This is Part 2 of a short series on efforts to decarbonize the global shipping industry. Part 1 discussed international policy and politics. This part looks at efficiency measures.

Those in the shipping business have long had some incentive to make their vessels travel more efficiently: saving money on fuel. But the heavy fuel oil they use is a “bottom-of-the-barrel” byproduct of crude oil refining and, while the price fluctuates, it generally is less expensive than other fossil fuels. So, getting shipowners to optimize operations or redesign their vessels on a large scale requires regulations, experts say.

A big regulatory push may be steaming into port. The European Union recently began regulating greenhouse gas emissions from shipping, and the International Maritime Organization could adopt global decarbonization rules at a meeting in October, which would make shipping the first industry to be governed by a global treaty that sets enforceable decarbonization standards.

The IMO deal would lead to a long-term transition to greener fuels and it could, coupled with other IMO regulations, lead to increased use of efficiency measures that reduce how much fuel vessels need in the first place. Such measures include everything from adding sails to ships to lubricating or redesigning hulls and optimizing routes or arrival times. These are cheaper and more immediately available than alternative fuels.

“Efficiency measures are the most important because ultimately the most important thing we can do is reduce energy consumption, full stop,” Madadh MacLaine, secretary-general of the Zero Emissions Ship Technology Association (ZESTAs), a trade association that advocates for decarbonization, told Mongabay. “And so that’s first — we can do that now.”

Many associations and companies, particularly in Europe, are working to make efficiency gains as fast as possible.

Measuring up on design

The most obvious efficiency measures deal with the design or retrofitting of ships. “Digital-first” design that embeds operational requirements from the start is crucial to efficiency, according to Mikko Kuosa, the CEO of NAPA Group, a Finland-based maritime software company.

“Ships are no longer simple fuel-and-cargo carriers; they are becoming multi-fuel, hybrid energy platforms loaded with new efficiency and safety technologies,” Kuosa told Mongabay in an emailed statement.

Much current design work is in wind power. OceanWings, a France-based firm, is among the companies that build sails that look like airplane wings and are based on their aerodynamics. These rigid wingsails have already been used on Canopée, a 121-meter (397-foot) cargo ship, for the past two years; at one point, the ship traveled at about 14 knots, or 16 miles per hour, with its engine off, just using the wind. (Wind power, though a form of energy, is generally lumped in with efficiency measures because it achieves the same ends: reducing the need for fuel.)

Another major wind assistance technology is rotor sails, which are tall, spinning cylinders that look nothing like traditional sails. Whereas the rigid wingsails produce lift, the rotor sails use rotation to generate a forward thrust. Both types of wind assistance can be used on newbuilds or retrofits.

In terms of decarbonization, wind power is “the single biggest single chunk you can do next to operational changes, simply because it can replace quite a lot of energy,” Felix Klann, a maritime transport policy officer at Transport & Environment, a Brussels-based advocacy group, told Mongabay.

Other design work takes place belowdecks. There are a number of hull-related efficiency measures, the most common of which is called a bulbous bow, which looks like a nose at the front of the hull. It reduces drag by canceling out the wave created by the front of the hull and can be added as a retrofit. A newer hull technology is called air lubrication. This involves coating the hull with a layer of air bubbles that reduce friction.

In fact, simply cleaning a ship’s hull reduces drag and fuel use. This is typically done by sending divers down with a “brush kart.” The method has drawbacks: It’s dangerous and polluting. The brushes, which are rough, remove not just the biofouling (algae, barnacles, bacteria, etc.) on the hull but also toxic compounds in antifouling paint, usually letting it all fall into the ocean.

A small Norway-based company, ECOsubsea, is trying to do it better. It has stations in northern Europe and Singapore that use underwater robots to clean hulls and capture debris. Most of the vessels it services save 5% or more on fuel costs, making back in a month what they paid for cleaning, according to Abigail Robinson, the company’s vice president for sustainability. The company, which aims to expand to every major port in the world, works on both cargo and other vessels such as cruise ships. It uses soft water jets designed not to remove antifouling paint.

Robinson told Mongabay that cleaning hulls was “low-hanging fruit” and there was more demand for ECOsubsea’s work, thanks to the IMO’s moves and to the fact that many ports are clamping down on the pollution caused by brush karts.

