The containership Ever Given, which left Egyptian waters on 13 July, will not make its usual Hamburg port call “because of concerns surrounding navigation safety,” ship’s operator Evergreen revealed in a statement.

As informed, the cargo planned to be discharged in Hamburg will be unloaded in Rotterdam and transshipped to the destination port.

Evergreen noted that “the vessel follows the guidance outlined in its seaworthiness certificate to sail at lower speeds and to call only Rotterdam and Felixstowe.”

Furthermore, the company also announced that it is coordinating with the terminal operators regarding berth arrangements and will maintain close contact with them to ensure the containers can be discharged as soon as possible when the vessel arrives.

The 20,000 TEU containership has resumed its voyage to Rotterdam after receiving the official approval to depart the canal from the Suez Canal Authority (SCA).

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Ever Given to drop Hamburg port call due to “safety concerns”

The Port of Los Angeles hit a new volume record in June as U.S. businesses race to replenish stocks and build inventories for the back-to-school, Christmas and other holiday shopping seasons.

Total volume at the Port of Los Angeles hit 876,430 20-foot equivalent units (TEU) in June, up 27% versus the year earlier, port authorities said. Loaded imports accounted for more than half that, at 467,763 TEU.

The port sent 312,600 TEU of empty containers to factories in China and elsewhere. That far outstripped loaded exports of 96,067 TEU.

Inbound cargo at the Port of Los Angeles has been booming for months as U.S. businesses race to replace inventories depleted by demand from homebound consumers, who splurged on appliances, home exercise equipment and other goods.

The crush of pandemic-fueled demand has made it harder for trucks and trains to quickly whisk goods away from the busiest gateway by volume for U.S. trade with China.

Ocean shipping disruptions ranging from a ship stuck in the Suez Canal to the temporary closure of China’s busy Yantian Port have exacerbated delays and sent costs soaring.

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Italy on Tuesday banned cruise liners from Venice lagoon to defend its ecosystem and heritage, moving to end years of hesitation and putting the demands of residents and culture bodies above those of the tourist industry.

The government decided to act after the United Nations culture organization UNESCO threatened to put Italy on a blacklist for not banning liners from the World Heritage site, cabinet sources said.

The ban will take effect from Aug. 1, barring ships weighing more than 25,000 tonnes from the shallow Giudecca Canal that leads past Piazza San Marco, the city’s most famous landmark.

“I am proud of a commitment that had been honored,” Culture Minister Dario Franceschini said in a tweet announcing the cabinet’s approval of the decree, confirming a previous Reuters report.

The legislation, which is likely to affect the business of cruise companies such as Carnival Cruises, provides compensation for firms and workers involved, a culture ministry statement said.

Carnival cruises was not immediately available to comment.

Venice residents and the international community have been urging governments for years to ban large ships passing through the lagoon, polluting and threatening the stability of its buildings and fragile ecosystem.

Such concerns clash with the interests of port authorities and tourist operators who say the city needs the business offered by the cruise industry.

The 25,000-ton threshold will mean only small passenger ferries and goods vessels can use the Giudecca, excluding all cruise liners which typically weigh at least four times as much and can reach more than 200,000 tons.

Francesco Galietti, Italian director of the international cruise industry trade association CLIA, said the group welcomed an alternative route for cruise ships and he called the latest government move “a major step forward”.

No docking point
Rome has passed legislation numerous times in the past to limit liners’ access to one of the world’s most famous tourist sites, but an alternative docking point is not yet ready.

Residents protested in June when the 92,000 tonne MSC Orchestra sailed through the lagoon en route for Croatia and Greece, attracting the attention of international media.

In April, Prime Minister Mario Draghi’s government approved a decree to build a terminal outside the lagoon where passenger vessels over 40,000 tons and container ships can berth. The call for bids to build the terminal was published on June 29.

In the meantime, large boats were told to dock at the industrial port of Marghera, but this intermediate solution is not yet ready because Marghera lacks a suitable docking point for liners.

The government’s decree appoints a special commissioner to fast-track the docking station at Marghera.

Alessandro Santi, who heads Federagenti, a national shipping lobby, said the government was taking no account of the industry with an approach that was “regrettable and creates resentment”.

He accused Rome of listening to UNESCO and international culture lobbyists while ignoring local “citizens and business people”.

“Limiting the passage of ships won’t solve the difficulties of Venice as a city,” he said.

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U.S. Coast Guard said Thursday it had responded to a boat fire near Carlsbad, California in an incident in which the 50-foot boat eventually sank.

Coast Guard Sector San  Diego watchstanders received several reports of a boat, on fire approximately seven miles off the Carlsbad coast around 9 a.m. local time.

Coast Guard watchstanders dispatched an MH-60 Jayhawk helicopter crew and diverted the Coast Guard Cutters Munro, Benjamin Bottoms, and the  Haddock.

“While Coast Guard assets were en route, the Oceanside Harbor Master confirmed that the boat’s name was the Relentless. The Harbor Master saw the boat leave the Oceanside Harbor heading towards Carlsbad Thursday morning and stated that the owner lived aboard the boat and was presumed to have been alone,” U.S. Coast Guard said.

The Coast Guard cutters arrived on the scene and worked together to extinguish the boat fire while the Jayhawk helicopter crew searched for survivors. The boat sustained significant damage and eventually sank in approximately 1,800 feet of water.

