By R. Bruce Striegler
It’s been more than a decade in the making, but the new rule mandated by the International Maritime Organization (IMO), lowering sulphur emissions from fuels used by the international shipping industry, went into effect on January 1, 2020. The global maritime industry now must adapt to a new cap of 0.5 per cent sulphur content, down from the previous level of 3.5 per cent. Four emission control areas established in 2015, the Baltic Sea, North Sea, North American and United States /Caribbean Sea, already have stricter regulations, with sulphur oxide emissions in these zones limited to 0.1 per cent. More than 170 countries, including Canada, have signed on to the fuel change regulations.
Until recently, tens of thousands of ships sailing the world’s oceans burn more than three million barrels a day of a high sulphur fuel, but shipping lines must now replace that fuel with less polluting sources, or implement measures to remove sulphur compounds from exhaust stacks. Major environmental benefits of reducing marine fuel sulphur emissions include improved air quality, resulting in reduced respiratory health risk, and reductions in acid rain, resulting in a lower incidence of acidified water and soil. Options for shipowners consists of burning conventional bunker fuel, but using exhaust gas cleaning systems, known as scrubbers, or burning low sulphur fuel oil (LSFO). Scrubbers remove sulphur oxides from a ship’s exhaust stack, which allows it to continue using fuel with a higher sulphur content (HFO). Scrubbers, however, require significant additional capital expenditure, and delays for refitting. In addition, there are policy inconsistencies among flag states as to their approved use. As early as 2018, the Maritime and Port Authority of Singapore announced that it will not allow ships with open-loop scrubbers to discharge scrubber washwater in port after January 1, 2020. In order to remain compliant with IMO 2020 fuel sulphur limits, these vessels will have to burn more costly 0.5 per cent sulphur fuel when calling Singapore, just like ships that are not equipped with scrubbers. The discharge ban will have a lesser effect on ships fitted with hybrid scrubber systems, which can switch from open-loop to closed-loop mode and retain their wash residues on board. Singapore will offer a full range of services for shore reception of closed-loop scrubber residues.
The China Ministry of Transportation’s “2020 Global Fuel Oil Sulphur Limitation Order Implementation Plan” raises questions about what vessels using open-loop scrubbers are required to do with respect to the non-compliant fuel oil carried on-board for use when the scrubbers are in operation outside Chinese coastal waters. As of January 1, 2020, ships sailing in Chinese inland waterways are required to use fuel with less than 0.1 per cent sulphur content, while ships in the Hainan waters within emission control areas and other waters are required to use fuel with a maximum sulphur content of 0.5 per cent. Furthermore, ships are prohibited to discharge water from open-loop scrubbers in China emission control areas. International ships entering waters under the jurisdiction of China are prohibited to carry non-compliant fuel oil onboard.
In a late January interview with Britain’s Guardian newspaper, Kitack Lim, IMO’s Secretary General IMO said, “Member states, the shipping industry and fuel oil suppliers have been working for the past three years to prepare for this major change – I am confident that the benefits will soon be felt and that implementation will be smooth. This [is a] hugely important change which will have significant positive benefits for human health and the environment.”
Fuel oil for shipping has long been one of the dirtiest forms of fuel, made up mostly of highly viscous “bottom of the barrel” residual oil left over from the crude oil that could no longer be refined into higher value products. Ship engines have been designed to cope with such low-grade fuel, and the emissions they produce mostly happen far from land, making the accompanying pollution less visible and, for many decades, largely ignored by governments.
Industry concerns leading to implementation proved largely unfounded
In the lead-up to implementation, the regulations were the subject of enormous concern, both by shipping lines, as well as their customers. Predictions of vast disruptions of service due to lack of supplies of alternate fuels, as well as significantly higher costs to shippers and their customers were forecast. However, the high levels of concern did not translate into realty. Companies had begun to stockpile low sulphur fuels at strategic locations around the world in anticipation of the changes, and global crude prices softened in December and January helping ensure a smooth transition.
While IMO 2020 deals with the reduction of sulphur only, further rule changes to tackle carbon emissions will be coming. At the next IMO conference in London in late March and early April, countries will come under pressure to lay out a plan on cutting carbon from the sector, ahead of a major UN climate conference in Glasgow in November. IMO has a long term objective to reduce carbon from shipping by 2050 to 50 per cent of current consumption, but few concrete plans to achieve it.
Are there other options to replace high sulphur fuel?
Utilizing low-sulphur fuel oil (LSFO) is an option that can be implemented instantly for instant benefits: no time-consuming refits, no major capital expenditures, just higher operating costs, which carriers should be able to pass on to customers. All other options involve significant capital expenditures, technical challenges, and/or layout redesigns that take remove space previously reserved for revenue-generating cargo. In addition, some require global (or at least regional) availability of enabling infrastructure, which typically requires vast sums of capital. With marine fuel consumption representing some 3 per cent of global oil consumption, it is evident that vast new networks of global infrastructure would be required to make any of the options not based on utilizing LSFO or scrubbers truly viable options into the foreseeable future.
Liquefied natural gas (LNG) is a credible option as it is nearly sulphur-free and produces lower levels of nitrogen oxides (NOx) and particulate matter for reduced air pollution. Unfortunately, LNG is not readily available for marine use on a global scale at this time, and considerable technical and economic obstacles remain before widespread use could be contemplated.
Biofuels are also being explored as an alternative – one enterprising cruise company is using fish guts for its fuel – and there are high hopes for harnessing hydrogen fuels in the form of ammonia for ship engines. 125-year-old Hurtigruten AS, based in Norway, operates a fleet of 17 ships, and by 2021 aims to have converted at least six of its vessels to use biogas and large battery packs, capable of storing energy produced from renewable sources.
