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Assessments Of Measures To Reduce Future Co2 Emissions From Shipping

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  • 1. Assessment of measures to reducefuture CO2 emissions from shippingResearch and Innovation, Position Paper 05 - 2010
  • 2. This isDNVDNV is a global provider of services Research and Innovation in DNVfor managing risk. Establishedin 1864, DNV is an independentfoundation with the purpose ofsafeguarding life, property and theenvironment. DNV comprises 300offices in 100 countries with 9,000employees. Our vision is making The objective of strategic researcha global impact for a safe and is to enable long term innovationsustainable future. and business growth through new knowledge and services in support of the overall strategy of DNV. Such research is carried out in selected areas that are believed to be particularly significant for DNV in the future. A Position Paper from DNV Research and Innovation is intended to highlight findings from our research programmes. Contact details: Magnus Strandmyr Eide – magnus.strandmyr.eide@dnv.com Øyvind Endresen – oyvind.endresen@dnv.com
  • 3. SummaryLimiting CO2 emissions is a great challenge being faced by society today.Society, through the United Nations Framework Convention on ClimateChange (UNFCCC), and actors like the EU, is applying pressure on allindustries, including the shipping industry, to reduce CO2 emissions.Thus, rules and regulations that safeguard the interests of society, i.e. thatlimit climate change, are likely to emerge in the years ahead, resulting inthe need for implementation of effective measures. Given the range ofmeasures available for reducing CO2 emissions from ships, there is a needfor a consistent and rational system for decision making and selectionof measures. This applies both to individual ship owners, and also topolicymakers and regulators.In this paper, a comprehensive overview of the available measures ispresented, and the measures are assessed from a cost-effectivenessperspective. A new integrated modelling approach has been used,combining fleet projections with simulated implementation of CO2emission reduction measures towards 2030. The resulting emissiontrajectories show that stabilising fleet emissions at current levels isattainable at moderate costs, in spite of the projected fleet growth upto 2030. However, significant reductions beyond current levels seemdifficult to achieve. If an absolute reduction in shipping emissions isthe target, a significant boost in research, development and testing isneeded to overcome barriers, to accelerate the process of bringing noveltechnologies to the market, and to find those solutions that are yet to beimagined. This study discusses three wild card technologies, all of whichhave the potential to play some part in the future pathway to low carbonshipping.It is important to recognise that the reduction potential, as outlinedabove, cannot be realised without a robust and effective policy instrumentthat ensures that steps are taken to implement the necessary measures ona large scale in the years ahead.
  • 4. IntroductionGlobal temperature increases exceeding 2°C abovepre-industrial levels are likely to result in severe globalconsequences. To avoid such a development, the targetof limiting temperature increases to 2°C was includedin the Copenhagen Accord emerging from the COP15meeting in December 2009, organised by the UnitedNations Framework Convention on Climate Change(UNFCCC). In order to reach this target, it has beenestimated that global greenhouse gas (GHG) emissions in2050 need to be 50-85 % below current levels according tothe Intergovernmental Panel on Climate Change (IPCC,2007). However, all IPCC scenarios indicate significantincreases in GHG emissions up to 2050. This means thatachieving the necessary reductions will be very challenging.Shipping is responsible for approximately 3 % of global Figure 1: Projected CO2 emissions from the future fleet from various studies; Purple – Buhaug et al. 2009 (high-low). Blue – Endresen etCO2 emissions (Buhaug et al., 2009; Endresen et al., 2008; al. 2008 (high – low). Green – Eyring et al. 2005b (high – low). BlackDalsøren et al., 2009), and future scenarios indicates that – This study (Baseline – see section 5 and 6). Note that the respectiveCO2 emissions from ships will more than double by 2050 studies have published point values, and the lines have been fitted for(Buhaug et al., 2009; Endresen et al., 2008, Eyring et al., the purpose of this article. Also, differences in modelling approach between studies and between the assumptions made, means that direct2005b) (Figure 1). Given the expected growth, achieving comparison of the presented studies is difficult and not advisable.emission reductions will be difficult. The global target of2°C will affect maritime transportation, and the extent towhich the maritime sector should be expected to reduce emissions from shipping will be regulated. This, alongemissions and how this reduction might be achieved are with an expectation of high fuel prices in the long run, willthe subjects of an ongoing debate. The International provide incentives for the shipping industry to focus onMaritime Organization (IMO) is currently working to new ways to achieve greater cost- and energy-effectiveness,establish GHG regulations for international shipping and better environmental performance (Figure 2).(IMO, 2009), and is under pressure, from bodies such asthe EU and UNFCCC, to implement regulations that will Over the years, DNV has been actively involved inhave a substantial impact on emissions. The major policy developing the scientific foundation for understandinginstruments under consideration by IMO are technical, emissions from shipping. In collaboration with leadingoperational, and market-based. experts on atmospheric transport and chemistry (University of Oslo and CICERO), DNV has investigated past, present,Although the outcome of the IMO process is currently and future emissions and their impacts. DNV has recentlyunresolved, it seems clear that within a few years CO2 contributed to international assessments on shipping4
