Major container lines ask IMO to study alternative fuels

Major container lines ask IMO to study alternative fuels

The goal of the proposed International Maritime Organization (IMO) research group would be to channel ideas and funding for a zero-carbon alternative shipping fuel. Photo credit: Shutterstock.com.

Correction: A previous version of this story indicated the research initiative would be led by the World Shipping Council (WSC).

The World Shipping Council (WSC) is asking the International Maritime Organization (IMO) to set up an international research board to direct and fund research and demonstration projects related to the development of next-generation marine fuels.

The burning of cleaner, low-carbon fossil fuels will help reduce the container shipping industry’s environmental impact in the short term, but they will not be enough to reach the IMO’s long-term target of zero global greenhouse gas (GHG) emissions, according to WSC President and CEO John Butler. WSC’s members control roughly 90 percent of global container shipping capacity. 

The goal of the proposed IMO research group will be to figure out which non-fossil fuels are the most commercially and economically viable and to help determine a pathway toward the widespread implementation of those fuels of the future.

Butler’s comments offer a sobering glimpse of what lies ahead for the container shipping industry as carriers are consumed with preparations to reduce emissions within the fossil fleet from Jan. 1, 2020, under the IMO’s low-sulfur fuel mandate.

Costly fuel switch

The requirement for global shipping to cap the sulfur content of its fuel from the current 3.5 percent to 0.5 percent is proving to be a massive undertaking. Carriers estimate using the more expensive fuel will add between $10 and $15 billion per year to the industry fuel bill, and while much of that will be passed on to shippers, there are also the cost of cleaning tanks, securing supplies in key ports, and fitting scrubbers on vessels that will continue to burn high-sulfur oil.

But as disruptive as the IMO 2020 mandate might be — not to mention the IMO 2050 target of halving carbon emissions from 2008 levels — Butler noted the ultimate goal of the IMO is to eliminate GHG emissions from the shipping sector.

“The goals set by the IMO are pretty ambitious already, including 50 percent absolute reduction by 2050, even as cargo continues to grow,” he told JOC.com. “But the resolution goes on to talk about phasing out fossil fuels and eliminating GHG emissions as early as possible.

“We have had tremendous gains over the last few years, but the fact of the matter is that as long as you are burning fossil fuels, you are generating GHG, and to get to a more ambitious reduction level, the industry will have to switch to an alternative other than fossil fuel.”

Focus of ideas

Butler, who will be making a keynote presentation at the JOC's Container Trade Europe conference in Hamburg on Sept. 18, said that while there is an understanding among industry stakeholders of the need for an alternative fuel, the problem is that a multitude of ideas and possibilities are being raised about what the future fuel base may look like. To determine what is actually possible will require a massive amount of engineering and research.

Butler said he expected to have a comprehensive proposal for the research and development group in time for the IMO’s Marine Environment Protection Committee (MEPC) 75 meeting in March 2020.

“It is an important piece of the puzzle because a lot of the short-term measures being discussed at the IMO are necessarily aimed at how to reduce GHG further within the context of a fossil fuel fleet,” he said.

“But there is only so much additional GHG that we can wring out of that model, so the discussion will continue on how to implement short- and medium-term measures. We have seen an increasing recognition that R&D [research and development] is going to be critical in solving this problem, and that is encouraging. We are now trying to take that recognition further and lay out a pathway on how to make it happen.”

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.