Global climate initiatives like the Kyoto Protocol and the Paris Agreement are forcing various industries to reduce their emissions. The shipping sector is not one left behind. The expected rise in demand for carbon neutral vessels is pushing the sector towards advancements. Such innovation is LNG ships equipped with carbon capture technology.
LNG as a fuel reduces CO2 emissions per unit of energy by 20% relative to diesel. That makes it a preferable choice for shipowners to meet emissions cap regulations.
One such regulation is “IMO 2020”, introduced in January 2020. It aims to cut sulphur in the fuel oil used on board ships to 0.50% m/m. The sulphur content of LNG is well below the regulatory limit of IMO 2020 which makes it an appealing option.
As a result, many ship owners are now looking into retrofitting their vessels to burn LNG. As technology progresses, equipping vessels with ship-based carbon capture when they become widely available will achieve their carbon neutrality.
Mr van der Bles, director of development in Conoship International, has recently spoken at a webinar, part of “Marine Propulsion’s Marine Fuels Webinar Week”. He said: “You can start with LNG now and whenever feasible capture your CO2”.
According to Mr van der Bles, CO2 can be easily unloaded and stored for future use in empty offshore gas fields or where it is needed. “Therefore, less CO2 has to be stored onboard,” he also adds.
Japanese shipbuilding giant Mitsubishi announced plans in August last year to build and test a carbon capture system for ships. The CCS system promises to reduce ship emissions by 90%. The research, development and testing phase are set to last two years. The company is expecting to complete construction of the onboard capture system by the middle of 2021.
Carbon Capture Ships Financing
Taking the first steps towards carbon neutrality, ships need to be retrofitted for LNG as a fuel. Joining Mr van der Bles on the webinar, Stephan Vetter – a vice president for KfW Ipex Bank for maritime industries said financing LNG retrofits may cost €20 to €30 million for oceangoing vessels. Although expensive, financing is now easier to get as retrofits increase the value of vessels which makes loans viable.
The carbon capture is the next step in going carbon neutral. According to Mitsubishi’s calculations, the carbon capture system would add more than $45 million to the cost of a conventional very large crude carrier (VLCC).
What is attractive to shipowners and operators about Mitsubishi’s CCS technology though is that it could be installed as part of a retrofit rather than as part of a new ship purchase.
If the shipping industry manages to solve the finance and technological issues, carbon capture can be a great solution. The sector more than ever benefits from financing opportunities and investment interest towards decarbonization.