Engine technology that allows fuel flexibility is critical for accelerating the shipping industry's decarbonization targets as the sector embraces a multifuel future to cut emissions, engineering company Wartsila Marine Power President and Executive VP Roger Holm said.
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"We have customers who are interested in building an LNG powered dual-fuel vessel that could burn LSFO [low sulfur fuel oil], or LNG today but also prepare for methanol conversion at a later stage," Holm told S&P Global Commodity Insights in an interview on the sidelines of the Singapore Maritime Week April 24-28.
Methanol conversion is not difficult on a newbuilding project. "Just requires a bit more space around the engines and some preparations for methanol tanks and then you have an insurance for an upgrade five or 10 years ahead. This flexibility is achieved only through engine technology," he said.
Decarbonization entails a combination of different factors, Holm said, and other crucial tools, such as route optimization, achieving just-in-time arrivals and slow steaming, also provide ways to trim fuel consumption costs and cut greenhouse gases emissions, along with scrubbers that capture CO2.
Wartsila has already sold its first carbon capture ready scrubber to a South Korean company.
While it is difficult to estimate the worldwide demand for carbon capture and storage technology, the global scrubber installed base provides an indication of the size of the market that could potentially go for carbon capture as the industry moves up the decarbonization curve, Holm said.
"Then it's coming back to what's the most optimal carbon reduction path in the carbon capture. This is not something that takes us [the industry] to 100% but it can take us a long way," Holm said.
According to S&P Global, scrubber technology is a key component in achieving International Maritime Organization's short-term measure to reduce carbon intensity of all ships by 40% by 2030, compared with 2008. "The current scrubber fleet is nearing 5,000 with an additional 385 vessels in the orderbook," S&P Global said earlier in April.
LNG, methanol bunkering
LNG is expected to dominate the bunkering landscape for many decades because it is a step up in the right direction, Holm said.
"The distribution and availability exist. So, Wartsila will continue its focus there," he said.
Over the last 25 years, Wartsila has reduced methane emissions from LNG as a marine fuel by about 75% and newer technology is being developed to reduce emissions further.
Methanol is already becoming the "new normal" marine fuel. "We have methanol experience since 2015 when we converted the Stena Germanica for Stena Line," Holm said.
"We have sold quite many products already with methanol engines, which are dual fuel," Holm said, adding that the engines can run on methanol and LSFO, offering fuel flexibility to shipowners.
Ammonia is also an emerging shipping fuel technology but that is slightly more complex than methanol.
"In the long run ... we know the technology will work. It is there but ... the industry has a lot of work to do ... something like what it did for LNG about 10 plus years ago. So, it is a natural development that must progress step by step," Holm said.
The company is also developing engines that use hydrogen as a fuel but those are more for land-based power plants currently. "I don't see hydrogen to, at this stage, play a big role in shipping," Holm said.
"Based on our methanol experience, we are confident that ethanol as a fuel will work as well. But we have not sold any engines for ethanol use so far," he said.
While a multifuel future beckons, the industry has been concerned about fuel availability and high prices.
"So, we are openly talking about what we are developing and when we are planning to come out with things so that our customers and fuel suppliers would know that because otherwise it takes too long to develop the supply of green fuels," he said.
Need for global regulations
Shipping regulations, such as the IMO's Carbon Intensity Indicator and the European Union's Emissions Trading Scheme, are vital in making the price of green fuels come closer to conventional fuels, Holm said.
Other drivers include end-customers demanding greener fuels. "You get better competitiveness if you can be financially viable in a green environment," he said.
Efficient shipping requires global decarbonization targets to accelerate.
"The EU has been moving now because they think that the IMO has not been moving fast enough, which means that we start to have regional regulations which is never a good thing for shipping," he said.
While the IMO has been under pressure to accelerate its global decarbonization targets, Holm was unsure of how much progress the organization would make at its 80th Marine Environment Protection Committee in July.
"At the upcoming MEPC 80, I don't know if the well-to-wake approach in GHG accounting will be adopted because the challenge is how it is done and who is then responsible to make sure it's taken care of, " he said. "Although in everything we do, we need to look at it from end-to-end because that is the only thing that matters in decarbonization of shipping."