How to clean up the global shipping industry

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Good Clean Energy is a podcast that tackles one of the most existential questions of our time: how to build a world with abundant, affordable, carbon-free electricity. TAE’s McNiel dives into deep conversations with experts ranging from scientists to innovators to changemakers about the challenges our current electricity systems face and updates on the race for game-changing, clean ways to power our lives.

About 90 percent of the world’s trade is transported by sea, on giant polluting cargo ships that burn particularly dirty oil. Last week, the International Maritime Organization, the UN body responsible for regulating global shipping, set a new CO2 reduction target for the industry to get to net zero by 2050. To help us make sense of the transition that will need to happen, Maria Gallucci, a clean energy reporter at Canary Media, joins the show to talk about new green fuels and technologies for the industry.

The following transcript has been edited for clarity.


Hi, my name is Max. Max iPhone. People call me 15. I’m the ultimate powerhouse of smartphones, and I’ve just been born and packaged. Put in my seven second Steve Jobs box. I’m looking pretty chill and I’m getting packed up with my other friendly iPhones and we’re heading to port, Shenzhen that is, on the Pearl River.

We’re going to be taken from this big truck lifted with a crane placed on that big, huge cargo ship. It’s going to be weeks before I get to my Apple store, but hey, it’s the journey that matters. We’re dropped in the cargo hold, the engines rumble to life. The tugs are pulling us from the dock. We’re on our way.

We’re going to sail through the river delta into the South China Sea. I can just imagine…because, hey, my processor power is pretty expansive…what it’s like to be on the deck of this big ship. You see the gulls chasing us, the dolphins playing in the bow, the whales.

Past the Philippine Islands heading for California, Long Beach that is—the biggest, most busiest port in America where we’re going to get lifted again, the whole container and placed on a truck and rolled on to a train. Where are we going? We’re going to that great Apple store in Des Moines, Iowa, across America by rail into a truck, and into that beautiful white mecca that is the Apple universe.

On any given day, an Amazon truck may roll down your driveway and drop something off that has come from across the world, be it a pair of Nikes, a new keyboard, or perhaps the latest iPhone.

We have a global world. We manufacture in multiple countries. In fact, some products may visit multiple countries before they become a single product, and then they get placed on a ship and sent around the world. And that all comes at a cost. In the effort to reduce the cost of goods, sometimes we pay in other ways.

Today I’m joined by Maria Gallucci, a clean energy reporter from Canary Media who has spent a good deal of time exploring what global shipping looks like today and what could be done to make it cleaner.

My name is Jim McNiel, and this is Good Clean Energy.

Jim McNiel: Maria, welcome to Good Clean Energy.

Maria Gallucci: Hi. Thanks for having me.

McNiel: I’m delighted to have you because this is a topic I’m truly very interested in, being a devotee of the sea. Can you tell me a little bit about, you know, the current state of the shipping industry and why we should be talking about this and the context of energy?

Gallucci: Sure. So the international shipping industry is often described as one of these hard-to-decarbonize sectors. The international shipping industry contributes about 3% of global greenhouse gas emissions every year, and it’s one of these sectors for which there aren’t obvious or easy solutions for replacing its enormous fossil fuel consumption with more sustainable alternatives.

So and for that reason, it’s kind of important that the industry start working on solutions now, given how long it might take to actually develop them. And given how long ships actually operate on the waters, it could be 20 or 30 years.

McNiel: Let’s unpack that for a minute. I think that number is much more staggering than people can appreciate. So 3% of all the carbon emissions that go into the atmosphere every year is attributed to our worldwide shipping fleet. So that that would make it comparable to the nation of Japan. So 123 million people turning on their rice cookers and teapots every single day is the equivalent of our global shipping industry in terms of carbon emissions.

Gallucci: Right, exactly. And cargo ships are also major contributors of toxic air pollutants as well, that particularly affects people who live near,the ports or busy waterways. So there’s sort of other non-climate impacts that ships have as well.

McNiel: What is the fuel that the most of the cargo industry uses today?