“The Jayhawk crew conducted search patterns for more than six hours spanning over 600  square miles with no sightings of survivors. The three Coast Guard cutters are still searching,” the Coast Guard said.Coast Guard Cutter Benjamin Bottoms crewmembers work with Coast Guard Cutters Haddock and Munro to extinguish a vessel fire off the coast of San Diego, July 15, 2021. The vessel left the Oceanside harbor heading towards Carlsbad when it was seen on fire. (U.S. Coast Guard courtesy photo)

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Shipping will be included in Europe’s emissions trading system (ETS) and costs for polluters are set to rise under Brussels’ plans to meet the European Union’s climate targets, the European Commission said on Wednesday.

The EU ETS, which forces emitters to pay for each tonne of carbon dioxide they generate, is the keystone of an EU drive to cut net greenhouse gas emissions by 55% from 1990 levels by 2030.

Manufacturers, power firms and airlines operating flights inside Europe are already covered by the scheme but, under plans unveiled by the Commission on Wednesday, shipping would be phased into the ETS over a three-year period.

Emissions from sea voyages within the EU, plus 50% of ships’ emissions from international voyages starting or ending in the EU, would fall under the existing ETS, plus emissions that occur when ships are at berth in EU ports.

Emissions from road transport and from heating systems in buildings would need to comply with a separate ETS from 2026.

To ward off concerns that new levies could drive up costs for households, the Commission proposed that 25% of revenues generated from permit sales in the new ETS would go into a fund to shield low-income households from the carbon costs.

Polluters pay more
The EU now gives many free carbon permits to industries to help them compete with overseas firms that do not pay carbon costs.

Under the new proposals, likely to be opposed by many industries, this would be phased out for sectors covered by the EU’s planned carbon border tax on CO2 emissions embedded in imported goods such as steel and cement from 2026.

The EU will shrink the number of permits it gives to other industries from 2026.

Companies that have received free permits would be expected to pay for a steadily increasing portion of their emissions by buying permits, which have this year soared to record highs of more than 58 euros/tonne and now trade around 54.30 euros/tonne.

Airlines’ free CO2 permits would be phased out by 2027. Airlines currently receive most permits for free. Losing them will hike costs for carriers, which may mean higher ticket prices. The total number of permits in circulation will also be cut by almost 120 million allowances after the regulation enters into force. The number of permits entering the EU carbon market each year will decrease at a faster rate of 4.2%, compared with 2.2% today, following the one-off supply cut.

The proposal would strengthen the ETS “market stability reserve”, a mechanism designed to avoid a build-up of excess permits that could depress EU carbon prices.

When the ETS contains more than 1.096 billion spare permits, the reserve would absorb 24% per year until 2030. When there are 833 million to 1.096 billion permits in circulation, the reserve would absorb enough permits to bring that down to 833 million.

The measures are all likely to push up prices, with some analysts forecasting EU carbon prices will reach 90 euros a tonne by 2030.

All the reforms proposed by the Commission will have to be negotiated among member states and by the European Parliament, a process that could take roughly two years.

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https://www.marinelink.com/news/eu-add-shipping-carbon-trading-market-489170

In the United States, it is a frustrating time to be in the government shipbuilding business. Even though America depends upon maritime commerce and faces growing security risks at sea, shipbuilding is just not a major national focus.

Up to now, shipbuilders have had it pretty good. For the past several years, big naval shipbuilders have enjoyed steady growth and strong performance. In 2020, Huntington Ingalls Industries enjoyed record revenue of $9.4 billion, an 8.5% margin and gave a quarter billion back to shareholders in dividends and stock buybacks. But the party is ending.

With cuts coming and little “new” Navy funding expected from the Biden Administration, the near-term goal for surface ship builders and other out-of-favor segments of the naval shipbuilding industry is to simply survive, pursuing a dwindling set of shipbuilding opportunities while preserving as much of the Nation’s government shipbuilding industrial base as the government and company stockholders may allow.

Things, of course, will change. Once the Chinese maritime threat is too great to ignore, any cash used over these lean years to preserve government-oriented business systems, infrastructure and trained workers will, in time, be seen as a good investment as worried U.S. policymakers rush to quickly reconstitute and grow the depleted National Fleet.

But, in the near-term, substantial new investment in shipbuilding seems unlikely. For far too many financers, shipbuilding is a low-tech and low-margin endeavor, an almost passe pursuit. The national imagination is firmly fixed on the high-flying aerospace and space manufacturing industries that are hoovering up America’s intellectual capital, manufacturing workers and policymaker interest. But while the aerospace industry workforce grew by 4.8% and workers enjoyed wages 46% higher than the national average, few realize that even SpaceX depends upon the lowly maritime. The innovative space exploration company fields a small but innovative navy of some ten manned and unmanned ships and barges. SpaceX also intends to shortly field two offshore platforms as spaceports.

For American shipbuilders, it is a waiting game. As foreign competitors arm up and the Department of Defense flat-lines the Navy budget, positioning the U.S. Navy for potentially dramatic cuts, the only thing America’s government-oriented shipyards can do is dig in, perform on existing contracts, and wait—or agitate–for the prevailing winds to shift. Things will change—and may change in a hurry–but right now, the only real bright spots for government shipbuilders are in undersea and unmanned platforms, where the Pentagon senses opportunity.

The aircraft carrier USS Ronald Reagan and the guided missile cruiser USS Antietam steam in formation with Australian and Japanese ships during a trilateral security exercise in the Philippine Sea, July 21, 2020. U.S. Navy Photo by Navy Petty Officer 2nd Class Codie Soule

An Opportunity for Multinationals

For multinational naval shipbuilders that have U.S. operations, the picture is a little more optimistic. A big overseas naval buildup is driving foreign innovation at sea, and it may well be that the future of the U.S. Navy’s surface fleet will serve in partner navies long before the concept arrives on American shores. The U.S. Navy has a long history of adopting foreign designs, and with American military-industrial policy as strict as it is, many naval shipbuilders find it far easier to innovate overseas before bringing new surface ship designs to America. In all, the Polar Security Cutter, the Sentinel Class Fast Response Cutter, the Constellation Class Frigate, and both the Littoral Combat Ship classes are—or will be–American derivations of foreign designs.

