Singapore Bets Heavily!
Not since the piracy crisis of 2009-2010, has the world been transfixed on eliminating a single menace more urgently and forcefully than the scourge of removing carbon in vessels. Decarbonisation is perhaps the single most defining challenge of the times. Jaya Prakash files this story.
Never a year goes by in Singapore without a tree planting day! Right from the times in 1970 when Singapore’s first Prime Minster Lee Kuan Yew mooted the year, the only exception to the ‘national sport’ was perhaps during the COVID-19 years.
There was no official explanation then in 1970 why tree planting was needed. But by some stroke of a deus ex machina what then looked like a non-event, now lies at the heart of yet another national sport: beating off the ravages brought on climate change and global warming.
Climate change, according to the nation’s port regulatory body, is a complex global challenge that calls for concerted global action.
As part of Singapore’s pledge under the Paris Agreement to reduce national domestic emissions, Singapore has announced its enhanced National Determined Contribution and its Long-Term Low-Emissions Development Strategy to the United Nations Framework Convention on Climate Change in 2020, which aims to peak domestic emissions at 65MtCO2e around 2030, with a view to achieve net zero emissions as soon as viable in the second half of the century.
Recently, Singapore has adopted the Singapore Green Plan 2030 as a whole-of-nation effort, to rally bold and collective action to tackle climate change and decarbonisation.
To ensure it does not get blindsided, the Maritime, and Port Authority of Singapore (MPA) is developing the Maritime Singapore Decarbonisation Blueprint 2050 to chart out decarbonisation strategies to mitigate Singapore’s maritime transport emissions and reduce Green House Gas (GHG) emissions from international shipping.
The consultation focuses on seven areas namely in port terminals, domestic harbour craft, future marine fuels and bunkering standards, Singapore Registry of Ships, efforts at the International Maritime Organisation, carbon accounting awareness and capabilities and maritime decarbonisation research and development.
It may be too soon to rate the effectiveness of the ambitious programme but, they nevertheless represent a very promising and well intentioned, start.
In all fairness shipping does contribute to GHG. Most reports pointing to a 2% to 3% uptick of the noxious emissions having squarely placed the blame on ship-borne traffic. With more than 130,000 ships calling at Singapore’s ports, it is a source of acute concern. Thus, it was and is for that reason, offshore emissions gauging devices are placed in Singapore’s sea frontiers to measure the quantity of emissions spewed so as to have the crafts banished from ever landing on its shores.
Just as to where Singapore is concerned, transhipment is one of the sectors where its bread is buttered; and it is buttered handsomely. Thus, maintaining solidarity with global efforts aimed at tackling decarbonisation is perhaps the only known bit of a Hobson’s choice open to the city-state.
Since the inauguration of the Global Centre for Maritime Decarbonisation or GCMD, last August developments aimed at moving decarbonisation have moved at a rapid clip.
Just recently, GCMD signed a knowledge partnership agreement with the Global Maritime Forum to hasten decarbonisation to a low-carbon future.
The two organisations will collaborate around low or net-zero emission projects and programmes, such as the sharing of knowledge and data analytics, and in support of the development of green corridors.
Getting rid of GHG is and always been the driving mission of GCMD. It says ammonia as being one of the alternative fuel solutions available. But there is a caveat. It adds, supply chain-related gaps need to be addressed before green ammonia can be safely used by the maritime industry and these include global green production capacity and supply, bunkering standards and procedures around safety, operations & the environment, bunkering infrastructure.
That is not all. Attempts are also made to use hydrogen fuel cells for ships which is the first of experiments with GHG in its ‘cross hairs’. Amongst the recommendations are the converting of ferries to run on electricity and the building of ships that use methanol and ammonia as marine fuel.
Multinational companies ABS Group and NOV will be partners in studying how best to store, recover and transport green ammonia, a renewable fuel made from sunlight, air, and water.
If there is indeed something to be guessed, it is Singapore’s solidarity with global agreements and arrangements. The nation’s Office of Energy Efficiency and Renewable Energy (EERE) is earnestly embarking on research, development, demonstration, and deployment of technologies and solutions to equitably transition America to net-zero greenhouse gas emissions economy-wide by no later than 2050. To lead in this transition, EERE’s FY 2022 budget request is $4.7 billion. The request calls for activities and programs to help decarbonise the electricity, transportation, while training the next generation of clean energy workers; supporting state and local economies; creating new, high-quality, good paying jobs in the field; and deploying new, efficient, and clean technologies that are affordable for all Americans.
