, climate-friendly. Over the last 40 years, technological advances and economies of scale have cut fuel consumption dramatically – particularly when compared with other modes. Today's articulated lorry pumps out about 50g of CO2 per kilometre for each tonne of goods carried. Aeroplanes account for at least ten times as much. By comparison, a largish freighter may emit just 15g per tonne-kilometre (tkm); an oil tanker a mere five.

Still, all those grams add up. Nearly 80% of global trade by volume is transported by sea, with some 53,000 vessels clocking up over 50 trillion tkm a year. So immense is this weight of traffic that the industry's emissions now total over a billion tonnes a year. That gives it a carbon footprint larger than Germany's – and substantially larger than that of the aviation industry. One in every 30 tonnes of CO2 generated by human activity today comes from a ship. And the industry's relentless growth looks set to continue as long as the global population keeps increasing and living standards around the world go on rising. By 2040, all other things being equal, the carbon footprint of shipping could easily double. Of course, all other things can't remain equal.

One way or another, by 2040 we have to cut our emissions drastically, perhaps to below 9 billion tonnes a year in total, if we are to have a chance of avoiding that critical 2°C rise in global temperature. Inevitably, shipping, for so long an 'invisible industry' operating far beyond most people's horizons, is now coming under intense scrutiny. Already, stringent new regulations to reduce onshore air pollution will require operators to cut their emissions of nitrogen oxides and sulphur dioxide (though, ironically, the latter has a short-term global cooling effect). It is only a matter of time before they are obliged to slash their carbon emissions as well.

So, realistically, what is achievable? Some headline-grabbing claims have been made. NYK says its 'super eco' container ship could be sailing in 2030, achieving savings of around 69%. More optimistic still is the Scandinavian company Wallenius Wilhelmsen. Its 'Orcelle' concept ship presents the tantalising vision of a vast freighter taking to the seas by 2025, emitting just water vapour and hot air. Sceptics doubt the technology – a combination of fuel cells supplemented by the energy of the sun, wind and waves – will prove viable. As one put it: "This ship won't work. But you've got to admire their ambition."

And it's an ambition that is beginning to spread. Back in January 2010, Samsung Heavy Industries, the world's second-largest shipbuilder, promised that from 2015 all its new builds will emit "up to 30% less" greenhouse gases than today's equivalents. DSME's Econology is aiming for 50% CO2 reductions by 2020, and Mitsubishi has unveiled plans for a large container ship which will achieve 35% reductions.

NYK concept shipSleeker with sails: NYK's concept ship starts to take shape

Even so, it's easy to get carried away by some of the numbers that appear in the media, mistaking optimum figures for day-in day-out averages and adding everything up to make 105. It can take a decade to get a new ship off the drawing board and down the slipway, and that vessel may then be in service for as long as 35 years. That means that many of the ships that will be sailing even in 2040 have already been built. And they will incorporate the technology – and the attitudes to the environment – of five to ten years ago. In this respect, shipping has a lot in common with houses, planes and power stations.

There is no single, revolutionary new idea that is going to turn the shipping industry green. Instead, insiders are looking to a mix of technical tweaks and 'smarter steaming' to accumulate enough modest savings to add up to something really substantial.

That's the strategy of the huge Danish shipping line Maersk, which aims to halve its carbon emissions per tkm over the next 30 years. It plans to cut 25% by 2020, mostly by retrofitting its current fleet (for example, refining the shape of ships' bows and installing better propellers and a waste-heat recovery system) and by using it more efficiently. The balance will be achieved by 2040 through buying higher-performance vessels.

One key innovation the company has pioneered is 'slow steaming'. At lower speeds, a vehicle encounters less resistance and therefore moves with less effort. Maersk reports that since 2007 this alone has cut its fuel consumption per container by 12.5%, and even bigger reductions are around the corner. Slow steaming saves money, saves carbon, and also gives clients a more reliable date of arrival. "It looks as if this will become the norm," says Jacob Sterling, the company's Head of Climate and Environment, "because it is such good business. Once customers get used to it, there will be very little incentive for shipping lines to revert to faster speeds."