Aside from America’s military industrial policies, America’s dominant naval strategy is also pushing maritime innovation overseas. Despite all the discussion about America confronting the big new challenges at sea with a newer, bigger and more lethal fleet, America has been easing into a far more collaborative, multilateral stance at sea, encouraging friends and allies to build out their own naval forces. As this shift in emphasis continues, America’s government shipbuilding market will continue to offer real opportunities for Fincantieri, Damen Shipyards Group, or other diversified members of the maritime industrial base that can continue leveraging the global naval buildup, bringing in revenue while advancing new designs and manufacturing innovations.

China and Russia are not the only drivers here. The Department of Defense’s prevailing operational template for the maritime is actually pretty dated, and has, for the past fifteen years, been riffing off the “1000-Ship Navy” strategy proposed by then Chief of Naval Operations, Admiral Mike Mullen. Since about 2005-6, the dominant message the U.S. has expressed in the maritime has been that the U.S. is unable to do it all. As such, America has inexorably shifted, year after year, towards a more collaborative international maritime security framework, encouraging countries to build up their naval forces.
Ingalls Shipbuilding successfully completed acceptance trials for the U.S. Coast Guard’s ninth National Security Cutter, Stone (WMSL 758). Photo by Lance Davis/HII

While American naval shipbuilders may not like it, the multilateral load-sharing strategy is, by and large, working. While the U.S. Navy rejected the “1000-Ship Navy”, the U.S. Coast Guard embraced international collaboration. America’s underfunded and overtaxed maritime law enforcers focused on really working with partners, making significant investments in communications and coordination capabilities. Today, as more and more countries build up their maritime capabilities, those partners are getting to the point where their vessels, if cued to a target by the U.S. Coast Guard, can manage vessel interdictions on their own. The stats are impressive; the Coast Guard Commandant, Admiral Karl Schultz, suggested that, in 2020, 50-60 percent of narcotics interdictions now involve some contribution from partner nations, and that a partner nation handles the interdiction “end game” somewhere between 20-40 percent of the time.The idea, of course, is that as other countries develop their own shipbuilding capabilities, those countries would then assume responsibility for larger portions of the maritime security portfolio, freeing the United States to focus on developing intelligence, surveillance and reconnaissance platforms, coordination-oriented assets and tools for heavy strike.

The consequence for America’s waterfront is that multi-national shipbuilders will continue to improve their competitive posture in smaller, “lower-end” frigates, patrol boats and auxiliaries, while the “higher-end” vessel designs and intellectual property developed in exclusively American shipyards will remain largely locked into the tepid American defense market, trapped by tough defense marketing rules.

The failure to develop and then internationally market America’s dominant large surface combatants has been, in retrospect, a tremendous oversight. Seeing the Freedom class Littoral Combat Ship in foreign service is wonderful, but it might have been more strategically useful to have America’s 69-hull Arleigh Burke Destroyer fleet joined by near-identical variants built to serve in Greece, Saudi Arabia, India and beyond. Today, rather than vend U.S.-built combatants as complete, largely U.S.-sourced platforms, individual companies are stripping off the higher-margin and more easily marketed warfighting-oriented vessel subsystems and selling them off, piecemeal.

Aerial view of HII’s Ingalls Shipbuilding division in Pascagoula, Mississippi, taken in June 2017. Ingalls is the only U.S. shipyard currently building four classes of military ships: amphibious assault ships (LHAs), amphibious transport docks (LPDs), guided missile destroyers (DDGs) and National Security Cutters (NSCs). Photo by Lance Davis/HII

America’s Near-Term Shipbuilding Future:

The U.S. Navy’s Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels For Fiscal Year 2022 paints out a template for a more collaborative future at sea. Submarines and un-crewed assets are receiving the lion’s share of the Navy’s planned investment profile. With the Columbia Class ballistic missile submarine fleet expected to be fully built out to 12 boats, and the attack submarine fleet expected to maintain a level of 66 to 72 submarines over the next thirty years, the future for crewed undersea craft is relatively bright—and may get even brighter if additional mother-ship oriented derivations of the commodious Columbia Class submarine move forward.

Outside of crewed undersea platforms, the biggest potential area of growth for government shipbuilders comes from un-crewed surface and undersea vessels, with Navy planners suggesting that, in thirty years, the fleet will maintain between 77 and 140 un-crewed craft.
While there are signs of technological overreach, with the Large Unmanned Surface Vessel program facing a delay as key enabling technology matures, the push towards unmanned platforms is real, substantive, and offers enormous opportunities to the right shipbuilders. With the Navy moving fast, major defense contractors will continue to jockey for any edge in obtaining mature and secure guidance and control solutions. As Huntington Ingalls Industries’ recently announced $1.65 billion takeover of Alion Science and Technology suggests, the technical side of the unmanned vessel equation is such a hot field that almost any company able to offer unmanned ship system management solutions can anticipate becoming a target for a merger or acquisition.

Other areas of potential growth are in subsystems, in sensors, cyber defenses, and communications. Over half the contract value for the Constellation Class Frigate will be in various subsystems, and, as shipbuilding companies chase the opportunities in high-margin subsystems, it will be a challenge for shipbuilding companies to “keep their eye on the ball” and not get overwhelmed. The Lockheed Martin Corporation’s long-suffering experiences with shipbuilding offer an apt cautionary tale, and Huntington Ingalls Industries’ explosion out of Northrop Grumman in 2011 present an example of how high tech can distract from the fundamentals of ship manufacturing.