Battery power is also emerging as a promising technology for ocean-going transport, but building batteries powerful enough has been a problem to date. With advances in battery manufacturing, it is becoming possible to install batteries big enough to last a voyage. Hurtigruten is currently building three new hybrid-powered cruise ships in Norway, to be delivered in the next three years.
Lastly, speed reductions are another way carriers can achieve unit fuel consumption (and therefore unit exhaust emissions). Speed reductions appear to be a “no-brainer” solution that produces instant benefits. However, speed reductions increase travel times, which increase unit employee costs and unit capital costs, which impact profit margins negatively.
Ballard Power Systems research and development now include fuel cells for marine use
British Columbia’s Ballard Power is recognized as a world leader in zero-emission proton-exchange membrane (PEM) fuel cells technology. Ballard commercializes fuel cell engines for transportation applications, and fuel cell systems for portable and stationary products. Ballard is also commercializing electric drives for fuel cell and other electric vehicles, power conversion products, and natural gas and hydrogen generator sets. Since its inception in 1979, the company has persisted in the face of daunting technical and financial obstacles but refocused its orientation after having abandoned (at least temporarily) its vision of leading the charge to lead the global adoption of fuel cell technology as a replacement for the internal combustion engine. The technology was (and remains) ground-breaking, but high costs put a damper on commercial prospects.
Geoffrey Ballard, a dual U.S.-Canadian citizen, formed Ballard Research Inc. as a research and development firm to conduct work on high-energy lithium batteries. Interestingly, his father had worked on the Manhattan Project, which produced the atomic bomb during World War II. In an interview with Canadian Sailings for this story, Guy McAree, Ballard Power Systems Director of Investor Relations explains that “fuel cells are a zero-emission technology, from which you basically get electricity. The only by-products from a fuel cell are a little bit of heat and a little bit of water, and there are essentially no moving parts in a fuel cell. You feed the hydrogen in, along with oxygen and you get electricity. When you stack fuel cells together, you create a fuel cell stack, which is the heart of the products that Ballard manufactures.”
Mr. McAree notes that fuel cell stacks are the equivalent to an engine in the internal combustion world. “We use these modules to power vehicles, and what we’re focussed on are heavy and medium duty vehicles. They include transit buses, commercial trucks, trains and trams, and more recently, marine craft.” He adds that this development has only emerged in the last year or so. “There are some significant global trends happening, and with IMO 2020 regulations, there is a lot more emphasis on cleaner environmental activities within ports around the world. That has driven an enormous amount of interest in zero emission fuel cell technology.” McAree continues, saying that what’s happened over the past several years are a series of different purchase orders Ballard has received for demonstrations and trials of fuel cell systems for propulsion of different watercraft. Things like car and passenger ferries, or river push boats, he notes. “The modules we’re using in the marine segment are typically 100 kW power and up. Depending on the size of the craft, and its duty cycle, we may have to put anywhere from 100 up to 400 or 500 kW of fuel cell capacity to serve the purpose.” McAree says that most of the demand Ballard is seeing currently is coming from Europe. “Ferries in Norway and the UK, for example.”
European market shows promise for marine fuel cell deployment
In 2019, Ballard Power Systems Europe A/S, a subsidiary, established a Marine Center of Excellence dedicated to fuel cell marine applications at the Company’s facility in Hobro, Denmark. The Centre will design and manufacture heavy duty fuel cell modules to address zero-emission powertrain requirements for the marine industry. Mr. McAree says the Centre is to be commissioned towards the end of the first half of this year. Prior to this, Ballard announced its collaboration with ABB and other consortium partners in the Flagships Project to develop and launch a zero-emission river push boat, planned for deployment in France in 2021 to push river barges. Ballard is planning to deliver two of its next-generation 200 kW fuel cell modules in 2020, which will provide propulsion power for the vessel. “This was a very interesting conversation and was one of the first marine related transactions that we signed.” He explains that the plan was to work with ABB focusing on the cruise ship market. “The effort here was not to provide propulsion for large cruise ships,” he says, “but to develop a multi-megawatt shore power system, to power the hotel portion of the ship.”
Also in the fall of 2019, Ballard received a purchase order from Berlin-based BEHALA, a port and logistics specialist, to power the world’s first zero-emission push boat. Named Elektra, the nearly 20 meters long and 8.2 meters wide push boat will be used principally to transport goods between Berlin and Hamburg as well as on inner-city transport routes in Berlin. Elektra will be powered by three 100kW Ballard fuel cell modules, and is expected to be launched later this year. While the vessel is under construction, electricity and hydrogen infrastructure is planned to be installed in the vessel’s inland waterways operating area.
Through its European subsidiary, Ballard is participating in an ambitious venture called H2Ports. H2Ports is the first European project focused on testing heavy-duty port equipment powered by hydrogen fuel cells. “We are providing a fuel cell module that can be used to power a reach stacker – essentially, a forklift,” McAree explains. The project is an initiative of the Port of Valencia and its strategy of port-logistics decarbonization, which is aimed at acceleration of transitioning ports towards zero-emission operations.
The project will test and validate hydrogen technologies for port machinery in order to achieve solutions that produce zero local emissions, without affecting the performance and safety of port operations. Ballard will pilot three initiatives to test fuel cell power in real-world operating conditions at the Port and will power a reach stacker for loading/unloading and transporting containers, as well as a terminal tractor for ro-ro operations. In addition, it will provide a mobile hydrogen refuelling station. “The idea is to demonstrate a number of different applications of fuel cells that could provide part of the solution toward lower carbon-intensity operations at different ports around the world.”