Some experts argue there's scope for greater ambition. Del Redvers, Head of Sustainability at the engineering consultancy BMT, believes that if current solutions, both operational and technical, were applied rigorously across the whole industry, "a reduction in carbon emissions of 20% or more is already feasible, and should be on the table now." Lloyd's Register puts it higher, at 30% plus. "The target", says Redvers, "has to be 'realistic plus a little bit more' – at least another 5% every year, in the expectation that we'll be able to develop the technology."

Cost-cutting will be a major driver of change, he believes. A saving of even 0.5% is an appealing proposition to a company whose fuel bills run into millions of dollars a month. The price of fuel already looks certain to rise thanks to new regulations on sulphur emissions. "There are very few other industries that can make 20-30% cuts in carbon emissions and actually save money," observes Dr Simon Walmsley, Head of the Marine Programme at WWF-UK.

Pressure from carbon-conscious shippers, such as Walmart, Ikea, Tesco and Volkswagen will also help. And that pressure is mounting fast, says Sam Kimmins, co-ordinator of Forum for the Future's Sustainable Shipping Initiative: "They are increasingly asking the shipping industry to declare what it is producing in terms of carbon. It's the big branded retailers, and some of the big bulk importers", who are making things happen, he says. "They are starting to own their share of responsibility for the impact of getting their products and raw materials into their factories and onto their shelves. It's a question society is increasingly asking of them, and they're passing it onto the shipping industry. So the industry's starting to feel the heat."

"This is something quite new," says Jacob Sterling, "and it's very good news. Many of our clients have been working on sustainability issues for years, and now they are beginning to look at their suppliers. If we don't respond to their demands, we risk losing their custom." In fact, Maersk sees this development as an opportunity for substantial competitive advantage. "For us", says Sterling, "the best option is to try to be ahead of the curve. Month by month, we tell our customers what our CO2 emissions are, and how they compare with the industry average. Some of our customers may not yet know that this is an issue for them – but once they know they can get [carbon savings] from us, they go to their other suppliers and demand it from them as well."

More information is essential. Alisdair Pettigrew is a shipping specialist working with the Carbon War Room (which researches market-based solutions to climate change). "At the moment", he says, "there is nothing out there on the fuel efficiency of individual ships so that a charterer could say: 'I need to charter eight vessels but I only want ones rated A, B or C – and I'd like to reap the benefit of their low fuel consumption.' Likewise, port authorities who have their own air quality and carbon targets to meet might want to introduce incentives for 'cleaner' ships using their facilities, and disincentives for 'dirtier' ones. Ship brokers and insurers, too, might want to factor the fuel efficiency of a vessel into the prices they quote."

All of which would require environmental performance data to be freely available for each and every ship on the ocean. Which is exactly what The Carbon War Room is planning. It's working with other organisations to develop a free-access website that will benchmark and index the world's sea-going vessels individually.

"Ship owners don't foot their vessel's fuel bills - and so have little interest in paying the upfront costs of making their fleets more efficient"

Technological breakthroughs could take that a stage further, says Kimmins. "There are technologies around now which allow any individual ship to be tracked precisely across the oceans: where it's been, how fast it's been going, what fuel it's been consuming, what route it's taken, etc. Like a tachograph in a truck. That can create an enormous shift in how a ship is being run, because ports can say who can and can't use their facilities. If ports are provided with the right information, and with the right co-ordination between them, they could act as major enforcers and enablers of sustainable shipping."

In this respect, shipping is very different to aviation, says Kimmins. "Airports don't want to impose too many restrictions because they fear they'll lose the trade. Ports are different, because there aren't that many that can take today's huge ships. So that gives them some hefty leverage. If the big four European ports got together (Rotterdam, Antwerp, Hamburg and Marseille), they could make some huge changes."

Then there is the industry's notorious 'split incentive' problem: the fact that, in general, ship owners don't foot their vessel's fuel bills – and so have little interest in paying the (sometimes prohibitive) upfront costs of making their fleets more efficient. The Carbon War Room is talking to banks and investors to try to devise new models of finance. These might, for example, persuade someone outside the industry to stump up most of the $3 million cost of an air lubrication system – in return for a share of the considerable sums of money it would save in the long haul.

Market forces alone are not going to be enough, however. Regulation, too, says Del Redvers, is crucial, "at a level that will make people's eyes water". The industry is notoriously conservative, if not a little complacent. Many ships do not even have a fuel gauge. Shipping companies are often loath to look further than the nearest bottom line, and some regard the environment merely as a nuisance. There is a lack of co-ordination, transparency and accountability – and some shipping operators simply lack scruples.