This isn’t to say that American shipbuilders must forgo technology. The demand for high energy generation, energy storage and the “all-electric ship” are going to be vital future naval requirements. Accommodations for hypersonic weaponry, nuclear fallout protection and defenses against “soft kill” oriented weapons offer worthy challenges for any future naval shipbuilder.

There is a lot to do. Shipbuilders who want to explore opportunities in un-crewed ships should already be building a solid book of evidence that their favored hull, mechanical and electrical solutions are robust enough to operate without humans in the loop. It may also be smart for shipbuilders to start scrubbing their supplier list for those components that can demonstrate operational robustness in an unmanned scenario. For now, un-crewed platforms will not be a field where the “lowest-price-technologically-acceptable” subsystem is the optimum pick.

Outside of undersea and un-crewed platforms, the immediate prospects for “traditional” government surface vessels seems bleak. With a dwindling maritime community and few advocates outside of America’s already small maritime law enforcement community, the Navy is preparing to cut the surface fleet down to about 100 combatants. The traditional big-ship Cold War-era amphibious fleet seems set to devolve into several small squadrons of rebooted World War II-era Tank Landing Ships (LSTs). Logistics and support vessels, ignored in the best of times, will continue to struggle, particularly as the handoff of these vessels to the civilian mariners of the Military Sealift Command significantly cut naval interest in recapitalizing the support and logistics fleet.

The Future U.S. Navy Is Tied To China’s Choices:

Of course, the Navy’s overarching strategic template and focused force reductions could all go sideways in the space of a few months. China, developing a maritime force capable of seizing and holding large portions of otherwise open sea, seems eager to provoke a fight with a weaker neighbor in the near-term. A real sea fight between rival ocean nations, coupled with regular Chinese excursions into U.S. maritime territory or zones of U.S. interest, all have the potential of sparking a national panic and instigating an unprecedented U.S. naval buildup.

Should China avoid war while continuing to employ their vast national fleet in a controlled but provocative fashion, American shipbuilders can expect rising demand for coastal defense, patrol and other presence-oriented tools necessary for maintaining positive control of America’s vast, 4.3 million square mile Exclusive Economic Zone. The Coast Guard’s 25-ship Heritage class Offshore Patrol Cutter and 64-hull Sentinel class Fast Response Cutter program offer a good start, but more investment will be needed. By and large, new patrol-oriented vessels will primarily engage grey zone intruders via small-boat boarding teams, but they may also require the longer-term flexibility to accept sensors, missiles and other tools necessary to support antisubmarine warfare or other higher-end warfighting requirements.

As China continues to explore the Arctic, Antarctica and consider other opportunities to either seize unclaimed global real-estate or take lightly-held areas, high latitude operations will continue to grow in importance. Unless America can help like-minded partners muster sufficient numbers of battle-ready polar-ready icebreakers, logistic ships and Coast Guard vessels, the vast Antarctic continent risks becoming China’s next target for territorial expansion.

As China increasingly blurs the distinction between civilian and military craft, America and other like-minded countries may start doing the same, adding significant military capability to relatively hidden civilian craft. Hiding the fleet is smart, but, should more of America’s naval investments disappear into some “black budget” line item someplace, it will be increasingly difficult for policymakers to explain America’s maritime security strategy, complicating efforts to build national interest in advancing American national security. Conversely, should the vast fleet of Chinese and Hong Kong-flagged merchant vessels suddenly become seen as security threats, America will be hard-pressed to quickly reconstitute the trusted, U.S. flagged merchant marine needed to keep America’s economy afloat.

Rig For A Long-Term Boom:

Despite all the present-day pessimism, America stands on the precipice of a large naval buildup.
With the seas more crowded and contested than ever before, it is only a matter of time before a modern maritime conflict breaks out and a hesitant America starts getting deadly serious about maritime security. Today, the challenge for America’s government shipbuilders is to preserve and marshal as much industrial capability as possible while also working to help guide America’s strategic choices at sea, helping the United States prepare for a far more contentious maritime future.

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The International Chamber of Shipping (ICS) has released a statement following the European Commission’s proposed extension of the EU’s Emissions Trading System (ETS) to cover the international shipping sector.

Guy Platten, secretary general of ICS, commented:

“Other than as an ideological revenue raising exercise, which will greatly upset the EU’s trading partners, it’s difficult to see what extending the EU ETS to shipping will achieve towards reducing CO2, particularly as the proposal only covers about 7.5% of shipping’s global emissions. This could seriously put back climate negotiations for the remaining 92.5% of shipping emissions.”

“We know that non-EU States like Japan have already expressed concern over this diplomatic overreach and imposition of a unilateral and extra-territorial tax on trade. It cannot be equitable for non-EU shipping companies to be forced to pay billions of euros to support EU economic recovery plans, particularly under a scheme that undermines CO2 negotiations.”

“It is clear from how such schemes work in other sectors that there will be unintended consequences from the imposition of such a proposal. There are simpler and more effective options – such as a global fuel levy – but these require political leadership rather than political expediency. Another key issue for ICS is that who pays for the cost of fuel should be the same person that ultimately pays the cost of carbon allowances.

