Shipping, Pollution and Technology – Can a Dirty Sector Clean up?

Maritime transport accounts for 7% of global oil consumption, and the bunker oil used in the industry is heavily polluting due to its’ high Sulphur dioxide content. Following the example of other transportation sectors, the shipping industry is beginning to look for new solutions to reduce its contribution to climate change. Aggressive new regulations set by the International Maritime Organization (IMO) are prompting innovation across the industry and forcing shipping companies to clean up their operations. As of  1 January  2020, ships operating outside designated emissions control areas have to comply with a 0.50% m/m limit on Sulphur in fuel oil, reduced from the previous 3.50% limit. To comply, bunker suppliers are preparing storage infrastructure and barges to be ready for compliant fuels, such as very low Sulphur fuel oil (VLSFO) or diesel.

Some players are looking beyond the 2020 laws and preparing for a future with even more stringent regulations and an industry-wide push to significantly lower emissions. The IMO laid out a climate change strategy in 2018 that includes a goal to reduce GHG emissions by 50% in 2050 as compared to 2008, and to pursue efforts to entirely phase out emissions all together. In anticipation, some early movers are testing out new technologies to reduce emissions beyond what will be required in 2020. Most cargo ships have a lifespan of only 20-25 years. In order to meet 2050 goals, low-emissions vessels will need to be commercially viable in the coming decade.  Some companies are testing the use of sails, from traditional fabric sails to rotor sails, in an effort to harness the power of wind and either power vessels completely emissions-free or provide auxiliary propulsion.

Attractiveness

Sails are a proven technology offering access to an abundant power source – wind. Technology improvements have brought down the cost of power from renewable sources and new materials have allowed for the development of larger sails which can access more wind power. In addition, modern weather forecasts and computerized routing systems can optimize wind-driven routes. Most companies developing sail-powered systems for maritime shipping are still in testing and pilot phases, but further technology development and scale could help bring down costs and provide a solution for shippers to meet near-term and long-term regulations.

A recently concluded pilot project including Norsepower, Maersk Tankers, Energy Technologies Institute (ETI) and Shell International Trading and Shipping Company achieved aggregated fuel savings of 8.2%. The year-long project operated from 1 September 2018 to 1 September  2019 and involved installation of Norsepower’s Rotor Sails aboard the Maersk Pelican to deliver auxiliary wind propulsion. Retrofitting existing ships with sails offers a near-term solution to reduce emissions while maintaining the same timeframe of operations.

Although shipping costs for sail-powered ships are considerably higher than traditional ships, industry attitudes towards sustainability are shifting and merchants are becoming more willing to pay higher rates for zero-emission shipping. Consumers are also willing to pay more for goods that are sustainably transported, allowing retailers to share the cost. In addition, using rotor sails as an auxiliary power source can allow shippers to improve fuel efficiency without drastically increasing shipping fees.

Technology and Business Models

Solutions being developed range from pure sails development and manufacturing for use on existing ships, to integrated solutions that include proprietary ships and shipping services. In the near term, partnerships with existing shippers for technology integration will help sail developers scale and reach commercial viability. In the long term, further cost reductions will help sail propulsion become competitive with fossil-based fuels, especially when more stringent regulations take effect.

  • Norsepowers’ technology involves a next-generation version of Flettner Rotors and can reduce fuel consumption by an estimated 6.1%. The Rotor Sails are cylindrical columns that utilize pressure differences from wind flow to spin. Air flow accelerates on one side of the sail and decelerates on the opposite side when wind reaches the spinning sail, creating a lift force that propels the boat; this principle is known as the magnus effect. The technology is approximately ten times more efficient than traditional sails and is designed for auxiliary propulsion, allowing for the main engines to be throttled back in favorable wind conditions. Since the company’s launch in 2014, Norsepower’s Rotor Sails have been installed in three vessels. In addition, Norsepower recently signed a service cooperation agreement with Wartsila in which Wartsila can order service work from Norsepower and pursue and sell Norsepower Rotor Sail projects.
  • Ecoclipper is raising financing to fund the development of a sailing ship capable of carrying 500 cubic meters of goods. Acting as a fleet operator, the company hopes to finance 10 ships in the next 5 years and provide sail-powered shipping on global routes. The model would allow Ecoclipper to complete small shipments for even large companies, providing low-emission shipping where possible. The company is finding a growing market with importers and exporters that are looking to ship sustainably.
  • New Dawn Traders operates a network of sailing ships, called the Sail Cargo Alliance, and acts as a broker to coordinate deliveries powered completely by sails. This model gives visibility and access to the few transport providers that offer sail-powered shipping. It also encourages more companies to use these vessels, allowing providers to expand their fleets, bringing down costs through scale. The company partnered with Lush in July 2019 to complete a 100% sail-powered delivery from suppliers in Portugal to Poole, a town on the southeastern England coast.
  • Neoline is developing its own pilot ship -the NEOLINER – which features foldable sails and a hybrid auxiliary drive system that currently runs on low Sulphur marine gas but will eventually run on hydrogen and solar panels. The company plans to operate a transatlantic pilot route in 2021 that will save an estimated 80%-90% of bunker oil consumption without comprising service speed. Although the solution is not currently completely emissions-free, Neoline plans on continuing development to eventually provide zero-emission shipping.

Challenges for sail propulsion 

  • Most ports are no longer capable of accommodating traditional sailing vessels, limiting these ships to a small number of ports. Retrofitting existing ships with sail technology as well as designing sail-powered ships to work with all ports will help solve this challenge..
  • Technology development is still in early phases and sail propulsion is expensive. However, expanded adoption of the technology and further technological development will bring costs down. In addition, pollution regulations may eventually make zero-emission propulsion achieve price parity with traditional fuels.
  • Many current designs require a tradeoff between cargo space and sails, as the sails must be large enough to generate enough power for massive cargo ships.

Keep an eye on:

  • As consumers pressure companies to decarbonize shipping and emissions regulations tighten, the willingness to pay for cleaner, but more expensive, shipping will increase.
  • Although sails may not become the primary propulsion method for all ships, they will certainly be applicable for shorter routes and as auxiliary power. Increasing availability and industry acceptance of sail-powered ships will allow this technology to tackle the low-hanging fruit, or shorter routes and smaller shipment sizes.

Can Innovators Deliver a Cleaner, More Efficient Future?

  • What companies will change  transportation and energy?
 
  • What trends will shape the  future of our industries?
 
  • Where will the next big investments happen?