Operation: Efficiency

Many of the best efficiency measures don’t involve flashy designs or physical manipulations but rather operational changes, experts say. For example, D-ICE Engineering, a France-based firm founded in 2015, offers advanced navigation systems that it says can generally cut a conventional vessel’s emissions by up to 15-20% and those of a wind-assisted vessel by up to 40%. It works by optimizing fluid dynamics and route, accounting for weather, wind, current and other factors.

D-ICE’s system, which includes software and light hardware, has in fact been installed on the Canopée, where it works in conjunction with OceanWings’ sails, together providing a reported 30-35% reduction in fuel use; nearly half of that gain is from advanced navigation, according to D-ICE.

Emine El Hadj Amor, D-ICE’s chief marketing officer, said that it makes little sense not to use advanced navigation systems like the ones they offer. The company is working to build trust with shipowners and operators who are not yet “convinced,” he told Mongabay.

“We have demonstrated what we are able to do on very complex vessels,” he said.

D-ICE’s system incorporates autopilot speed control, and that’s no coincidence: Speed is a major operational lever for decarbonization.

Slow steaming, or reducing ship speed, is perhaps the most straightforward and advantageous efficiency measure, experts say. Avoiding fast speeds can reduce emissions substantially. For now, however, most vessels fail to take advantage of this; instead, they “sail fast then wait.” That is, they tend to speed across the ocean and anchor or loiter outside of a port until their turn to get in. Vessels spend 4-6% of their operating time — 15-22 days per year — waiting at anchor, according to a report published in December by University College London and UMAS, a U.K.-based consultancy.

Forty organizations have banded together to fight “sail fast then wait” using a voyage optimization system called Blue Visby Solution, which requires no capital expenditure and can reduce emissions up to 15%, according to Kuosa of NAPA, a founding partner in Blue Visby. Kuosa called “sail fast then wait” one of “shipping’s biggest inefficiencies.” Blue Visby aims toward “just-in-time arrival.”

The practice of “sail fast then wait” comes partly from the fact that the parties controlling vessels don’t have fully aligned economic incentives. That is, shipowners, operators and cargo owners — oftentimes, these are three different companies — have different agendas. Some contracts make it so the party paying for fuel isn’t choosing the route or schedule. Speed is normally paramount, and there can be contractual pressure to “arrive” at port by a certain date, even if there’s no open berth.

Economic and regulatory factors

In fact, the impact of such “split incentives” on decarbonization efforts goes beyond “sail fast then wait.” The party that pays for fuel isn’t always the one that decides on costly retrofits. While there are long-term price signals that could encourage alignment between owners and operators — a vessel is more valuable to all parties if it’s greener and costs are lower — the immediate payback for retrofits can be harder to see.

Klann of Transport & Environment said the split incentives problem was “not rooted in physics” and was “purely contractual” and could be overcome. More generally, he said market-driven efficiency improvements have “stalled” and “robust regulation” was required.

MacLaine of ZESTAs agreed, saying, “Until the regulation comes in, we’re not going to see any real changes.”

“Nobody’s doing this because they’re nice,” MacLaine added. “It’s all about the money.”

The October IMO meeting will focus on the adoption of a “net-zero framework,” which experts expect to come to a vote. The treaty would require vessels to reduce emissions intensity, with standards getting more stringent each year until at least 2040 and fines applied at different tiers. Its adoption would be the culmination of years of IMO work on “mid-term” measures and would indirectly reward the use of efficiency measures — less fuel use means fewer fines.

However, the IMO also has less-heralded short-term measures that more directly incentivize efficiency measures. The three main short-term measures regulate newbuild design, existing ship design and operational energy efficiency. These are already in place but are relatively weak, critics say. A review of the measures, which has thus far taken a back seat to the net-zero framework discussions, is scheduled to be completed by 2028. These short-term negotiations are highly technical and are dominated by industry actors, with only a few national delegations and NGOs involved, Klann said.

Banner image: The “pink panther,” operated by the company ECOsubsea, conducts a hull cleaning of vessel Frontier Kotobuki in Singapore. Image courtesy of ECOsubsea.

World’s first industry-wide climate mandate could be launched with shipping vote

Citation:

Rehmatulla, N., & Smith, T. (2020). The impact of split incentives on energy efficiency technology investments in maritime transport. Energy Policy, 147, 111721. doi:10.1016/j.enpol.2020.111721

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