Singapore’s PSA Marine, an adjunct body of its main port of Port of Singapore Authority (PSA), has opted for sustainable shipping by reducing its carbon footprint with the use of a digital solution, the vessel pilot communication.
Mr Jimmy Koh, Head of Digital Transformation and Chief Pilot of PSA Marine, said, “We are delighted to garner support from the major shipping lines in our digitalisation and decarbonisation journey. During the pilot trial, the participating shipping lines have provided valuable feedback on the VPC digital solution. With its launch, all vessels calling at the Port of Singapore can benefit from information that can help them play their part in environmental sustainability.”
Is The UK At A Crossroads? Let’s Find Out
In a dry yet bone chilling warning in 2018, the IMO warned that maritime transport emitted 938 tonnes of CO2 in 2012. That is a staggering amount by any measure!
By 2050, shipping CO2 emissions are projected to increase between 50% and 250% if no drastic action is taken. To reverse this trajectory, the 174 member states of the International Maritime Organisation (IMO) adopted an “Initial IMO Strategy on reduction of Greenhouse Gas emissions from ships” (or “Initial Strategy” for short) in April 2018. The Initial Strategy’s declared aim is to phase out greenhouse gas (GHG) emissions from shipping “as soon as possible in this century”. More specifically, the strategy also sets specific emission targets for the shipping sector.
Yet as is commonly known, improving the energy efficiency of ships by technology can reduce the needed emission reductions. To begin are nascent attempts at hull design improvements, air lubrication and bulbous bows to reduce friction or waste heat recovery as a source of energy, says the International Transport Forum (ITF) in one of its publications. And other steps like slow steaming, smoother ship-port interfaces and bigger ships that carry more freight in relation to energy used could achieve further emission reductions. Finally, switching from oil to alternative fuels and renewable energy can cut shipping’s carbon emissions.
In essence that is where the world is at now. Alternative fuels and renewable energy can deliver much of the required reductions, says the ITF. Advanced biofuels are already available, albeit in limited quantities. Gradually, they should be complemented by other natural or synthetic fuels such as hydrogen, methanol, and ammonia. Wind assistance for ships could reap additional reductions. The first electric ships already provide transport on short-distance routes.
Britain’s Transport Secretary Shapps has proposed that an absolute zero target is discussed during Maritime week and then debated at the International Maritime
“As a maritime nation with a rich history, and host of COP26 this year, we are proud to be at the forefront of the greener era for maritime, charting an international course for the future of clean shipping,” Shapps said.
“I’m incredibly excited by the changes happening in this sector, with the speed of progress highlighted by the prospect of zero-emission commercial vessels in UK waters in the next few years and green Channel crossings within a decade. Acting now allows us to lead the charge on this global shift, creating highly skilled jobs for British workers and shaping the landscape for what clean shipping and trade will look like for future generations.”
Additionally, the UK’s Transport Decarbonisation Plan sets out how the Government will decarbonise every mode of transport. The Plan pledges to “plot a course to net-zero” for the UK domestic maritime sector. This looks set to include indicative targets from 2030 and to reach net-zero “as early as is feasible”. As part of the Plan, the Government will consult on a planned phase-out on the sale of new non-zero emission domestic vessels and will extend the Renewable Transport Fuel Obligation (RTFO) to support renewable fuels of non-biological origin used in shipping.
Internationally, the Plan will see the UK press for greater ambition during the 2023 review of the International Maritime Organisation’s Initial Greenhouse Gas Strategy and urge accelerated decarbonisation.
At the International Maritime Organisation’s latest meeting in November, members voted in favour of amending measures designed to limit the carbon intensity of ships. While proponents say the measures will make each ship more efficient, the consensus is that the rule will leave loopholes for the sector to increase emissions through to 2030.
The UK Government has outlined plans to stop ships from running their engines or using diesel generators while berthed, replacing this practice with new infrastructure that will connect them to onshore electricity.
All the same the UK Government has understood the importance of transition to shore power.
“Shore power has the potential to play a positive part in the future of zero-emission maritime, although it is an area that currently faces some significant challenges,” said the UK Major Ports Group’s chief executive Tim Morris.
Last March, the Department for Transport (DTF) launched the Clean Maritime Demonstration Competition – an initiative aimed to find and fund innovations in the field of zero-emission maritime vessels, a move aimed at snagging hydrogen-fuelled ferries, automation systems for efficiency and ammonia for fuel and shore power trials.
The overarching plan includes developing emissions targets for the maritime sector beginning in 2030 and to set a net-zero deadline “as early as is feasible”. These targets could come in the Clean Maritime Plan, expected to be rolled out soon.