  • 5. for costs-effectiveness are identified, and the reasons why such technologies are still needed are described. The results presented build primarily on Eide et al. (2010a), but also on the Pathways studies (DNV, 2009a; 2009b), and Eide et al. (2009b). This position paper is divided into ten sections. Section 1 is comprised of this introduction. Section 2 presents a mapping of available measures for CO2 reduction in shipping towards 2030, while Sections 3 and 4 detail a selection of measures. In Section 5, an approach to rating and prioritising CO2 reduction measures from a cost- effectiveness perspective is provided. Section 6 presents trajectories for future CO2 emissions from ships and evaluates the achievable emission reduction potentialFigure 2: Illustration of some factors that will drive technology at different cost levels. Section 7 discusses limitations todevelopment in shipping. the presented results, and presents a set of “wild card” technologies for further reducing emissions. Section 8emissions including the IMO GHG study (Buhaug et al., provides an overview of policy instruments for enforcing2009), the European Assessment of Transport Impacts reduction in CO2 emissions, through the application ofon Climate Change and Ozone Depletion (ATTICA) the measures discussed. Section 9 discusses the challenges(Eyring et al., 2010), and an OECD study on international of considering CO2 in isolation, and reminds the readertransport (Endresen et al., 2008). DNV has also contributed of the climate effect of other emissions. Finally Section 10significantly to the scientific literature on the topic with concludes, and presents recommendations.several peer-reviewed publications (Endresen et al., 2003;2004; 2005; 2007; Dalsøren et al., 2007; 2009; 2010; Eide etal., 2009a; 2009b; 2010a; Longva et al., 2010). Two studiesconsidering Pathways to low carbon shipping have alsobeen published recently (DNV, 2009a; 2009b).In this paper, an overview of the available measures forCO2 reduction is presented, and these measures areassessed from a cost-effectiveness perspective. Using amodel developed by DNV, CO2 trajectories for differentreduction cost levels are derived. Furthermore, newtechnologies, wild cards, that have not yet been assessed 5
  • 6. Abatement technologiesa number of measures to reduce CO2 emissions • Structural measures impose changes that areare available to the shipping industry (see Figure 3). The characterised by two or more counterparts in shippingemission reduction measures can be divided into four working together to increase efficiency and reducemain categories: emissions by altering the way in which they interact. Structural changes are believed to have a significant• Technical measures generally aim at either reducing potential to reduce emissions beyond that which is the power requirement to the engines or improving achievable with the above measures, but are generally fuel efficiency. These measures are linked to the design hard to develop and implement. For instance, Alvarez and building of ships (e.g. hull design), to optimisation et al. (2010) suggest CO2 reduction potentials in the of the propulsion system, to the control and efficient order of 6-10 % from adopting tailored port berthing operation of the main and auxiliary engines, and to policies, instead of using a ‘first-come, first-served’ retrofits on existing ships. These measures generally approach. have a substantial investment cost and potentially very significant emission reduction effects. Many technical Although not the main topic of this paper, it is noted measures are limited to application on new ships, due that measures intended for reduction of NOx and SOx to the difficulties or high costs of retrofitting existing emissions may interact with the CO2 reduction measures ships. and sometimes limit their applicability or potential. For• Alternative fuels and power sources form another instance, NOx reduction measures typically have a negative set of technical measures. The alternatives range effect on fuel consumption. Upcoming regulation of from supplementary measures (e.g. wind & solar) to NOx and SOx emissions from shipping will result in the a complete switch of fuel (e.g. to gas, bio-diesel, or introduction of measures to decrease these emissions. nuclear), and generally require significant investments upfront, both onboard and in new infrastructure. In the following section, some of the available solutions for• Operational measures relate to the way in which CO2 reduction are discussed in greater detail. the ship is maintained and operated, and include measures such as optimised trim and ballasting, hull and propeller cleaning, better engine maintenance, and optimised weather routing and scheduling. Operational measures do not require significant investment in hardware and equipment. The measures generally have low investment needs and moderate operating costs. Implementation of many of these measures requires execution of programmes involving changes in management and training. Many of these measures are attractive for purely economic reasons.6
  • 7. Figure 3: Overview of CO2 abatement measures available in shipping. 7
  • 8. Technical measures & alternative fuelsthe ‘technical measures’ and ‘alternative fuels’ traditional bunker tanks, which fit easily into a steel shipcategories include measures that typically require structure. LNG storage requires additional space sincesignificant upfront investments, but usually have a natural gas, both pressurised and liquefied, takes upsignificant potential for emission reductions. In the roughly twice the space occupied by diesel oil and variousfollowing paragraphs, natural gas, wind propulsion and safety constraints also have to be fulfilled.marine fuel cells are presented as examples of suchmeasures. Bunkering locations and infrastructure are further concerns. With few ships currently running on natural gas,natural Gas as main fuel source the incentives for developing the necessary infrastructureNatural gas consists mainly of methane (CH4), and is are limited. However, experiences from Norway show thatnaturally abundant, with rich reserves worldwide. Natural as ships fuelled by natural gas are built, the bunkeringgas as fuel produces more energy per unit of carbon infrastructure is also developed, demonstrating that whenreleased than traditional bunker oil. Therefore, a switch the need arises then the suppliers will meet it. The priceto natural gas potentially yields a reduction in the CO2 difference between natural gas and diesel oil is expectedemissions of more than 20% from a combustion engine. to increase in the years to come (favouring gas). This,However, emission of non-combusted methane (a potent together with new, stricter requirements for emissions toGHG) is a problem when operating outside the optimised air, will result in natural gas becoming a more appealingload-spectra. This means that the effective reduction option for use by ships. The introduction is expected toin CO2 equivalent units is lower then 20%, and engine start in short sea shipping , and in emission control areasbuilders are working to improve this. A switch to natural (ECA)defined by IMO.gas also eliminates SOx and particulate matter emissions,as well as significantly reducing NOx emissions. In recent An emerging option is retrofitting vessels to run on LNG.years, natural gas in the form of Liquefied Natural Gas By modifying the engine, auxiliary machinery, piping(LNG) has been used in some smaller vessels, mainly in networks, and tank configuration, existing vessels can beNorwegian waters. At present, approximately 20 LNG- adapted to use LNG.powered ships are in operation in Norwegian waters, themajority of which are supply ships and coastal ferries. Wind assisted propulsion Wind assisted propulsion involves using rigid or soft sails,One major drawback to installing an engine system that kites, or Flettner rotors to convert energy from the windruns on natural gas is the price; at present it costs 10 – 20 to thrust forces. Of these options, kites are currently the% more than a similar diesel system. One of the main cost most advanced wind propulsion concept. Wind energydrivers is the storage tank for natural gas, as pressurised or has experienced a recent revival due to increased fuelinsulated tanks are generally more expensive than diesel prices and environmental concerns. A number of differentoil tanks. arrangements have been tested over the years, and presently four commercial ships have kites installed for testing.The standard LNG storage tanks currently used arespherical and insulated. These occupy more space than Some forms of wind assisted propulsion, e.g. kites, can8
