Op-Ed: De-risking the shipping decarbonization debate

Giulio Tirelli, Director-Business Development at Wärtsilä. (Credit: Wartsila)

By Giulio Tirelli, Director-Business Development at Wärtsilä

The challenge to decarbonize shipping is unprecedented, both in scope and urgency. At COP26 last year, shipping faced more scrutiny than ever before in climate change talks. The prominence of these discussions, coupled with the ongoing Covid-19 pandemic and regulatory pressure, has led to the slow but inevitable shift in mindset from consumers—who are now more interested in environmental, social and corporate governance.

Here you have the building blocks for transformational change in an industry responsible for around 90% of global trade. This wider social and regulatory context presents an opportunity for decarbonization actors to lead the green transition in shipping.

So what can this global industry do to navigate its way to net-zero faster, while staying competitive? 

The good news is that we have started to see real progress in terms of raising ambitions. We’ve seen key players, alongside Wärtsilä, sign the Call to Action for Shipping Decarbonization initiative, which aims for net-zero emissions by 2050.

While the momentum is building, we can all recognize that there will not be one ‘silver bullet’ solution to reach shipping’s Greenhouse Gas (GHG) emissions targets. Add to this the complexity of the future fuels pathways and the difference in fleet compositions, and it’s clear that owners, charterers, and operators will each have different strategies and requirements.

We believe the right way to approach marine decarbonization on a larger scale is to de-risk the green transition step by step, which can be done by reducing baseload emissions starting in the immediate term—focusing on propulsion enhancing technologies or electrification technologies. While sustainable fuels will continue to scale at a fast rate, this will still not be fast enough to replace fossil fuels for most fleets, and will remain quite expensive in today’s climate. These fuels represent only a part of the equation; they inherently bring a high level of complexity, given by the related fuels’ supply chain and the regulatory frameworks and market acceptance which need to develop around them.

Now that the energy transition is underway, investing in an engine now that unlocks a wider range of fuel options and possibilities for the future is a good insurance premium indeed. LNG, for example, is opening the door for drop-in zero carbon fuels, and is easy to convert to hydrogen, methanol or ammonia in the future.

However, selection of fuel is not the only choice that owners can make—and they will need to think beyond fuels alone. Adopting alternative fuels is currently, and will remain, quite expensive—and this is a highly impactful and equally demanding move from ship owners. Hence the need to reduce baseline emissions. Many different studies project a range of expected cost differences for the various future fuel options. Alternative fuels could result in higher fuel costs, at least as long as the related supply chain is not fully developed.

Therefore, the right place to start for existing ships is for owners and operators to de-risk the energy transition by reducing baseload emissions now. If you think about decarbonization as a staircase with several discrete steps to take up towards full decarbonization, it becomes clear there are many intermediate steps that can be taken to reduce fuel consumption and therefore emissions.

Intermediate steps, either for retrofit or newbuild projects, range from focusing on propulsion enhancing technologies or electrification technologies—this includes hybridization, shore connections, shaft generators, wind-assist, air lubrication, or a range of other options. In addition, Energy Efficiency Technologies reduce fuel consumption which would have a beneficial impact when thinking about the potential fuel costs increase related to moving to alternative fuels. Each of these steps, which can be taken right now, could be important in terms of being able to remain competitive in the future fuels era.

The entire maritime industry should remember that it’s possible to start making progress today if we make de-risking decarbonization a strategic priority. The next step will require each operator to review their fleet composition, and to continue climbing the steps to reach full decarbonization.