Last year, the UK became one of more than a dozen nations signing up to a universal declaration creating zero-emission shipping routes between ports at COP26. The so-called, Clydebank Declaration, a clean maritime initiative, aims to establish at least six corridors by the mid-2020s, which are likely to be shorter routes, and to add “many more routes”, including long-haul routes, by 2030.
Malaysia Is Committed
Like the UK, Malaysia too, sees merit in signing up to international agreements. A very senior official close to MTT Shipping told Marine and Offshore, “We are a party to IMO targets to reduce Green House Gases (GHG) by 70% by 2050”
Even as Malaysia may not be a ‘big’ maritime nation like Singapore, scrubbers continue to be the mainstay of decarbonisation efforts for as how the official told, “Malaysia’s bread is buttered mainly in the offshore business”.
“The thing about LNG is that its prices are too high”, meaning as otherwise the need for a hedging mechanism, that could dampen owners from returning to carbon-emitting fossil fuels as a default source.
Last September, Malaysian Prime Minister Datuk Seri Ismail Sabri Yaakob announced Malaysia’s commitment to become carbon neutral as early as 2050. But there is no announcement of plans to implement liquid or green hydrogen as a conceivable means to power the shipping and port industries.
That could be understandable for according to various news reports, Malaysia has almost insurmountable reserves of LNG, a colourless and odourless, fossil fuel which whilst being touted as a clean fuel has methane properties.
As recently as February 2022, it its national oil company Petronas – the company overseeing its LNG and oil exports – showcased its commitments to IMO targets by initialling an agreement Japan’s Mitsui O.S.K Lines to explore opportunities in liquefied carbon dioxide (CO2) transportation for the carbon capture, utilisation, and storage (CCUS) value chain in Asia Pacific and Oceania regions.
Petronas’s chief executive officer, of Upstream, Adif Zulkifli said, “Petronas continuously explores opportunities to reduce carbon emissions in our operations. This collaboration is important as long haul liquefied CO2 transportation plays an essential role in the CCUS value chain. We are confident that MOL’s strong track record, coupled with its recent acquisition of Larvik Shipping AS which has safely transported CO2 for over 30 years, will position both PETRONAS and MOL as leaders in the region for long haul transportation of liquefied CO2.
Petronas, over its website, says it supports the transition towards lower carbon energy sources by applying technology that lowers emissions across the value chain, which includes carbon capture, transport, and storage.
As it appears it is noteworthy that nations have embarked on decarbonisation. Singapore has LNG infrastructure
Apart from hybrid ship engines on short-sea travel, the pressure is really on how to transition from fossil fuels. As UNCTAD pointed out, “transition will happen gradually, from a growing contribution of renewable energy within the energy mix consumed. In other words, the thirst for energy will be met by a growing degree of renewable production over the next 20-30 years”.
The Finance Quotient
As shipbuilding is hugely capital intensive and ill-afforded by many, technological changes, regulatory and periodic financial requirements are the other spanners in the works.
A joint, voluntary undertaking called Poseidon Principles and cited by UNCTAD issued by many financial institutions including lenders, financial guarantors, lessors, and export credit agencies provides a framework of principles applicable on ship financing transactions for complying with the Imo decarbonisation targets. It remains to be seen if these principles will suffice to unleash the supply of credit to shipowners in an environment where maritime finance has already been scarce for many years.
The IMO, says UNCTAD, has also assessed those old ships could also meet these targets by reducing speed. Fuel consumption of the main engine in relation to the speed of the vessels has a cubic correlation, meaning that one unit reduction in speed leads to a much greater reduction in fuel consumption and vice versa.
Technological and Fuel Choices
Fuelling vessels with hydrogen, green or liquid hydrogen, methanol, or ammonia is soon expected to be the norm. Hydrogen can be stored, carried on ships to different parts of the world and used as bunker fuel (provided ships are equipped to utilize hydrogen as a fuel source).
Hydrogen that is produced today, continues UNCTAD, uses carbon intensive natural gas, i.e. “grey hydrogen”. Equally, the black (bituminous) and brown (lignite) coal could be used for black or brown hydrogen production. To reduce total GHG emissions, it will be important to generate hydrogen from renewable energy sources. Hydrogen and ammonia can then be piped and stored at ports and used as bunker fuel in ships equipped with new generation power systems.
Burning distillates is also a likely option for most owners, both for existing and newbuild vessels. While there may be a peak in fuel prices as demand increases, prices should come down as supply increases.
But as it always is in an industry as fragmented as shipping arriving at an universal consensus will always remain where it has always been: at an impasse.