  • 9. be installed on standard ship designs and this might in order to avoid overheating. Further obstacles are thelower the threshold for widespread use of wind assisted relatively high installation and maintenance costs, andpropulsion. However, in order to optimise the effect, the requirement for crew expertise. Additionally, theit will be necessary to adapt current designs, both initial investment cost is 2-3 times higher than for that oftechnically and operationally. As the effectiveness of wind a comparable diesel engine. As a result of these barriersassisted propulsion is directly linked to the prevailing and current size of installations, the first marine-relatedwind conditions (strength and direction), there is some market for fuel cells is expected to be within auxiliaryuncertainty regarding the efficiency of the equipment. power. In the longer term, fuel cells might become a partAdditionally, wind assisted propulsion equipment is often of a hybrid powering solution for ships.relatively complicated to operate and adjust for changingwind conditions, and therefore many ship owners may be DNV has coordinated the FellowSHIP project, run inreluctant to install wind assisted propulsion. partnership with Eidesvik and Wärtsilä and supported by the Norwegian Research Council and Innovation Norway.Other concerns include the influence on cargo capacity, This project is the first to test large-scale marine fuel cellsand problems with accessibility to ports due to the onboard a merchant vessel (see Figure 4).installation of wind assisted propulsion equipment, suchas Flettner rotors and sails on masts. These installationscan potentially come into conflict with bridges and cargohandling equipment. However, new material technologieswill enable installation of designs and ideas that used tobe regarded as fiction. This might lead to wind assistedpropulsion being introduced into new shipping segments.marine fuel cellsA fuel cell converts the chemical energy of the fueldirectly to electricity, through electrochemical reactions.The process requires supply of a suitable fuel such asLNG, tomorrow’s renewable biofuels, or hydrogen, and asuitable oxidiser such as air (oxygen). CO2 emissions fromfuel cells are significantly lower than those from dieselfuels, and there are no particulate or SOx emissions, andnegligble NOx emissions.However, significant barriers associated with thecommercial use of fuel cells onboard ships remain to beovercome. At present, fuel cells must be operated in fairly Figure 4: Fuel cell equipment being installed on Eidesvik’s Viking Lady.constant loads, accepting only very slow load changes, 9
  • 10. Operational measuresoperational measures often amount to relatively The high potential for fuel saving will make speedsmall changes in the operation and maintenance of the reduction an interesting option for many ship owners.vessel. The implementation of many of these measures Market differentiation, into high and low speed service forrequires execution of programmes involving changes in some segments (e.g. container), will probably emerge. Itmanagement and training, but also computerized decision can be envisioned that cargo owners with high value cargosupport tools and reliance on external information would be willing to pay a premium for shorter transit times.sources.speed reductionSpeed reduction has been increasingly common in theshipping market in recent years. Speed reduction or slowsteaming has yielded significant reductions in operationalexpenses, especially in the container segment. The mainprinciple that makes speed reduction interesting, is thathull resistance increases exponentially with speed. Thus,even a modest speed reduction can substantially decreaserequired propulsion thrust. Less required thrust meanslower fuel consumption and reduced emissions to air.However, speed reductions may come at a cost, whenthe volume of cargo to be transported within a giventime frame (say 1 year) remains unchanged. One way ofimplementing speed reduction is to decrease the speed onall ships, which, in turn, will increase the number of shipsrequired to freight the same volume of cargo. Another wayis to improve efficiency in port, and utilise the time savedto decrease the speed of the ships. In the present marketconditions, the first option is obtainable, given the declinein world economy and the resulting availability of excesstonnage.Either way, a speed reduction will increase the transit timebetween ports, and thus is likely to increase the total cargodelivery time. Therefore, speed reduction is dependenton customer acceptance and on the additional cost to thecargo owner. The profit for the ship owner must balance Figure 8: Operational measures greatly impact on emissions.the cost for the cargo owner.10
  • 11. Most ships are optimised for a certain speed, and steaming must be trained in the use of such equipment. The veryat lower speeds might have unforeseen consequences low cost of this measure makes it an appealing option,in terms of engine maintenance and fuel consumption. despite the relatively low efficiency gains.Future ships will probably be designed for an optimalspeed range, allowing for a wider variation in speed than Weather routinGtoday. This will lead to both more flexible engine system Weather conditions (wind and waves), together withsolutions and better optimised hulls. ocean currents, influence the propulsion power demand of a ship at a given speed. Therefore, it is important thatThe cost of this measure is difficult to quantify, as it depends these factors are considered when planning a voyage, andon volatile factors, such as market conditions and fuel attempts should be made to minimise the negative effects.prices. However, in many cases this measure has proven tobe attractive purely from an economic perspective.adjustinG trim and draftThe trim and/or draft of a ship influence hull resistanceand therefore the fuel consumption. In general, trim anddraft are not routinely optimised when loading a ship andtherefore the design conditions will frequently not beachieved. By actively planning cargo