Gallucci: So the majority of vessels use some form of petroleum products. For a very long time almost all of it was heavy fuel oil, which is kind of the bottom of the barrel dregs of the petroleum refining process. And that’s still a large share of ships fuel consumption today. But now, vessels are also using other types of petroleum products like marine gas oil, very low sulfur, fuel oil. They’re all kind of varieties of petroleum, some of which can comply with different air quality standards, but for the most part it’s diesel.

McNiel: Okay, so we keep talking about ways to decarbonize shipping, that it’s 3% of total global emissions, but why should we care? I mean, how important is shipping anyways?

Gallucci: Well, one thing that fascinates me about the shipping industry is how sort of ingrained it is in our daily lives. The figure is 80 to 90% of all traded goods will have moved over water at some point. So your t-shirt, your coffee mug, the beauty products in your cabinet, really almost anything. You can almost do an exercise and look around your home and see virtually everything has probably moved by sea at some point, if not the finished product, then the metals in it, so it really touches every aspect of our daily lives.

McNiel: Right. We have a very intertwined connected global supply chain. So 90% of the goods we receive come over ships. They’re using dirty oil, they’re emitting a lot of carbon. Why don’t they just switch back to wind? I mean, that seemed to be working pretty well.

Gallucci: I mean the main reason is that these ships are just so giant. They’re massive. They’re carrying hundreds of thousands of tons worth of cargo. They themselves weigh a lot, and certainly there is a big movement that’s gaining a lot of traction to incorporate wind on existing cargo ships. They use spinning rotor sails, kites, different types of technologies to at least capture some wind to reduce fuel consumption. But when it comes to towing an existing container ship across the ocean, it doesn’t seem like the kind of the old-fashioned sails are enough to do that.

McNiel: You sailed on a rotor sail ship. What was that like?

Gallucci: Yeah, that’s right. So I sailed on a container ship that sails from Rotterdam to England and back again. And this vessel, the Estrada, had two spinning rotor sales on top. And so when we left the port, they flip on a switch and these rotor cells start spinning. They’re like hyperactive barber poles essentially, and they help reduce the fuel consumption between 5 and 20%, usually on the lower end of that scale. But it was really fascinating to see, it really doesn’t kind of get in the way of operations, which is what you want when you’re adding something to a vessel.

So this is my first time sailing on a cargo ship as well, so that was really interesting. I learned that I’m a very seasick person, even on a big vessel. So I spent some time down in my cabin.

McNiel: You’re covering a tough beat. Yeah, that’s tough. Well, if you ever need a proxy, I’d be happy to go into some investigations for you. So when they turned those sails on, did you feel any difference in the way the vessel moved?

Gallucci: No, it was pretty imperceptible. So a rotor sail, so you can visualize it is like a big cylinder, and it’s just spinning around and around and they’re fixed on the deck of the vessel.

So another big challenge with the shipping industry is that there’s not these one-size-fits-all solutions. So for certain vessels, sailing certain routes, hydrogen may be a solution. The challenge is that, because the fuel is not particularly energy dense, you need a lot of it on board. So there are a handful of vessels that are already using hydrogen fuel cells. There’s actually a ferry in the San Francisco Bay area that will soon be operating as a passenger ferry that runs on hydrogen. But the challenge is that these vessels, they need to be able to refuel fairly often so that they’re not carrying all their fuel on board and taking away space from the cargo or from people. So hydrogen is one solution for certain kinds of ships.

McNiel: Like a ferry, like you said, where it’s going from point A to point B and it can recharge at either point. You have a fixed amount of distance so it’s very easy to calculate. But on the longer term, ocean voyages, hydrogen’s not really viable because of just the handling properties of it.

Gallucci: There are definitely proponents who say we could use hydrogen to sail across the ocean. But the consensus within the industry is that you’re going to need a different type of fuel.

Many companies are starting to consider ammonia, which contains hydrogen, but also nitrogen. And because of its characteristics is more energy dense. You can store more easily on board. So it doesn’t take up as much space as say hydrogen would. So that’s sort of the long-term solution for these massive ocean crossing vessels.