“The failure to include investment in research and development in the proposals, at a time when the IEA and the new US administration are highlighting that emission reduction will only be possible with the development of technologies that do not currently exist, is disappointing. To indicate one thing at the beginning of the process and then to withdraw it to pay for a post covid recovery sends a clear message to industry that the EU is not truly serious about decarbonising global shipping. This also sends a message beyond shipping that political and investment risk is high in Europe. This only goes to show why we need the 5 billion USD IMO Maritime Research Fund.

“Volatility in the price of allowances makes this approach far more complicated to pass on the cost to the company that pays for the fuel, especially for the majority of smaller shipping companies which make up the majority of shipping. This proposal is overly bureaucratic. The industry’s overwhelming preference is for a global levy which will incentivise real emission reductions rather than red tape.

“It is clear that there will need to be an independent impact assessment of these proposals as soon as possible, to ensure that we are not sleepwalking towards unmanageable costs for global trade.

“ICS will along with industry partners will be reviewing the latest draft proposals in detail and will continue to highlight these concerns in discussions with the EU Council and the European Parliament. We need urgent action but action must result in decarbonisation rather than a pure money grab.”
Source: ICS

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https://www.hellenicshippingnews.com/ics-reaction-to-eu-ets-shipping-extension/

The technology group Wärtsilä continues to lead the ongoing transformation of the energy and marine sectors towards carbon-free solutions through its future fuel development work. The company is pioneering the adoption of hydrogen and ammonia as viable engine fuels through advanced testing in Wärtsilä’s fuel-flexible combustion engines.

Hydrogen and ammonia contain no carbon, meaning the combustion releases no CO2 emissions.Full-scale engine tests have been recently carried out in Wärtsilä’s engine laboratory in Vaasa, Finland, to assess the optimum engine parameters for running on these fuels. The test results are very encouraging, with one test engine performing very well when running on a fuel with 70% ammonia content at a typical marine load range.Tests were also completed successfully on another engine in pure hydrogen operation.

Testing will continue throughout the coming years with the aim of defining the most feasible internal combustion engine-based solutions for power plant and marine applications, thereby enabling the transition to a decarbonised future with green fuels.

For the energy market, Wärtsilä expects to have an engine and plant concept for pure hydrogen operation ready by 2025. For the marine market, the company expects to have an engine running on an ammonia blend already this year. Wärtsilä anticipates having an engine concept with pure ammonia fuel in 2023. In the energy sector, it is anticipated that green hydrogen will deliver 7 percent of the global energy demand by 2050.

Håkan Agnevall, CEO of Wärtsilä said: “These are milestone moments in Wärtsilä’s transition to future fuels. Society will have to invest significant amounts into the infrastructure needed to develop green hydrogen, but those investments require market-ready engines that can run on the fuel once it is readily available. The energy and marine industries are on a decarbonisation journey, and the fuel flexibility of the engines powering these sectors is key to enable the transformation.”

Full-scale tests are being carried out by the Wärtsilä’s engine laboratory team in Vaasa to assess the optimum engine parameters for running on hydrogen and ammonia fuels. © Wärtsilä Corporation

Wärtsilä is also developing ammonia storage and supply systems as part of the EU’s ShipFC project. The company has already gained significant experience with ammonia from designing cargo handling systems for liquid petroleum gas carrier vessels, many of which are used to transport ammonia. In addition, Wärtsilä will begin testing ammonia in a marine four-stroke combustion engine together with customers Knutsen OAS, Repsol Norway and Equinor at the Sustainable Energy Catapult Centre in Stord, Norway, as part of the Demo2000 project.

Wärtsilä’s fuel agnostic approach enables the company to support the energy and marine sectors on how to shape sustainable, and efficient, future fuel strategies in several cost-optimal steps. For example, hydrogen can be used as a fuel in its existing state or as a raw material for producing a wide range of future fuels, including ammonia and synthetic methane, each of which has different benefits for industrial and mobility applications. Wärtsilä’s gas engines are highly flexible and are capable of rapidly ramping up or down in power. When wind and solar power vary with weather conditions, Wärtsilä engines can support the power system by ramping up power to meet the required load, reaching full capacity in under two minutes

The company’s engines can currently run on natural gas, biogas, synthetic methane or hydrogen blends of up to 25% hydrogen. Another important part of the way forward is that Wärtsilä engines will be capable of transitioning to future fuels, including pure hydrogen and ammonia, future-proofing customer assets.

“For electricity generation, the amount of renewables globally is growing rapidly, which is vital for being able to comply with the Paris Agreement. To achieve the transition to 100% renewable energy by the middle of the century, a significant amount of flexible balancing power is needed as a complement to ensure stable energy supply, when the sun is not shining or the wind is not blowing. There will be different balancing power technologies, but combustion engines and battery storage will be part of the core solutions. By developing engines that can run on green hydrogen, we are enabling that grid balancing can be done via a 100% renewable process, thereby enabling the energy systems of tomorrow,” added Håkan Agnevall.

“Wärtsilä is united in its aim of limiting climate change to below 2 degrees, and the development of engines capable of running on future fuels is crucial to that. The International Maritime Organization (IMO) has set a target to reduce total greenhouse gas emissions from shipping by 50 percent by 2050, compared to 2008 levels. In addition, a target has been set to reduce the carbon intensity of shipping by 40 percent by 2030, thus emphasising the need for the rapid introduction of existing and new smart technologies. Our successful engine testing will help us to consider a variety of future fuels and determine the optimum use case for each sustainable fuel,” commented Mikael Wideskog, Director of Sustainable Fuels and Decarbonisation at Wärtsilä Marine Power.
Source: Wärtsilä

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https://www.hellenicshippingnews.com/wartsila-launches-major-test-programme-towards-carbon-free-solutions-with-hydrogen-and-ammonia/

The ship recycling market has once again heated up, with ship owners financially incentivized more than ever to sell their older tonnage. In its latest weekly report, GMS (www.gmsinc.net), the world’s leading cash buyer of ships said that “Sub-continent markets continue to fire on during the summer / monsoon months, as firmer steel plate prices and an increasing lack of available tonnage has invariably pushed sub-continent offerings on to previously unthinkable levels. Not since the boom year of 2008 have we seen levels quite so high, and as the mythical USD 600/LDT draws ever closer, we will certainly see some fresh sales records being set from over the past decade. Notwithstanding, what comes up must eventually come down and many in the industry are now starting to fear that the markets may have peaked already and are now adjusting their levels in anticipation of some kind of an adjustment in the immediate future”.