loading to optimisetrim and draft, fuel savings can be made and emissionsreduced accordingly. Optimising trim and draft has beenestimated to be able to reduce fuel consumption by 0.5–2% for most ship types. However, for ships that often trade Figure 9: Avoiding adverse weather can save fuel and emissions.in partial load conditions (e.g. container, Ro-Ro, andpassenger), the effect can be up to 5 %. These numbers The longer a ship voyage, the greater the route choiceare based on full-scale tests and on detailed calculations flexibility for avoiding adverse weather conditions. Inperformed on a number of different ships in different addition, longer voyages usually include time spent intrades. unsheltered waters, where the influences from the weather are more important. Therefore, the greatest potentialFull-body ships, in which the resistance from viscous from weather routing could be realised in intercontinentalfriction is higher than wave resistance (e.g. tank and bulk), trades.will achieve a smaller fuel consumption reduction byoptimising trim and draft, and this will be similar for ships All ships have the potential for installing weather routingwith limited ballast flexibility (e.g. cruise). In order to be systems, which will include subscriptions to observed andable to optimise trim and draft, additional equipment is forecasted data on weather, waves, and currents. Somerequired (such as a better loading computer) and the crew ship segments (e.g. large container and Ro-Ro) have 11
  • 12. already implemented weather routing to some extent,and, therefore, the potential for emission reduction for The high potential forthese ships is lower. This is also assumed to be the case fornew ships coming into service. Weather routing potential fuel saving will makehas been assessed to between 0–5 %, depending on shipsize and type, and the typical trade of the different ship speed reduction ansegments. interesting option forIn addition, weather routing might provide benefits bydecreasing fatigue and weather damages, but these have many ship owners.not been included in this study. The cost of implementingthis measure is relatively low. However, depending on thenature of the trade, and parameters such as ship size, theinvestment may not always repay itself.12
  • 13. Cost effectiveness –How to navigate between measures?the Wide ranGe of solutions available for CO2 A baseline CO2 emission level for the fleet is determinedreduction means that comparing solutions and prioritising by an activity-based approach using 59 separate shipamong them provides a challenge, and requires a segments to represent the fleet. Then, for a given year, theconsistent and flexible methodology. One such approach cost, benefits, and potential emission reduction effect areis marginal abatement cost comparison. calculated for all available emission reduction measures for the entire fleet, thus giving the marginal abatement cost.The marginal abatement cost of a specific measure (e.g. This is achieved by applying a comprehensive databaseweather routing) is the monetary cost of avoiding 1 tonne of emission reducing measures (including the measuresof CO2 emissions through application of that measure, described in the previous section).considering any other measures previously applied. It isthe cost of reducing the next unit of emission, and can By gathering data on the measures described above, andbe defined by the CATCH parameter (Cost of Averting many more, and by applying them in the fleet modela Tonne of CO2-eq Heating) [USD/tonne] as suggested combining the fleet development and the technologyby Skjong (2009) and described by Eide et al. (2009b). development towards 2030 (Figure 7), an overview of theThe costs of each measure (including installation and reduction potential in the fleet can be obtained, alongoperation) and the expected economic benefits (including with the associated cost levels.fuel saving) are aggregated over the expected operationallifetime of a vessel or measure (whichever is shortest), anddiscounted to a present value. The net cost is then dividedby the expected volume of emission reduction; CATCH =(cost-benefit)/emission reduction.Measures that achieve CATCH levels below a giventhreshold are termed cost-effective. This means that theydeliver a sufficiently large emission reduction relative totheir cost.A model has been developed that can be used to assessthe marginal cost of all available measures applied to theworld fleet. This model has been applied in the previous‘Pathways publications’ from DNV (2009a; 2009b) and isdescribed by Eide et al. (2010a). The overall modellingapproach is to develop the world fleet iteratively, byadding and removing ships from the fleet. Moderate Figure 7: Expected developments in the price and reduction effects forgrowth rates have been assumed, based on the current CO2 abatement measures are combined with expected fleet development.order book and long-term trends for each ship type. 13
  • 14. In Figure 8, the marginal cost shown is the average cost The methodology, applied here for policy considerationsfor all ship segments. The curve summarizes the technical on a fleet level, is also applicable as a tool for ship ownersand operational opportunities to reduce emissions from when applied to smaller fleets or individual vessels. Itthe shipping fleet sailing in 2030. The width of each bar must be stressed that, on a fleet level, these values hiderepresents the potential of that measure to reduce CO2 significant differences in the performance of the variousemissions from shipping, relative to the baseline scenario measures from one ship segment to another. Measuresfor 2030. The height of each bar represents the average that do not have low marginal costs on average may stillmarginal cost of avoiding 1 tonne of CO2 emission through perform very well for certain ship segments (e.g. wastethat measure, assuming that all measures to the left are heat recovery). Caution should thus be applied when usingalready applied. The graph is arranged from left to right these results to make statements about the effectivenesswith increasing cost per tonne CO2 averted. Where the of specific measures, or for prioritising among them.bars cross the x-axis, the measures start to give a net cost However, when tailored to a single ship, or to a limitedincrease, instead of a net cost reduction. fleet, such figures are extremely useful to ship owners who wish to prioritise among the potential measures for their own ships. Specialised tools have been developed by DNV for this specific purpose. Figure 8: Average marginal abatement cost per reduction measure for the fleet in 2030. The marginal abatement cost of a specific measure is the monetary cost of avoiding 1 tonne of CO2 emissions through the application of that measure, considering any other measures previously applied (DNV, 2009b; Eide et al., 2010a).14