Monitoring behaviour out on the far high seas isn't exactly easy, either. The proper authority to impose new standards worldwide is the International Maritime Organisation, and in the past it has shown itself capable of doing so, on SOx and NOx, ballast water and the recycling of ships. But it can only operate by consensus, and reaching this may take years and years. It can make the EU look positively speedy by comparison. Indeed, observers are certain that, if the IMO does not act by April 2011, Europe will impose standards of its own on all the shipping that uses its ports.

There is clearly a pressing need for either some kind of cap-and-trade scheme or a carbon levy on fuel. Simon Walmsley argues that some of the huge sums of money this would potentially raise should be ploughed into publicly-funded R&D, to accelerate technical innovation and make it available right across the industry. The rest, he suggests, should go into a climate change mitigation fund for the developing world.

"The sea elephant in the room is the relentless increase of traffic by sea"

The sea elephant in the room, of course, is the relentless increase of traffic by sea. This is in part a result of the marginal cost of shipping anything from iron ore to plastic toys halfway round the world. Even the visionary concept ship Orcelle was designed to carry cars from Britain to Australia… But extrapolating existing trends is a dangerous game. The coming decades might well see the growth curve start to flatten out. Trade may become more localised again due to factors both positive and negative – rising living standards in China and elsewhere, more extreme weather, piracy and resource wars. By 2040, one must hope, the amount of oil and coal being carried across our oceans will have dwindled (though there may well by then be a huge regional trade in fresh water). And if shipping lines pass on to their customers the extra costs they incur both in emitting CO2 and avoiding emissions, that too may help to curb the expansion of seaborne traffic, nudging it within the limits of sustainability.

Whatever transpires, shipping is likely still to be part of the problem, but also a big part of the solution. What's most needed now, says Simon Walmsley, is a paradigm shift in how the industry operates. "We need a big operator to say: 'We have to make this whole business more efficient – cargoes, ships, ports – and then we can save money and the environment.'"

Are there reasons to be hopeful? Yes, reckons Del Redvers. "Shipping companies want to reduce their carbon emissions. There are technologies that can help them to do it and the political will to make it happen. All that is needed is an understanding of what is really possible – and a process that gets us there."

Huw Spanner writes for The Independent.

Sea change...

Just over the horizon...

The next decade could see major innovations in both operation and design.

The industry is sure to become more highly automated, with computers processing detailed information about weather conditions and currents to work out routes and speeds that will minimise fuel consumption. The widening of the Panama Canal will allow even larger vessels through from 2014 – and if rising temperatures do indeed eliminate the ice in the Arctic Circle, the (small) consolation is that many shipping routes will become much shorter.

On the technological side, ships designed to be fuel efficient in operation, rather than cheap to build, will be lighter, both hydro- and aero-dynamic, and needing to carry less ballast. Air lubrication holds out some promise – injecting a stream of microbubbles under the hull or trapping pockets of air beneath it can reduce frictional drag, delivering savings of as much as 20% with very slow-moving, flattish-bottomed vessels such as tankers.

Patterning a hull with 'riblets' that mimic the rough surface of a shark's skin is, somewhat counter-intuitively, another way to smooth its passage through the water. And (like various new paints and coatings) it also deters algae, barnacles and slime.

By 2020, new ships could be burning LNG or biodiesel made from algae, or even be powered by hydrogen fuel cells. Modular engines will be designed to be easily replaced or upgraded as better technology is developed. Huge computer-controlled 'towing kites' (which, flying much higher than mast-mounted sails, can catch stronger and steadier winds) can already be retrofitted to many ships, and hold out the prospect of cutting average fuel consumption in tankers and bulk carriers by 15% or more. Lighting, heating and other 'hotel services' can be powered by solar panels or, when in port, the onshore grid.

Savvy ship owners will act sooner rather than later to upgrade their vessels, says Kimmins. "As new legislation comes onstream, forcing ship owners to act, there will be a rush to the retrofitter. So while we're in a downturn, with ships laid up in harbour, this could be the perfect time to act."

Follow the Sustainable Shipping Initiative on Twitter @sustshipping

Image credits: Nadav Kander / Prix Pictet; NYK Line; SkySails

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