McNiel: Well, I mean, the first question I have when you talk about ammonia is I understand how hydrogen works as a fuel cell and it produces electricity. But how does ammonia work? Does it go into a fuel cell? Does it go into a combustion engine? How does that work?

Gallucci: So you can use ammonia in either a combustion engine or a fuel cell, so the major ship engine manufacturers right now are developing ammonia burning engines, and I think it’s fairly straightforward from a technology standpoint. The challenge there is that it does produce byproducts that you would also need to capture and scrub in a way to make sure you’re not creating more air pollution.

The benefit to using a fuel cell is that because it produces electricity through a chemical reaction instead of burning the fuel, you don’t have those polluting byproducts that you do with an engine, but the sort of the mainstream fuel cell technology today is not ideal for using ammonia. Ammonia requires higher temperatures to operate with a fuel cell. Companies are developing solid oxide fuel cells, which can operate at higher temperatures and use ammonia that way. Those are earlier along in the development process than the engines are.

McNiel: And of course, the ammonia that we are looking to process, whether it’s combusted or it’s converted from molecules to electrons, it needs to be produced in a green way, right? Because I think most ammonia that’s produced today, like say for fertilizer or for other chemical applications gets produced using, you know, fossil fuel energy.

Gallucci: That’s right. Almost all of the ammonia produced today is made using fossil fuels. So it is possible to make ammonia using renewables. The challenge obviously there is that you need way more renewable energy than we kind of have available today to produce enough green ammonia. And it’s also a lot more expensive.

McNiel: So what’s your take on this? I mean, what’s going to get the entire shipping fleet out there, or even a significant percentage of it, to make the kind of investment, which seems somewhat daunting. First you need production of green ammonia, then you need a way to convert it either to thrust or electrons. There’s a lot to be done here. And what are the incentives to the big shipping companies out there to make these changes?

Gallucci: Yeah. Kind of stepping back a little bit, a huge challenge for the shipping industry is that it is international and so you have operators from hundreds of countries and they all kind of have to come to some sort of agreement because a ship sailing from China to Los Angeles, for instance, needs to know that it’s going to be able to refill its tanks or recharge or whatever it is at the port it ends at. So rhe International Maritime Organization is the UN agency that oversees the shipping industry. And in 2018, the IMO set some goals for reducing emissions and eventually decarbonizing the industry. But they’re just that, they’re goals.

So this year actually the members of the IMO are getting together and they’re trying to set sort of more stringent policies to align with those goals of reducing emissions. Some countries are pushing for a price on carbon dioxide emissions. The European Union is starting to regulate emissions within the region’s shipping industry, which could kind of help serve as a model for the global industry.

But these are sort of policies that are in the very early stages of being developed. So there aren’t yet the incentives or the regulatory drivers to make shipping operators invest in these more expensive, more difficult ways of operating vessels.

McNiel: Do you think proper incentives can be created without the development of a global carbon tax? Wouldn’t that be the quickest way to address this and make incentives for shipper shippers to go green?

Gallucci: I’m not totally sure how to make it work. But shipping companies themselves, the kind of the major ship owners and operators, have said that they want a price on carbon emissions. And certainly there are others within the industry that oppose setting a price on emissions. I think there’s a concern as there’s in other industries that if companies are making these investments in cleaner fuels, they’re reducing their emissions, but other companies are not, and therefore are not generating these higher costs that they’ll be some sort of green penalty in a way.

So I think those who are arguing for having a tax or some sort of price on carbon emissions are saying this would level the playing field in that way.

McNiel: Well, perhaps when Amazon and Walmart decide that they’re only going to buy from green shippers that might change things a little bit.

Gallucci: And there is a movement underway among the Amazons and Walmarts, IKEA, Target, other giant retailers. There’s a movement to both pressure those retailers to commit to only putting their goods on greener ships. And the retailers themselves are kind of responding and starting to put pressure on the companies that they work with to move their goods.