  • 15. CO2 abatement cost: How low can you go?By producing marginal cost curves (such as in the previous (e.g. USD 50/tonne as suggested by Eide et al. (2009b)).section) for a sequence of years, emission trajectories can In principle, the thresholds could be equivalent, providedbe derived that show by how much the fleet CO2 emissions that external costs are internalised (i.e. damage costs fromcan be reduced into the future, and the associated cost global warming caused by CO2 emissions are charged tolevels. Thus, a series of ‘snapshots’ for successive years, as the polluter). Figure 9 indicates that stabilising emissionsshown in Figure 8, can be used to produce scenarios for at current levels is possible at moderate costs, therebyfuture development. This links the marginal abatement compensating for the predicted fleet growth. However,cost curves to the emissions trajectories shown in Figure 9. significant reductions beyond current levels seem difficult to achieve.Figure 9 shows the resulting cost scenarios for CO2emissions. The baseline is shown as the highest stippled By considering alternative input data to the model,line, and the resulting emission levels at increasing a sensitivity analysis shows that fuel price is the mainmarginal cost thresholds are plotted below. Note that driving parameter on the cost per tonne CO2. The abovethe baseline is the same as that shown in Figure 1, and conclusions are based on a low fuel price estimate. Asrepresents the growing emission levels for the fleet, under the sensitivity analysis shows that higher fuel prices willthe assumption of moderate fleet growth and without significantly increase the cost-effective reduction potential,implementation of any of the reduction measures. The the conclusions appear to be robust. The same analysisbottom line illustrates the resulting emission level, provided shows that the results are more sensitive to changes in thethat all the measures analysed in this study are applied to emission reduction effect of these measures, than to thethe fleet, irrespective of cost. These results show that 19 % costs of the measures. Changes to the costs alone result inof the baseline emissions in 2010 can be reduced in a cost- only small impacts.effective manner. For 2020 and 2030 the correspondingnumbers are 24 % and 33 %, respectively. By increasingthe marginal costs level to USD 100/tonne results in areduction potential of 27 % in 2010, 35 % in 2020, and 49% in 2030. Additionally, it is evident that further increasesin the cost level yields very little in terms of increasedemission reduction. Note that the term ‘cost-effective’potential is used here to mean emission reduction potentialwith marginal costs below zero (0). The term is relativeand is used in relation to a predefined threshold, whichthen will vary depending on the viewpoint of the decisionmaker. For a ship owner, the threshold will naturally bezero. For a regulator, acting on behalf of society at large,the threshold should reflect the adverse effects of theseemissions, and therefore the threshold should be higher 15
  • 16. Figure 9: CO2 emission scenarios for the world fleet resulting from applying all emission reduction options below a given marginal cost level (CATCH) ,USD/tonne. From Eide et al. (2010a).16
  • 17. Wild cardsthe precedinG analyses show that, in absolute terms, directly to a propeller or can generate electricity in anit will be difficult for shipping to reduce emissions below electric propulsion concept. Nuclear power is an enticingcurrent levels. Hence, it will be difficult to contribute to technology as, during operation, nuclear powered shipsabsolute reductions and to the temperature stabilisation will have no emissions to air. The first nuclear poweredtarget of 2°C above pre-industrial levels. However, merchant ship was launched in the 1960s, and there arealthough the current study contains more measures currently about 150 nuclear powered ships in operation,than any previous study, it should be noted that not all most of which are military vessels.conceivable abatement measures have been included inthe analyses. Those measures that were included in the There are currently several new designs for nuclearcurrent study were limited to those that were judged to be powered merchant ships in progress. The land-basedmature (or very close to mature) at the present time, and revival of nuclear power has led to the development oftherefore feasible for installation onboard. The measures many “small” reactors. These reactors are more suited inomitted in the analysis of the 2030 potential include size to merchant ships, and it is therefore predicted thatsome presently known technologies, but other solutions, nuclear powered ships will emerge. The lengthy processcurrently undiscovered, could also emerge, that may well of obtaining appropriate permissions and conducting testshave a significant impact in 20 years. means that next generation nuclear powered ships can only become a reality by 2020-2030, at the earliest.If the aim is to achieve an absolute reduction inshipping emissions, then a significant boost in research, The main barrier for nuclear powered ships is related todevelopment and testing is needed to overcome barriers the risks from radioactive waste and the proliferation ofand to accelerate the process of bringing novel, promising nuclear material. Public concerns also have the potentialtechnologies to the market, and to find other solutions, yet to limit the number of ports at which these ships can call.to be imagined. It is also noted that stronger fleet growth Another issue is the decommissioning and storage ofthan assumed herein will exacerbate the difficulty in radioactive material, as well as the need for specializedreducing emissions in absolute terms, such that the need infrastructure for serving the ships. This infrastructurefor new options becomes even more pressing (Eide et al., is virtually nonexistent at present and would have to be2009a). developed. Another significant barrier is the high upfront investment costs.In the following paragraphs, three wild card technologiesare presented, all of which have the potential to play some A feasibility study of nuclear powered ships conducted bypart in the future pathway to low carbon shipping. DNV indicated that, at today’s fuel prices, nuclear power is economically feasible for large container ships and bulknuclear poWered ships carriers (DNV, 2010).Nuclear powered ships use the heat created from anuclear reactor to generate steam, which in turn drivesa steam turbine. The turbine can be either coupled 17