Source: GMS

According to GMS, “to see levels DOUBLE over the course of just the last year alone, is quite an impressive and unexpected feat. The supply of tonnage has been increasingly centered around offshore units and tankers of late viz. smaller bunkering tankers, MRs, Aframax tankers, and even FSUs, along with a variety of offshore vessels – including MOPUs and drill ships. Due to the ongoing global Covid-19 restrictions, the expected summer slowdown has yet to really occur and most yards across the sub-continent recycling markets remain open and ready to accept vessels, as opposed to the slowdowns experienced during the seasonal retreat of yard laborers back to their hometowns over the summer / monsoon months. Similarly, shipowners and shipbrokers continue to do business at these fantastic numbers whenever they can, especially as freight markets also remain strong across the dry bulk and container sectors. Finally, global vaccine rates need to pick up, in order to combat the concerning spread of the Delta variant of the virus as well. And it will certainly be interesting to see how countries like the U.K., Israel, and the U.S.A. fare, now that restrictions are easing as vaccine rates hit the magic number in excess of 70% for herd immunity to take hold”, GMS concluded.

In a separate note, shipbroker Clarkson Platou Hellas said that “the feel-good factor has not just been felt here in England after the football teams heroics, but also across the strong buying appetite being felt across the sub-continental markets. Despite many predicting a fall, this is yet to materialise and with the lack of workable tonnage looking set to continue until at least the end of the year, demand should remain strong resulting in continued aggressive rates. Surely, it is only a matter of time for the much anticipated USD 600 per ldt level to be reached for a conventional ship which would be a remarkable recovery from this time last year where the market was in a depressed state due to the Covid restrictions in place. The Pakistani recyclers are making a sterling effort to compete with their counterparts in Bangladesh, however, are still a little short in their indications, whereas the Indian recyclers are still unable to mount any competitive levels”, the shipbroker said.

Source: Clarkson PLC

Allied Shipbroking added that “the robust activity in the ship recycling market resumed this past week, despite that fact that we are within the monsoon period and the fact that the market has almost completely dried up of dry bulk and containership demo candidates. The uninspiring freight scene on the side of tankers and on in other secondary sectors, in combination with the record highs in offered scrap prices have maintain the interest in the ship recycling industry vivid. Enquiries have started once again to ramp up in Bangladesh, with local scrapyards offering very attractive scrap prices, while several slots are again available.

Source: Allied Shipbroking

At the same time though the COVID-19 resurge has obliged the government to announce fresh lockdown measures, trimming appetite. Meanwhile, an improved picture is witnessed in India as of late, with interest for ship recycling having started to increase slowly but steadily. The domestic players are still behind competition on the pricing front, but interest from offshore and tanker owners seem to have revived. Finally, a strong market has been seen in Pakistan as well during the last few weeks, with Gadani scrapyards attracting owners due to robust fundamentals. Actual businesses may well have remained modest, but it is expected that more activity will be seen in the coming weeks”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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Decarbonization is now one of the most critical challenges for the maritime industry apart from the global pandemic COVID-19 and oversupply of ships. The pathway is already there and industry players are taking the necessary steps to reach the goal for the reduction of GHG emissions from shipping by at least 50 percent by 2050. Shipyards, engine manufacturers and energy companies are upgrading their operations and technologies to achieve commercially viable zero emission maritime transportation.

IMO concluded its 76th Marine Environment Protection Committee (MEPC) during 10-17 June with discussions focusing on actions to tackle climate change, including the adoption of short term measures to reduce carbon intensity of ships and on the more general way forward. This report summarizes the latest trends seen this year in the transition to a greener future for shipping. It also covers the concluding remarks of MEPC 76 and some statistical data on the to-date CO2 performance of the maritime industry.

CO2 Emissions from 2012 to 2018
According to the fourth IMO greenhouse gas study, total CO2 emissions grew by almost 10 percent from 2012 to 2018, accounting for 2.89 percent of total global anthropogenic emissions. The analysis confirms that while total emissions have grown, the carbon intensity of shipping improved between 2008 and 2018, both for international shipping and for the majority of ship types. On average, carbon intensity for international shipping was between 21 and 29 percent lower in 2018 than in 2008, the figures show.

According to research by the International Council on Clean Transportation, published November 2020, the proposed short-term measures to reduce carbon intensity fall into two categories: operational and technical. Ships will be required to address both areas starting in 2023 to help meet IMO’s minimum 2030 carbon intensity goal. Main engine power limitation (EPL), a semi-permanent, overridable limit on a ship’s maximum power, is believed to be the easiest way for older ships to meet Energy Efficiency Existing Ship Index (EEXI) requirements.

Chart 1: Total CO2 Emissions, Year 2020 per Load Area, for VLCC, Suezmax, Aframax, Panamax, MR Fleets. Signal Ocean Platform data.