It’s interesting because it’s another way of connecting this sort of out of sight, out of mind industry, which is cargo shipping, to the consumer. So, we as consumers and the companies that we buy from should have a say in sort of how the industry moves forward.

McNiel: Is there a green ammonia ship operating today, or is that yet to happen?

Gallucci: There’s no green ammonia ship operating today. There are engines in development. There are fuel cells in development.

Here in New York, there’s a startup that’s working to retrofit a 65-year-old tugboat with its own ammonia-driven power system. And so the goal is to kind of have that sail up a New York waterway potentially by the end of this year. That would be kind of the first of many steps to go from an old tugboat to a giant container ship. But they’re starting that process.

McNiel: So are you hopeful this is going to happen?

Gallucci: I am hopeful that the shipping industry will be able to develop solutions and address its emissions. I can’t say for sure that ammonia will be it, or that there’ll be any one single fuel. I think that’s kind of out of my wheelhouse, but I guess I kind of have to hope that shipping and every industry is going to make progress because we need them to from a climate perspective.

McNiel: In the meantime, are we going to see a lot more wings or kites flying off of super cargo ships? Is that something you’ve looked into?

Gallucci: Yeah. I think that we will. So maybe a decade ago there really weren’t any of these wind-assisted propulsion systems. And now there’s more than two dozen vessels that use some form of rotor sail or towing kite or even sails made from synthetic materials. That number is expected to double by the end of this year, and I think it’s just kind of picking up momentum. So 50 ships out of say 50,000 merchant ships that sail internationally, right? That’s a tiny percentage, but it’s notable I think because like I said a decade ago there, this didn’t really exist and there’s a much smaller movement to kind of revive old-fashioned sailing ships without engines to use only wind. And that is catching on, I think it may be a more fascinating story than it might be an actual making an actual dent in the overall industry emissions. But it’s still really cool to see that people are motivated to kind of develop their own solutions to shipping’s problems.

McNiel: Yeah, I saw a program in Costa Rica for the sailing ship Siba, which is like a 200 foot ship, it’s a couple hundred tons of cargo. It’s going to do local trade, but it’s all traditional, it’s all wood. It looks like Cutty Sark. It looks like an old clipper ship.

Gallucci: I actually visited the shipyard in 2017 when it was just planks on the ground, and I’ve been kind of following them along throughout the year. So it’s really inspiring and encouraging to see that they have the hull completed. I think the vessel might be ready to sail later this year, early next year.

And like you said, they’ll be trading goods within the Americas. The goal is to kind of expand the fleet, so it’s really interesting too, because so many people from Costa Rica and also internationally have literally had a hand in building this ship. So it is sort of connecting people in a way that is hard to do when you’re just kind of looking on the horizon and seeing a giant container ship.
McNiel: Right. And then stepping back to the conversation about kites and wings, I mean, these are not your typical windsurfer wings. These are like the size of a football field. They’re bigger and they’re computer controlled.

Gallucci: That’s right. So one of the companies sort of leading the way is Air Seas, which is a spinoff of Airbus. So the people building these giant towing kites have backgrounds in aeronautical engineering and they’re working to develop a fully automated kite that can launch itself and also steer itself and unfurl back into its little pod on the ship, you know, when they hit, bad weather or are getting close to port. So the idea is that it wouldn’t be something that the crew necessarily has to manage, but that the kind of computer system can do it itself.

McNiel: Yeah, especially when you’re on a huge cargo ship and you have a crew of 10 or 12 people.

Gallucci: You don’t wanna have to take any attention away from operating the vessel to operate the kite. So that’s sort of the goal. And those are already making trial runs across the Atlantic Ocean right now, and rotor sails are even farther along the development curve and are actually being used kind of in commercial operations, probably more than a dozen vessels now.

McNiel: And do they have a greater impact than a kite?

Gallucci: That I’m not sure. So because these are also new or recently deployed, a lot of the figures that you see are either projections or they might be data gathered from one individual device. Generally the sort of range that you hear is that wind assisted propulsion could reduce a ship’s fuel use by five to 20% and therefore reduce its associated emissions by five to 20%. But I’m not sure in terms of which one is kind of better at saving fuel. That probably still remains to be seen.