  • 18. carbon capture and storaGe on ships small-scale facilities. As CCS technology is not yet mature,In general, Carbon Capture and Storage (CCS) is the implementation of such systems onboard ships remains aprocess of capturing CO2 from large point sources, such as possibility of the future that requires considerable furtherfossil fuel power plants, and storing it in such a way that it investigation. However, the technology might be an optiondoes not enter the atmosphere. Storing CO2 in geological for some of the larger ocean going ships.formations is currently considered the most promisingapproach. DNV currently participates in a research consortium that is developing and screening alternative CCS processesToday, there are several ongoing CCS pilot projects in order to derive a front-end design for a CCS solutionworldwide, but a full-scale, end-to-end CCS chain does onboard ships.not yet exist. There are various key challenges associatedwith CCS in general. One is the cost, which is currentlyvery high, although expected to drop in the future as thetechnology matures. Another issue is whether leakageof stored CO2 will compromise CCS as a climate changemitigation option. Hence, there is a requirement to fillknowledge gaps and to investigate the issues involved inthe development of a fully integrated CCS system.While the main sources of CO2 are expected to be fossilfuel power plants and large-scale process industry, CCSis, in principle, also applicable to smaller sources ofemissions, such as commercial ships. In order for CCS tobe a suitable technology for the maritime industry, noveldesigns are needed for onboard capture and temporarystorage of CO2 emissions for ships in transit. The ships canthen store the CO2 until discharge into CO2 transmissionand storage infrastructures at the next suitable port, orto a specialised discharge facility. The CO2 can then bestored in a common storage reservoir shared with otherCO2 sources.In addition to the challenges related to CCS in general,there are challenges that are specific to its use in maritime Figure 10: CO2 captureapplications. These include the space limitations onboard,the marine environment, and the fact that this will be18
  • 19. radical ship desiGns facilities. Thus, having a new design built will almost alwaysThe conventional designs of the major ship types, e.g. bulk be more expensive than a standard design. Radical designscarriers and oil tankers, have remained largely unaltered will emerge first in the specialised ship segments, beforefor many years. Notable exceptions are the ever larger and more traditional ship segments can follow. The X-BOW®faster container ships and cruise ships, as well as special hull design by Ulstein that emerged in the offshore supplypurpose vessels serving in niche markets. There are well- fleet a few years ago is an example of a radical, fullyproven concepts for all these ship types, and as these have operational design with the potential to be used in otherperformed well there has been little interest and incentive segments as well.for radical changes in design. With new designs comes the necessity for new constructionHowever, due to consistently high fuel costs and the methods, as well as for rules and regulations. Today, thesecross-industrial emphasis on environmentally friendly are focused on traditional designs and methods, andtechnologies, this is no longer the case. The increased new developments are needed in order to facilitate novelfocus on operational flexibility in design, speed, and radical designs (Papanikolaou, 2009; Denmark, 2009;cargo, energy efficiency and reduction in emissions, DNV, 2001). The move towards a holistic, multi-objective,creates a potent driver for creating “radical” designs. and multi-constrained ship design will require greaterNew technologies within drag reduction, propulsion, utilisation of computational modelling tools and formaland materials are entering the market, enabling novel optimisation methods. A collective lift in the shippingdesigns to become reality. Innovative designs replacing industry will be necessary in order to facilitate this process,conventional ballast tank systems are being developed, and the participation of some first-mover ship owners isand hybrid power systems are emerging. A new mix of critical.technological, operational, and regulatory triggers resultsin an entirely new specification framework, in which In recent years DNV has explored new radical designs inradical designs can provide satisfactory solutions. several internal projects, such as ‘Containerships of the Future’ (see picture) and ‘Project Momentum’ both ofMany shipyards have been organised for the production of which aim at improving the energy efficiency of standardfairly standardised ships, in assembly line style production designs. Figure 11: Radical ship concepts; DNV’s ‘Containership of the Future’. 19
  • 20. other impactinG factorsThe fleet size, or rather the fleet growth rate, has been The diversion of trafficidentified as a factor that will impact on the baselineemissions of the fleet, and hence on the achievable from southern routesemission levels. However, there are numerous other factorswith the potential to affect emission levels. Some of these to shorter Arctic routescould be considered as emission reduction measures intheir own right, while others are more naturally labelled as has the potential toframework conditions. Such factors include the openingof new sea routes, e.g. in the Arctic. The diversion of reduce global shippingtraffic from southern routes to shorter Arctic routes hasthe potential to reduce global shipping emissions (Eide et emissionsal., 2010b). The expansion of the Panama Canal is anotherexample of how traffic flows may be altered by removingphysical obstructions to trade.This is also linked to the increase in ship size due toeconomy of scale. As larger vessels have less emissions perunit of transport work, a significant shift in size from thecurrent average could make a considerable contributionto reducing emissions.A very different factor is related to new business modelsin shipping. Alvarez et al. (2010) have shown that CO2emissions can be reduced by adopting tailored portberthing policies, instead of using the ‘first-come, first-served’ approach. Although perhaps limited in themselves,combinations of such factors could make a substantialcontribution to reducing emissions from shipping beyondthat which has been indicated in this publication.20
