In this report, OLUWAKEMI DAUDA looks at some of the problems that should be tackled by the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) to achieve deep decarbonisation of the industry.
For the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA), collaboration is key to achieving deep decarbonisation, stakeholders have said.
Shipping companies, the stakeholders said, need to reduce emissions, while driving growth and profitability. “Nigeria can’t wait to act. We must utilise solutions in the market that can make an immediate environmental and financial impact if we are to, as a maritime nation, to afford the transition to clean fuels,” the former President, Association of Nigerian Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu, said.
Decarbonisation, Shittu said, could be achieved through alternative fuels such as nuclear, hydrogen, ammonia, methanol and renewable energy sources (biofuels, wind, solar), the maturity of technologies (fuel cells, internal combustion engines) as well as technical and operational strategies to reduce fuel consumption for new ships (slow steaming, cleaning and coating, waste heat recovery, hull and propeller design.
Goals set by IMO on carbon intensity reduction
With the IMO adopted energy efficiency strategy on the reduction of Greenhouse Gas emissions from international shipping, the following goals have been set: Energy efficiency requirements or existing vessels from 2023; carbon intensity targets for vessels from 2026; reduction of carbon intensity by 40 per cent by 2030; and reduction of carbon intensity by 70 per cent by 2050 (50 per cent)
NPA and NIMASA, a lawyer Mr Oluwaseyi Muhammed, said, must come up with a strategy with the aim of providing support and assisting ship owners and operators “to achieve compliance with the new Efficiency Existing Ship Index (EEXI) Legislation, calculation of Carbon Intensity Indicator (CII) by investigating decarbonisation/efficiency technologies and operation changes for their vessels, ultimately, providing the best solution in terms reduction of EEXI & CII and return on investment (ROI)”.
Lessons from other countries
Few days ago, the French shipping giant CMA CGM Group and Maritime and Port Authority of Singapore (MPA) signed a memorandum of understanding (MoU) to collaborate on the development of capabilities and solutions across decarbonisation, digitalisation and innovation.
The MoU, findings have shown, seeks to explore the use of low carbon fuels and develop green technologies to accelerate maritime decarbonisation.
The partners are expected to work on the use of zero and low-carbon marine fuels such as e-methanol, e-methane and biofuels for commercial shipping. Research on technologies such as carbon capture solutions is another objective of the MOU.
As CMA CGM advances to be a net-zero carbon firm by 2050 diversifying its energy mix, the company ordered 10 dual-fuel liquefied natural gas-(LNG) powered vessels and six dual-fuel methanol-powered vessels. The methanol-powered newbuilds are planned to join the CMA CGM fleet in three years (2025).
Three of these LNG vessels, which will also be e-methane-ready, will be registered under the Singapore flag. The firm’s e-methane-ready fleet counts 29 vessels in service and will have 77 by 2026.
Moreover, the parties pledged to promote digitalisation and innovation in the maritime ecosystem for more efficient solutions.
Some of the areas on which the signatories will focus include cybersecurity and shipping, achieved through data exchanges for port and cargo documentation and reporting. The MoU would also see the two parties work together on innovations such as shipboard automation for more safety, efficiency and smarter solutions onboard vessels.
Furthermore, CMA CGM and MPA will explore establishing and investing in Singapore-based incubators and accelerators to grow Singapore-based marine tech startups.
Investigation has also shown that in line with its digitalisation agenda, CMA CGM has recently teamed up with PSA Corporation (PSA) to create and implement digital solutions relating to the company’s port and terminal handling activities in Singapore.
Under the MoU, will cooperate on new industry-wide initiatives to attract and empower the Singapore-based maritime workforce, tapping on the MPA Maritime Cluster Fund.
“Decarbonisation, digitalisation, and innovation are strategic priorities for CMA CGM and the entire shipping industry. Given Singapore’s key position in our global network, I am very pleased to sign this partnership with the Maritime and Port Authority. It will allow us to address the challenges ahead and strengthen our existing strong ties with Singapore,” Chairman/Chief Executive Officer, the CMA CGM Group, Rodolphe Saadé, reportedly said.
“We are happy to work with a like-minded partner like CMA CGM who shares our ambitions to make international shipping more sustainable and resilient,” Chief Executive, Maritime and Port Authority of Singapore, Quah Ley Hoon said.