McNiel: Well, there’s also a car carrier that’s using a wing sail design in Scandinavia. Are you familiar with that?

Gallucci: Yes, exactly. And usually the wing sails incorporate some sort of automated technology, some sort of computing aspects as well so that they can rotate automatically. They can collapse.

McNiel: Yeah. They’re set by computer, not by sea men.

Gallucci: Yeah, exactly.

McNiel: You don’t need a main sheet trimmer to run a cargo ship.

Gallucci: Right. The goal is to kind of let it take care of itself and operate just like any other system on these modern computer-driven vessels do.

McNiel: And these are the wing designs, the kind of things we saw in the America’s Cup and the Cats and the Tri Morans. The fixed wings, they look like large jet wings.

Gallucci: Right and a lot of those wings in particular were kind of developed by people in the yacht racing world. So that’s sort of where they got their start and now they’re being expanded and kind of redesigned to fit more static cargo ship. But they had their origins in yachting.

McNiel: What’s the average life of a cargo ship? 30 years?

Gallucci: Yeah, that’s right. 20 to 30 years.

McNiel: 20 to 30 years? Yeah. So it takes, let’s say, aggressively 20 years to turn the fleet over. So, It’d be 2033 before all the existing ships out there today are updated. So we’d have to have a really good incentive for people to say when this ship gets retired, I’m going to go to a green solution. I think that’s what’s missing in my mind is what makes it profitable for Maersk or some of the other big players in the space to commit to a green fleet.

Gallucci: Right, and what’s tricky too is that they’re kind of making these billion dollar. I don’t want to say guesses, but there’s no certainty yet that the fuel that they choose to invest in is going to be the one that takes off. So Maersk, for example, has invested billions of dollars to build new ships that are capable of running on methanol, which like ammonia is a chemical that can be used in combustion engines. Maersk is also investing in the supply chain to make sure that there will be enough green methanol made from renewables and also that ports will be able to store and distribute the fuel as needed.

McNiel: Do you have a vision for what you think the shipping industry could and should look like let’s say in 2035?

Gallucci: What’s tricky with the shipping industry is how slowly things move because of how long it takes to build a vessel, how long it takes to make investments. So 2035 we’ll likely have hundreds of ships running on methanol, which is another type of low carbon fuel, although it’s not zero carbon. Maybe we could have a handful of ammonia-powered ships operating, potentially hundreds of vessels using wind-assisted propulsion devices.

You’ll have a lot more smaller ships using batteries. Already hundreds of ships use batteries in some form, either for propulsion or to power their equipment. And these, again, in the same way, with hydrogen are usually ships that are smaller and they’re operating from point A to point B and back, but they can recharge. So I think we’ll have hundreds more of those.

By 2035, I think we’ll have a lot more of these technologies deployed, but I think the industry will still be a very long way from being fully decarbonized. there’s still other things the shipping industry can do beyond changing the fuel it consumes on board.

There’s a big push underway to have ships plug in to the electric grid when they’re at birth rather than running their auxiliary engines, which creates a lot of pollution and brings a lot of fuel, to plug in and essentially run on electricity instead. So that’s something that is starting to take hold. There’s certainly potential for it to be used a lot more frequently and in a lot more places. And that would have a dramatic impact on local air quality. Ships using more wind-assisted propulsion. So there are things that existing vessels can do now to reduce their emissions as the industry works to replace fossil fuels. So I think that’s where it’s exciting to see progress happening in those areas, even though sort of the long haul toward decarbonization is going to happen more slowly.

McNiel: Yeah, every little step counts and makes a difference. Well, Maria, thank you very much. I’ve enjoyed this conversation. I learned a great deal.

Gallucci: Yeah. Thank you for having me.

Good Clean Energy is edited and produced by Jennifer Hsu. Mixing and sound design by Wade Strange and Mike Clemow at SeeThruSound. Digital production by Katherine Wiles.

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