  • 21. Regulation of CO2 emissionsthe results of this study indicate that economics is policy options, and market-based instruments have alsoof limited effect as a driving factor for emission reduction. been assessed.The indication that there is a substantial potential forcost-effective reduction in the present fleet (see Figure Specifically, the technical option is limited to a mandatory9), demonstrates that potentially profitable measures limit on the energy efficiency design index (EEDI) forfor emissions and fuel reductions are currently not fully new ships. The main drawbacks of this option are theexploited. Thus, regulatory means are necessary to ensure environmental effectiveness (not all ships covered) andthat there is full implementation of the available measures. also the cost-effectiveness (only technical measures are ‘allowed’). The operational policy options evaluated areThe lack of response to economic incentives can, to some mandatory limits on the energy efficiency operationalextent, be explained by the division between ship owners indicator (EEOI) and the adoption of a mandatory orand ship charterers. Whilst a ship owner typically pays voluntary ship efficiency management plan (SEMP). Thefor the investment in a new ship, the charterer pays for SEMP scores poorly on environmental effectiveness, whilethe fuel. The contract between charterer and owner will the EEOI has a low rating regarding the practical feasibilityusually result in the profit from fuel saving being gained of its implementation, due to the challenges in establishingby the charterer, while the bill for the more expensive ship an appropriate baseline. The market-based mechanismsmust be met by the owner. Further studies are warranted include the maritime emission trading system (METS) andto investigate this issue in more detail. When designing an international GHG fund sustained by a fuel levy. Theregulations and incentives aimed at reducing the emissions, main drawback to market-based mechanisms seems to beit is essential that the barriers to implementation (e.g. related to the practical feasibility of implementation, duenon technical, training) are understood. Regulations to the need for extensive administration.should assist in overcoming barriers, and care should betaken to ensure that new barriers are not unintentionally Regardless of the regulatory mechanism, there is a needconstructed by the introduction of new regulations. to determine the required emission reductions from shipping, i.e. the target level. As a rational and transparentThe IMO is working to establish GHG regulations for approach to determining such a target, Skjong (2009)international shipping (see e.g. IMO, 2008). While the and Eide et al. (2009b) suggested using a cost-effectivenessform of regulations is still under debate, it seems clear criterion as a link between global reduction targets andthat some form of CO2 regulations in shipping will be shipping reduction targets. This approach can be pursuedimplemented in the near future. regardless of regulatory mechanism. Longva et al. (2010) provide examples of how this can be done.In the second IMO GHG study (Buhaug et al., 2009),the most relevant policy options have been assessed withregard to environmental effectiveness, cost-effectiveness,incentive for technological change, and practical feasibilityof implementation. Technical policy options, operational 21
  • 22. Warming or cooling from shipping emissions?While debating how the shipping industry can reduce itsCO2 emissions, it is important to recognise that CO2 isnot the only emission of relevance from a climate changeperspective. Other emissions from shipping, such as NOxand SOx, not only impact on health and environmentalissues, but also have an effect on the climate. While CO2emissions result in climate warming, emissions of sulphurdioxide (SO2) cause cooling through effects on atmosphericparticles and clouds, while nitrogen oxides (NOx) increasethe levels of the GHG ozone (O3) and reduce methane(CH4) levels, causing warming and cooling, respectively(Fuglestvedt et al., 2009). The result is a net global meanradiative forcing from the shipping sector that is stronglynegative (Eyring et al., 2010; Fuglestvedt et al., 2008),leading to a global cooling effect today (Berntsen et al.,2008). However, this is about to change. New regulationson shipping emissions of SO2 and NOx have been agreed(IMO, 2009), and these will, as an unintended side-effect,reduce the cooling effects due to emissions from theshipping sector (Skeie et al., 2009).Nevertheless, the warming effect of CO2 emissions isundisputed. Lower levels of SOx and NOx emissionsmean that future shipping emissions will have a morepronounced warming effect on the Earth’s climate, addingto the urgency of addressing this problem. Figure 13: Global mean temperature changes due to emissions from shipping of CO2 and SO2, and NOx-induced changes in O3, CH4, and O3PM, and the total temperature change (ΔT TOT). Plots show (a) the response to a scenario with all emissions kept constant at year 2000 levels, and (b) the responses to a scenario with SO2 emissions reduced by 90 % with all other emissions kept at year 2000 levels. From Fuglestvedt et al. (2009).22
  • 23. Conclusions and recommendationsconclusions model that takes into account assumed ship-type specificThe shipping industry is under pressure to reduce CO2 scrapping and building rates. A baseline trajectory for CO2emissions. Maritime rules and regulations that safeguard emission is then established. The reduction potential fromthe interests of society in this respect, i.e. that limit climate the baseline trajectory and the associated marginal costchange effects of emissions, are likely to emerge in the levels are presented.years to come. As a result, individual ship owners andoperators will face pressures, both from the anticipated The results demonstrate that a scenario in which CO2environmental regulations and also from high fuel prices, emissions are reduced by 33 % from baseline in 2030 isto reduce their fuel consumption and thus their CO2 achievable at a marginal cost of USD zero (0) per tonneemissions. Their main concern will be to comply with reduced. At this cost level, emissions in 2010 can bethe new rules and to outperform competition. Thus, reduced by 19 %, and by 24 % in 2020. A scenario with 49two issues arise in parallel regarding the climate impacts % reduction from baseline in 2030 can be achieved at afrom shipping. These are: 1) technical and operational marginal cost of USD 100/tonne CO2 (27 % in 2010 andsolutions for cutting emissions on individual ships, and 35 % in 2020).2) designing appropriate regulations that safeguard theinterests of society as a whole. The results also indicate that stabilising fleet emissions at current levels can be attained at moderate costs,The range of technologies and solutions that are available compensating for the projected fleet growth up to 2030.for reducing GHG emissions from ships creates the need However, significant reductions beyond current levels seemfor a consistent and rational system for selecting the most difficult to achieve. If an absolute reduction in shippingappropriate measures. This applies to individual ship emissions is the target, then a significant boost in research,owners, policymakers, and regulators. Cost-effectiveness is development and testing is necessary in order to overcomeone such rational system for decision making. In this study, barriers and to accelerate the process of bringing novelan overview of the available solutions has been presented, technologies to the market, and also to discover solutionsalong with tools and methods for assessing the solutions that are yet to be imagined. This position paper hasfrom a cost-effectiveness perspective. discussed three such wild card technologies, all of which have the potential to play some part in the future pathwayIn addition, this study has assessed the cost and reduction to low carbon shipping.potential for a range of abatement measures. The modelused in the assessment captures the world fleet up to In addition to developing technical and operational2030, and the analyses include references to 25 separate measures that will enable ships to reduce emissions, workmeasures. A new integrated modelling approach has been to establish international regulation of CO2 emissionsused, that combines fleet projections with activity-based from shipping is also in progress. Regardless of theCO2 emission modelling and projected development of regulatory mechanism selected, there is a need for rationalmeasures for CO2 emission reduction. The world fleet determination of the required emission target level. A cost-projections up to 2030 are constructed using a fleet growth effectiveness criterion, as a link between global reduction 23