The sector is crucial for international trade. About 90 per cent of the global trade occurs through shipping and that makes it vital to the world economy which Nigeria is a member.
Due to the scale of the sector, shipping represents three per cent of the total global greenhouse gas (GHG) emissions, therefore strict environmental regulations are set to cause major technological changes in the maritime industry.
For example, Liquefied Natural Gas (LNG) can improve the performance, and on the other hand, with methane slip, the benefits are reduced. Other fuels and/or other technologies such as biofuels, hydrogen, nuclear and carbon capture and storage (CCS) could all decarbonise the industry, but each have significant barriers regarding cost, resources and social acceptability.
In addition, fuel consumption can be improved by various efficiency improvements (such as hull design and cleaning, and propeller design, to name a few). It is obvious that numerous problems/issues must be tackled to achieve deep decarbonisation of the shipping industry.
Demand for shipping to grow
Moreover, demand for shipping is likely to grow over the next three decades. Investigation by The Nation has shown that to understand the market trends in the industry, NPA and NIMASA must consider decarbonisation as part of their business strategy in line with the International Maritime Organisation’s (IMO) ambition to reduce CO2 emissions by at least 50 per cent by 2050 compared with a 2008 baseline.
Financial incentives
Deep decarbonisation will require financial incentives and policies at the international regional and local level given the maritime sector’s three per cent contribution to GHG emissions.
Categories of maritime emission
Maritime emission and reduction measures are divided into two: technical (ship size, ship-port interface, etc.) and operational (lower-speeds, waste heat recovery, etc.)
The International Transport Forum recognises more routes to achieve decarbonisation, which is the use of alternative fuels (sustainable biofuels, hydrogen, ammonia), electrification of ships and wind assistance, albeit these could be argued to fall under the technical measures’ category.
Challenges
There has been increased interest from the sector’s important stakeholders on deep decarbonisation. However, this will require financial incentives and policies at an international and regional level given the maritime sector’s three per cent contribution to GHG emissions.
Shell and Deloitte, it was gathered, conducted a survey on the market trends and it was realised that the majority of the stakeholders considered decarbonisation an important or top priority for their organisations. This, therefore, shows that the market and the industry are considering decarbonisation as part of their business strategy.
What Maersk intends to do
Maersk, the world’s largest shipping container company, had announced its intentions to be net-zero carbon by 2050, with carbon-neutral vessels commercially viable by 2030.
The IMO has also introduced measures for new and existing ships (SEEMP, EEDI and the fairly recent EEXI), which combine operational and technical measures to help ship operators achieve reductions in emissions.
Advantages and disadvantages
The advantages and disadvantages of alternative fuels, in terms of cost, technical difficulties and maturity, were presented. Shell’s view on future pathways involves a “poly-fuel scenario”, in other words, the use of different fuels.
Also, Japan’s report on “Roadmap to Zero Emission from International Shipping” mentions that pilot concepts are based on two possible emission reduction pathways: LNG, provided that LNG transitions to carbon-recycled methane, and adoption of hydrogen/ammonia as fuel.
Although stakeholders who spoke with The Nation agreed that hydrogen/ammonia fuels are solutions to a deep decarbonisation, “There are still issues to be resolved for them to be a commercially viable solution. Issues of storage, transportation, safety, toxicity and cost are the prime inhibitors for these alternative fuels. LNG is a very promising solution to achieve short-term decarbonisation, with ships deploying LNG (mostly as a drop-in-fuel, blended with existing fuels in marine sector).
“Biofuels look marginally more competitive than fuels derived from renewable electricity or from natural gas with carbon capture and storage. However, biofuels have challenges in terms of sustainability and availability. Thus, in the mid -long-term, they may be uncompetitive due to sustainability restrictions and price volatility. Because fuel price is the dominant factor that determines the total cost of operation, a fuel derived from natural gas or from a renewable energy source “may offer longer term benefits” compared to biofuels if the future growth in energy global demand and the aforementioned sustainability and availability issues of biofuels are taken into account,” said, an analyst, Mr Kayode Balogun, said.
Other stakeholder agreed that IMO’s targets will be achieved through a radical shift with the aid of social pressure, financial incentives and regulatory and legislative reforms at the local, regional and international levels.