Decarbonization solutions: The role of data in call for action
Solutions to reach decarbonization exist and will continue being developed. Data plays a significant role in increasing transparency and pushing for prompt actions. It won’t just be IMO deadlines set on a future date anymore. Satellites, remote sensing technologies, and artificial intelligence will monitor worldwide greenhouse gas emissions in real-time and pinpoint them to specific sources: individual ports, ships, services, and businesses. Such authentic and unprecedentedly detailed emissions data will tighten regulations and shed new light on ESG integration and investing.

Data monitoring is essential for all players, owners and charterers alike, to assess emissions historically and identify load / discharge areas with the highest and lowest CO2 emissions levels per vessel segment. With this method, shipping players can optimize fleet deployment and immediately address short term factors, such as slow steaming and triangulation. By optimally selecting ships for cargoes the industry can, starting today, achieve a direct reduction in the CO2 emissions of shipping. Digital transformation in commercial shipping is now crucial to facilitate decisions that balance profitability with environmental footprint.

Chart 2&3:Average Triangulation Time and CO2 emissions per vessel class. Signal Ocean Platform data.

CO2 emissions monitoring with the Signal Ocean platform
In December 2020,a new tool in the Signal Ocean Platform was launched covering the tanker and dry bulk segments. Industry participants are now able to consider the CO2 impact when chartering ships alongside their Time Charter Equivalent (TCE) rates. Key influencing factors include not only the emissions during the laden sea passage of a voyage, but also ballasting, route deviations and other operations, all in conjunction with technical ship characteristics, age, shipyard/design, use of scrubbers and type of fuel used.

The Signal Ocean Platform estimates CO2 emissions from AIS data converted into voyages, where all stops for bunkering operations, idle times, repairs, loads and discharge operations have been taken into account. At sea, ballast and laden legs and SECA navigation times are clearly defined. Models that estimate consumptions for each distinct operation have included vessel particulars including country built, year built, scrubber fitting, operational conditions and vessel speeds. Fuel consumption is mapped to different types (VLSFO, MGO, HSFO) based on the area that vessels have been trading as well as the information about if a vessel is scrubber fitted or not and emissions are derived from consumptions using IMO references.

Statistics data on wet CO2 emissions reduction
The below geographical distribution (Chart 1), using The Signal Ocean Platform data, demonstrates the level of CO2 maritime emissions for the year 2020, million tons per load area, for VLCC, Suezmax, Aframax fleets compared to Panamax and MR fleets. The same dataset can be used to aggregate information by segment, route or industry player (charterer or commercial operator), as a useful proxy to their comparative environmental performance. Such perspectives can enable participants to track and adjust their operational practices and decision making as they look to achieve the interim 2030 IMO objectives.

Chart 4: Speed report per vessel class. Signal Ocean Platform data.

Triangulation is key
While we often consider the laden leg when we are thinking about CO2 emissions and the impact on the environment, the ballast leg has almost the same impact. Optimizing ballast legs has a different order of magnitude impact compared to Engine types, Age or Fuel. Of course there are trading routes that allow for higher levels of triangulation, therefore a reduction of emissions, and others that don’t. Typically the smaller the vessel-class, the higher the average triangulation and lower level of emissions. The below charts 2&3 with The Signal Ocean Platform data demonstrate the average triangulation time per vessel class and the level of shipping emissions. In Chart 3, we normalized CO2 emissions per ton mile to compare the average triangulation time and CO2 emissions between large and smaller ship sizes.

The figures for year 2020 indicate highest average triangulation time for MR2: 59% and MR1:57% (chart 2), however, taking into account cargo quantity transported and the number of voyages per vessel size, normalized CO2 per ton mile (chart 3) appear the lowest for MR2s and Aframaxes.

The impact of vessel speed on the reduction of CO2 emissions
The industry is used to adjusting the speed based on market conditions as shown at the chart 4 below. The commercial decision of vessel speed follows the volatility of the spot freight market and market expectations for future earnings. It is worth noting that establishing slow steaming could have a significant impact on the overall CO2 emissions. With The Signal Ocean Platform, users can navigate and monitor cases of CO2 savings in the ballast and laden leg of voyages adjusting vessel speed. We can say that with a 1 knot reduction in vessel speed in the laden leg, there is potential to save around 2 millions tons of CO2 on a yearly basis for tankers, however this can fluctuate with market conditions and is strongly influenced by the decisions of commercial operators as they navigate the challenges of supply and demand.

The steps for lower CO2 emissions transition
The establishment of alliances for zero emissions is a milestone for the industry and contributes to the development of green shipping. One of the most powerful alliances is the “Getting to Zero Coalition” . The coalition builds on the Call to Action in Support of Decarbonization launched in October 2018 and signed by more than 70 leaders from across the maritime industry, financial institutions and other stakeholders, as well as on the Poseidon Principles.

In June, the governments of Denmark, Norway and the United States, along with the Global Maritime Forum and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping announced that they will lead a new Zero-Emission Shipping Mission as part of Mission Innovation. The target scope is to accelerate international public-private collaboration to scale and deploy new green maritime solutions, setting international shipping on an ambitious zero emission pathway. The mission will also be supported by the governments of India, Morocco, the U.K., Singapore, France, Ghana, and South Korea.

The international advisory panel on maritime decarbonization
Apart from the existence of above alliances for the transition to green friendly decisions, Singapore has emerged with a significant presence to smooth the procedure towards 2050.

The International Advisory Panel on Maritime Decarbonisation (IAP) formed in July 2020 by the Singapore Maritime Foundation (SMF), with the support of the Maritime and Port Authority of Singapore (MPA), has identified nine pathways for decarbonisation, including policy options to accelerate the transition and ways in which Maritime Singapore can support the industry’s decarbonisation. To achieve this vision, the IAP has recommended focusing on four strategic objectives: (1) harmonise standards; (2) implement new solutions; (3) finance projects; and (4) collaborate with partners.

