Decarbonisation Technology - November 2023 Issue

AER

EEOI

Vessel based (g CO 2 /Dwt/nm)

Voyage based (g CO 2 /Dwt/nm)

Vessel based (g CO 2 /Dwt/nm) 13.16 (-23.1%) 12.33 (-27.9%) 11.67 (-31.8%) 17.10

Voyage based (g CO 2 /Dwt/nm) 12.19 (-19.6%) 11.30 (-25.5%) 10.70 (-29.4%) 15.16

2008 2012 2015 2018

8.08

7.40

7.06 (-12.7%) 6.64 (-17.8%) 6.31 (-22.0%)

6.61 (-10.7%) 6.15 (-16.9%) 5.84 (-21.0%)

Table 3 Estimates of carbon intensity as reported by the IMO Fourth GHG study with percentage improvement vs 2008

inventory methodologies discussed above. The results are summarised in Table 3 . CI has clearly improved quite substantially since 2008. It is interesting to note that the largest improvements apparently happened between 2008 and 2012. This was when the first energy efficiency measures were being discussed at IMO. From 2012 onwards, annual improvements appear to settle in the 1-2% per year range. The difference between vessel-based and voyage-based CI numbers is directionally consistent with the observed differences in total emissions estimates between the two methods. The difference between AER and EEOI numbers is striking. This undoubtedly reflects the effect of so-called ballast voyages, when ships travel empty between ports while pursuing new cargo, and partial load voyages. EEOI should be the preferred indicator, as it reflects actual transport work. However, using EEOI requires the collection of more data, including data that is sometimes seen as commercially sensitive. As a result, IMO’s recent energy efficiency regulations, such as the Carbon Intensity Indicator (CII), are based on AER. Regardless of which CI indicator is considered, the 2030 target of 40% improvement vs 2008 appears to be realistically achievable if the current annual improvement trend can be maintained. Coherence of 2030 targets Table 1 shows three distinct targets for 2030, raising the question of which is more ambitious. The target regarding the uptake of zero or near- zero GHG emissions technology is a subset of the CI target, as any use of such fuels will obviously lead to reduced CI. We will look at that in more detail later in this article. The absolute emissions target and CI are linked through the demand for shipping services. In case of a higher

demand for shipping services in 2030, CI will need to improve further to reach the same level of total emissions from international shipping. This relationship is illustrated in the waterfall charts of Figure 2 . Figure 2(a) illustrates the relationship for the 2018 voyage-based AER data shown in Table 3. The data imply that demand for shipping services has grown by 18% in the 2008-2018 period. With an estimated CI improvement of 21%, the resulting 2018 emissions are 6.8% below the 2008 emissions. Figure 2 Scenario 1 looks at what it would take to reach the 30% emission reduction, assuming that the CI target of 40% reduction is achieved. The graph shows that demand for shipping services would only be allowed to grow by 16.7% between 2008 and 2030. This means we would need to see a small reduction in demand between 2018 and 2030. Figure 2 Scenario 2 shows that demand can grow by 33.3% between 2008 and 2030 to reach the minimum emissions reduction target of 20% while achieving the CI reduction target of 40%. Figure 2 Scenario 3 shows what further reduction in CI would be needed to reach the more ambitious target of -30% emissions reduction in case demand grows by the same 33.3% as in Scenario 2. That would require a CI reduction of 46.7%, which implies a faster reduction than we have seen in the 2012-2018 period. This is where the introduction of near- zero carbon emission fuels may play a role. Pathway towards net zero Two elements must work together to guide the industry towards net-zero emissions: reducing the amount of energy needed to move ships as much as reasonably possible and introducing zero and near-zero GHG emission technologies.