The Zero-Carbon Shipping

Shipping in the Arctic is an important element of socio-economic development and, in most cases, is the only way to import materials and component parts and export nished industrial products. As a result, industrial projects in the Arctic have a potentially high impact on the environment, not only directly at the project site but also along the entire Arctic shipping route. e International Maritime Organization (IMO) sets emission standards for acidic oxides (NOx, SOx) in shipping. In addition, there is an ongoing debate about regulating CO2 emissions, as well as so-called black carbon emissions, which are formed by incomplete combustion of fossil fuels, wood and other fuels. ese requirements apply in all regions of the world.

For the Arctic region, however, the risks of fuel spills are to be considered with utmost attention since their cleanup is obstructed by the harsh climatic conditions and the low density of spill-response facilities. For a long time, the regulatory mechanisms for shipping concerned only the quality of fuel and its sulphur content. At the same time, international and national emission control areas were identied, where more stringent requirements applied to fuels and emissions of acidic oxides.

For the Antarctic zone, a straightforward ban was introduced on use of residual fuels. It is expected that, from 2024, it will be introduced in the Arctic too, but it may be postponed until 2029 for certain types of ship. Recently, the impact of black carbon on the climate and global warming processes has been actively discussed. e most stringent requirements are set for emission control areas (ECAs). But there are no plans to establish an ECA in the Arctic seas. Instead, environmental safety will be ensured by controlling the types of fuel used by marine vessels. A ban on using residual fuels, including fuel oil and various heavy fuels (HFO), in shipping in this region is considered a priority. At the same time, there are no plans to ban transportation of oil and fuel oil in the Arctic since petroleum products provide for the supply of essential goods and serve as the basis for the energy supply to local Arctic communities.

Based on this, the ban on use of HFO will have a major impact not only on shipping and energy supply to consumers, but also on mining projects in the Russian Arctic. is is because, when exporting products, cargo ships cross the Arctic waters zone and, in the event of such a ban, they would need to transfer fully to using other types of fuel. e ban on use of HFO will certainly raise costs for maritime transport, which will reduce the people’s disposable income and increase costs for industrial enterprises. Yet, the ban could have a signicant positive impact on the state of the environment, the quality and life expectanc of the local population, and preservation of the traditional way of life of the indigenous population. At the same time, the environmental consequences of using alternative fuels are not fully understood, which creates greater uncertainty and risks when switching to alternative fuels.

Such a ban will also apply to fuel oil with a low sulphur content – this is a residual fuel that is not an environmentally friendly alternative to HFO. In this respect, the following scenarios may be identied for the Russian Arctic eet in the context of the increasing environmental requirements. Shipowners and eet operators in the Russian Arctic are facing a rather di cult strategic choice.

Use of low-sulphur residual and distillate fuels will immediately raise operating costs. At the same time, installation of a scrubber – a special device used for removing various compounds from gases – will not allow for use of fuel oil aer use of residual fuels in the Arctic is banned in 2024. Even greater risks are faced by shipowners when building new vessels that require high capital investments. At the same time, converting to LNG or ordering a new eet is the most capital-intensive investment solution. In this case, however, the eet will be allowed to operate in the Arctic zone for the long term, until 2050. Even the strict new environmental requirements will not aect the operational activities and will not lead to additional capital costs during the ship’s life cycle.

Since maritime transport is the most cost-eective means for delivering goods – today, more than 80% of world trade goods travel by sea – signicant results in reducing global greenhouse gas emissions can be achieved by regulating the quality of fuel used in shipping. is can also be done by further tightening the emission standards for fuel use. In particular, the IMO is expected to introduce additional emission restrictions and requirements on the quality of fuel for shipping by 2050. Reduced emissions along the production chain can be achieved in many ways. In particular, this can be done by reducing fuel consumption and improving the energy e ciency of marine engines through technological improvements, use of fuels with a reduced carbon footprint (for example, LNG), as well as capture and neutralisation of emissions. Scrubbers and neutralisers can be used for this purpose.

Conversion to fuels with a lower carbon footprint in their production and use is a key area for reducing greenhouse gas emissions from shipping. e following types of fuel are considered as alternative fuels suitable for shipping in the long term gas – LNG, hydrogen, methanol, and ammonia. These fuels can also be produced in limited quantities using renewable raw materials or electrochemical technology. Two types of fuel, LNG and methanol, are, however, currently considered the most promising for use in the Arctic for various reasons.

Of all the possible types of alternative fuel, there is more practical experience of using LNG in shipping. This is due to the big LNG production volumes in the world (more than 350 m tonnes a year), the high maturity of LNG storage and use of technologies on board ship, as well as the wide availability of LNG in various parts of the world. Most estimates of LNG use as a fuel show a significant reduction in CO2 emissions into the atmosphere. This reduction is achieved by reducing both the relative carbon content of the fuel and its specific consumption.

Even so, LNG as a fuel has a number of ddisadvantages associated with so-called methane slips, the unburned methane residues in the engine exhaust gases. Methane slip contributes to the most to the carbon footprint when LNG is used as methane has a high greenhouse potential. At the same time, progress in the engine industry allows methane slip to be reduced many times over. In fact, we can say that, in the near future, the issue of methane slip when using LNG will become significantly less acute. When assessing the contribution made by LNG to the climate situation, it is necessary to take into account the area of origin and area of use of the LNG. The Russian Arctic is becoming a global LNG production hub because of the modern technologies in place and improved energy efficiency of production due to use of external cold.

The possibility of directly shipping LNG for bunkering without the need for long-distance transportation results in a reduced carbon footprint and lower greenhouse gas emissions. In particular, the carbon footprint of LNG production at the Yamal LNG plant is significantly lower than that of most LNG plants in the world. This could play a key role in developing Arctic shipping.

Methanol could be a second promising transport is well developed and has been widely used for many years. In particular, there are many examples of mass use of methanol as an additive to petroleum fuels in the United States, China and the Middle East. Use of methanol on ships is signicantly less widespread.

The prospects for the use of methanol are based on:

• need to diversify fuels for shipping

• suficcient ease of storage on board the vessel

• possibility of producing methanol from biological raw materials or using electrochemical technologies with capturing CO2 from atmospheric air • wide geography and large volume (more than 80 million tons a year) of methanol production worldwide

• possibility of using both internal combustion engines and fuel cells

In addition, methanol is easily decomposed by living microorganisms, which greatly facilitates the elimination of its spills. At the same time, unlike LNG spills, methanol spills do not result in GHG production. Methanol has a high octane number, which allows it to be used e ciently in spark-ignition engines. It is also characterised by a low cetane number, which prevents it from being used directly in compression-ignition engines. At the same time, it does not contain sulphur and the lower specic caloric value of methanol results in more fuel being required.

Today, several projects are under way in the world to convert ships to methanol. In particular, the Green Maritime Methanol, Pon Power, and FASTWATER consortia are engaged in this work. Russia also has experience in using this type of fuel. In the autumn of 2020, the rst Flotmetanol pilot project of a oating methanol plant was launched o the coast of Yamal. e plan is for its capacity to reach 10 thousand tonnes a year. In turn, methanol is used by Russian oil and gas companies in hydrocarbon production projects. Raw materials come from the Tazovsky oil and gas condensate eld, which is being developed by Gazprom Ne. In the future, it is planned to develop the bunkering of ships, creating the infrastructure needed to service ships of the new type with engines running on methanol.

Nikita Dobroslavsky is expert at the SKOLKOVO Moscow School of Managemen