IMO MEPC 76 concluding remarks
The MEPC 76 adopted amendments to the international Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to reduce their greenhouse gas emissions. These amendments combine technical and operational approaches to improve the energy efficiency of ships, also providing important building blocks for future GHG reduction measures.

The new measures will require all ships to calculate their EEXI and establish their annual operational carbon intensity indicator (CII) and CII rating. Carbon intensity links the GHG emissions to the amount of cargo carried over distance travelled. Ships will get a rating of their energy efficiency (A,B,C,D,E – where A is the best). A ship rated D or E for three consecutive years is required to submit a corrective action plan to show how the required index would be achieved.

The amendments of MARPOL Annex VI are expected to enter into force on 1 November 2022, with:

The Energy Efficiency Existing Ship Index (EEXI), applicable from the first annual, intermediate or renewal IAPP survey after 1 January 2023
The operational Carbon Intensity Indicator (CII) rating scheme, taking effect from 1 January 2023
A review clause requires the IMO to review the effectiveness of the implementation of the CII and EEXI requirements, by 1 January 2026 at the latest, and, if necessary, develop and adopt further amendments.

Reduced fuel consumption and Emissions: The enhanced Ship Energy Efficiency Management Plan (SEEMP) stipulates that an approved SEEMP will need to be kept onboard from the 1st of January 2023. The IMO’s SEEMP (Ship Energy Efficiency Management Plan) guidelines suggest a variety of options to improve fuel efficiency – from speed optimisation, optimised weather routing to timely hull maintenance, engine load efficiency.

Decarbonization fund
Recognizing the R&D gap, the industry has proposed to the IMO a new, industry funded, research and development effort. The International Maritime Research and Development Board (IMRB) is a USD 5 billion program, governed by the IMO, to coordinate and fund applied R&D and prototype development to catalyse the introduction of zero-carbon fuels and technologies in the maritime sector. Studies show that this dramatic increase in funding would enable the development of commercially viable low-carbon/no-carbon ships by the early 2030s. Ten IMO Member States are currently co-sponsors of the IMRB proposal. ICS, which represents 80% of the world’s merchant fleet, has highlighted that growing uncertainty is leading to a reduction in confidence about R&D investment.

Carbon tax: A priority for the maritime industry
Several trade groups, representing more than 90% of the world’s merchant fleet, have submitted a proposal to shipping’s United Nations regulator calling for it to prioritize a carbon tax for the industry. There is a call from Maersk for a CO2 tax on marine fuels of at least $150/t, which would almost double the cost of VLSFO, while Trafigura has asked even higher at $250-$300/t. There is also a call for a $100/t a carbon dioxide tax by 2025, ratcheting up every five years, from the Marshall Islands and Solomon Islands. The discussion will resume at the Committee’s next session.

The roadmap to ‘’zero carbon bunker fuels”
Shipping’s fuel of the future must produce lower or zero emissions and also have enough power to support the voyages of large sized ships around the world. The fuel type must be storable, transportable and affordable. Shipowners are now weighing the pros and cons among ammonia, hydrogen, LNG, biofuels, methanol and nuclear.

The World Bank published in April the first report ‘’The Potential of Zero-Carbon Bunker Fuels in Developing Countries” and identified two alternative fuels, ammonia and hydrogen as the most promising for zero carbon bunker fuels for shipping. The second report, “The Role of LNG in the Transition Toward Low-and Zero-Carbon Shipping”, identifies that LNG will play a limited role in the decarbonization process, emphasizing its specific niche applications on pre-existing routes or in specific vessel types. The reports evaluate that by transitioning to zero carbon shipping many developing and developed countries, especially those with large renewable energy resources, can break into a future zero carbon fuel market. The report illustrated some present initial case studies for Brazil, India, Mauritius and Malaysia.

The World Bank underlines that zero carbon fuels will need to represent at least five percent of the bunker fuel mix by 2030 to put shipping on a GHG trajectory consistent with the Initial IMO GHG Strategy, as well as the Paris Agreement’s temperature goal.

The challenge for 2030 and 2050 milestones
The maritime industry faces an unprecedented challenge in complying with the IMO’s targets for decarbonization even before 2030 and 2050 as owners and charterers need to demonstrate that the vessels they buy and operate are high performers and that less efficient ships are subject to performance improvements. Shipyards too, will need to prioritise higher efficiency vessels and may have to improve their standard designs to achieve the minimum acceptable Carbon Intensity Indicator (CII) levels. The main focus so far has been on the impact of the Energy Efficiency Existing Ship Index (EEXI), however, CII could have a dramatic impact on the marketability of vessels as it creates a market mechanism for charterers, financiers and regulators to grade the performers. There is already an urgent call of action from shipping to governments for the acceleration of decarbonization with a welcomed fund for a USD 5 billion R&D to be led by a new International Maritime Research and Development Board (IMRB), with many nations stepping up to support the proposal. The next decade will revamp the maritime industry and scale up all the necessary steps for the transition to “Green Future’’.

This CO2 shipping market report for the evolution of reducing GHG emissions was produced using insights, data and reports from the Signal Ocean platform and other trustworthy sources.

To find out more about The Signal Ocean platform and our CO2 tool, contact us here 
Source: The Signal Group, By Maria Bertzeletou (https://www.thesignalgroup.com/newsroom/maritime-decarbonization-reducing-co2-emissions-in-shipping)

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