  • 24. targets and shipping reduction targets, has been suggested large-scale demonstration projects are necessary.for this purpose. Development of tools and methods for assessing radical and novel designs, along with the complex ship systems,Finally, it is recognised that CO2 is not the only significant should be kept in focus. Improved tools for evaluating thepollutant from shipping that is of relevance from a climate performance of new solutions will ease their introductionimpact perspective. Whilst the warming effect of CO2 into the shipping industry.emissions is undisputed, a reduction in the levels of SOxand NOx emissions will exacerbate the warming effect ofshipping emissions on the Earth’s climate, adding to theurgency of addressing this issue.recommendationsThe results of this study indicate that economics isinsufficient as a driving factor for addressing this issue,and that change and enforcement through regulatorymeans are necessary to ensure full implementation of themeasures. For designing regulations and incentives aimedat reducing emissions, further studies are warrantedto understand the barriers to implementation (e.g.non-technical, training). Regulations should assist inovercoming barriers, and care should be taken to ensurethat new barriers are not unintentionally constructed bythe introduction of new regulations.For these reductions to occur, a concerted effort from allparties of the ship transportation value chain is necessary,including yards, technology suppliers, owners, operators,cargo owners, and charterers. New ways of collaborating inthe operational and commercial phase must be developed,with clear incentives for all parties to improve operationstowards overall emission reduction (new contract typesbetween parties, focussed environmental management,accurate monitoring systems, etc.).In order to develop innovative solutions and to implementthem in a rather conservative industry such as shipping,24
  • 25. ReferencesAlvarez, J.F., et al., 2010. A methodology to DNV, 2009a. Pathways to low carbon shipping. Endresen, Ø., et al., 2004. Substantiation ofassess vessel berthing and speed optimisation Public memo released at Norshipping, June a lower estimate for the bunker inventory:policies. 2010 Annual Conference of the 2009. Comment on „Updated emissions from oceanInternational Association of Maritime shipping‟ by James J. Corbett and Horst W.Economists, Lisbon. DNV, 2009b. Pathways to low carbon shipping Koehler, Journal of Geophysical Research, 109, - Abatement potential towards 2030. Public D23302, doi: 10.1029/2004JD004853.Berntsen, T. and Fuglestvedt, J. S., 2008. Global memo released at COP15, December 2009.temperature responses to current emissions Endresen, Ø., et al., 2005. Improved modellingfrom the transport sectors. Proc. Natl. Acad. Sci. DNV, 2010. Nuclear Powered Ships – A of ship SO2 emissions – A fuel based approach,U.S.A. 105 (49), 19154–19159. feasibility study. External version of DNV Report Atmospheric Environment, 39, pp. 3621-3628. no. 2010-0685.Buhaug, Ø., et al., 2009. Second IMO GHG study Endresen, Ø., et al., 2008, The environmental2009; International Maritime Organization Eide, M. et al., 2009a. Future CO2 emissions: impacts of increased international maritime(IMO) London, UK, April 2009. Outlook and challenges for the shipping shipping, past trends and future perspectives. industry. Proceedings of the 10th International OECD/ITF Global Forum on Transport andDalsøren, S. B., et al. 2007, Environmental Marine Design Conference (IMDC), Trondheim, Environ. in a Globalising World, Guadalajara,impacts of the expected increase in sea Norway. Mexico. Also published in OECD (2010),transportation, with a particular focus on oil Globalisation, Transport and the Environ., ISBNand gas scenarios for Norway and northwest Eide, M.S., et al., 2009b. Cost-effectiveness 978926407919-9.Russia, Journal of Geophysical Research, 112, assessment of CO2 reducing measures inD02310, doi:10.1029/2005JD006927. shipping. Maritime Policy & Management, Eyring, V, et al., 2005b. Emissions From 36:4,367 — 384. International Shipping: 2. Impact of FutureDalsøren, S., et al., 2009. Update on Technologies on Scenarios Until 2050. Journalemissions and environmental impacts from the Eide, M.S., et al., 2010a. Future cost scenarios of Geophysical Research, 110, D17306,international fleet. The contribution from major for reduction of ship CO2 emissions. In print, doi:10.1029/2004JD005620.ship types and ports. Atmos. Chem. Phys., 9, Maritime Policy & Management.2171-2194, 2009. Eyring, V. et al., 2010. Transport impacts Eide L. I. et al., 2010b, Ship transport over Arctic on atmosphere and climate: Shipping.Dalsøren, S., et al., 2010. Impacts of the Large in 2030 and 2050, DNV Research & Innovation, Atm. Env., 44, 4735 – 4771, doi:10.1016/j.Increase in International Ship Traffic 2000−2007 position paper 3-2010. Available at http:// atmosenv.2009.04.059.on Tropospheric Ozone and Methane. Environ. www.dnv.com/resources/position_papers/Sci. Technol., 2010, 44 (7), pp 2482–2489. DOI: shipping_arctic.asp. Eyring, V., et al., 2007. Multi-model simulations10.1021/es902628e. of the impact of international shipping on Endresen, et al. 2007, A historical reconstruction atmospheric chemistry and climate in 2000 andDenmark, 2009. Goal-based new ship of ships fuel consumption and emissions, 2030. Atmos. Chem. Phys., 7, 757–780.construction standards - Guidelines on approval Journal of Geophysical Research, 112, D12301,of risk-based ship design, MSC 86/5/3. doi: 10.1029/2006JD007630. Fuglestvedt, et al., 2008. Climate forcing from the Transport Sectors. Proc. Natl. Acad. Sci.DNV, 2001. “Qualification procedures for new Endresen, et al., 2003. Emission from U.S.A., 105, 454–458.technology”, Recommended Practice DNV- international sea transportation andRP-A203. environmental impact, Journal of Geophysical Research, 108 (D17), 4560, doi:10.1029/2002JD002898. 25
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  • 28. www.dnv.com Det Norske Veritas Tel: +47 67 57 99 00 NO-1322 Høvik, NorwayDesign, layout and print production: Erik Tanche Nilssen AS, 11/2010 Printed on environmentally friendly paper.