Sustainability agenda
Ambition
Spliethoff Group is committed to contributing to a more sustainable shipping environment and bases its agenda, and especially the reductions, on the directions set by the various regulations/initiatives as IMO, EU and Poseidon. The reduction goals set by these organizations present a realistic and achievable goal.
In its GHG strategy, IMO envisages to reduce the carbon intensity of shipping and pursue 70% reduction by 2050 (compared to 2008). The 2008 reference is challenging, as reliable measurements of the emission data in this period are not available. When we compare the average EEXI values of the 2008 vessels in operation with the 2021 vessels, we see that, through fleet renewal, this value was lowered by 8%. Over the last 5 years, operational measures were also introduced to sail the vessels more efficiently by optimum trim, digital twin and energy management plans, which also led to savings of around 3% on the fleet average. Accounting for these achieved reductions, from 2021 onwards, the carbon intensity still has to be reduced by 60% to reach the 2050 target. This means around 2% per year. The Poseidon Principles are also based on an average saving of 2% per year but the EUfuel directive is different. It is based more on the expected developments and application of alternative and sustainable fuels. This directive increases its reduction in emissions upto 1.4% per year until 2035, but accelerates thereafter to 2.6% and even to 6.6% after 2040. After 2045 it slows down again to 3.2% savings per year. Spliethoff Group’s ambition is to reduce the average emissions of its fleet with an average of 2% per year (% reduction of mt CO2 / (dwt*distance sailed)) to reach 70% reduction of carbon emissions in 2050.
Emission reduction agenda
The availability of lower carbon emission energy carriers or fuels will have a significant influence on the ability to achieve the goals. The volumes, prices and worldwide availability of these types of fuels are uncertain, making it difficult to determine a route at this moment in time. From research, publications and suppliers information, it is expected that bio or synthetic fuels will be available on a larger scale only from 2030 onwards. The Spliethoff sustainability agenda is divided in three phases. The first phase covers the improvements of the existing fleet and the current replacement programme on order. In the second phase, from 2025 to 2035, the main improvements will be made by replacing existing series by more efficient vessels running on or prepared for alternative fuel types. From 2035 onwards, the third phase, synthetic and/or biofuel alternatives are to be used to achieve the ambition.
Phase 1 - Existing fleet and newbuild programme
The emission reduction for the existing fleet will be limited to system upgrades, operational measures and the use of bio and/or e-fuels. Due to technical challenges, retrofitting to a new fuel does not offer a solution. The designs of the existing fleet are optimized for flexibility, deadweight, deck space and m3 intake. This resulted in designs where no space is left for new, larger systems and the redesign might impact the setup of main systems as for example hatch cover layout. The engine types installed on the existing fleet cannot be retrofitted and will require a replacement of the engines. For the existing fleet, the emission reduction will be achieved by increasing efficiency of the vessel systems, optimizing the operational performance and using bio or synthetic fuel. As a large amount of energy savings in the onboard systems have already been implemented, the maximum saving which can be achieved on the existing fleet is abt. 4.5%. The areas of improvement identified are operational optimization, shore power, pitch-RPM optimization, sailing on combinator mode and the installation of frequency drives on main consumers. This 4.5% can be achieved in 2024, the overall CO2 emission would be reduced by 49,000 mt per year. Slow steaming is an effective measure to reduce emissions, but it will also reduce the ton-mile number, as less miles are being made. However, slow steaming is not accounted for in the sustainability agenda and can be used when lagging on the 2% reduction target. Currently, 4 series of vessels are on order. Although all these vessels still operate on fossil fuel only, their design has been optimized in hull form, operating speed and engine choice. Due to this replacement programme, the total CO2 emissions will increase by 36.500 mt/yr. This is explained by the fact that the fleet will increase. However, the average fleet emissions per ton-mile will be reduced. The emission reduction in phase 1 leads to an average fleet emission reduction to 82.5% compared to 2021. This is below our target and will require that this gap must be bridged by using biofuels, stepwise increasing from 0.5% of the bunkers in 2022 to 2.5% in 2025, which, based on the successful trials on our Flevogracht with 100% bio fuel, we feel confident to do.
Phase 2 - Future fleet replacement
The newbuild programme between 2025 and 2035 should accommodate a large share of the emission reductions. This will partly be achieved by a more efficient design, but the main choice will be the fuel base. Two pathways are considered, either a heavy fuel oil-based design, ready for a retrofit to a synthetic fuel, or an LNG based design, which can switch to synthetic or bio-LNG in the future. The various choices for synthetic future fuels are discussed under Phase 3. With a fleet renewal programme of three or four vessel series over the period 2026-2035 with heavy fuel oil, retrofit ready vessels would bring a saving of 11.5% in fleet emissions and a saving of CO2 emissions of 184,500 mt/year. The same replacement program, but with LNG installed on these series would lead to an additional 6.5% reduction in the fleet AER and emissions which equals to 95,000 mt CO2/year. Below graph depicts the phase 1 and phase 2 emission savings. Although there are still choices to be made in the replacement programme, it is clear that each replacement of a smaller series will only have a limited impact on fleet AER savings.
Phase 3 - Future fuels
As indicated in the previous paragraphs, the future fuel choices will depend on the availability and price levels of the synthetic and bio-fuels. Currently there is a lot of uncertainty regarding the availability, the safety and prices of the future fuels. This means that at this moment in time there is no clear path forward and flexibility will be required in new designs. For the fleet of MPPs, HLVs and RoRos, the following observations can be made on the carrier of the future. The difference of grey/blue/green/bio-origin of a fuel will not influence the choice of the carrier of the future fuel, as both bio, green and blue will lead to net carbon savings at about the same level. However, if there is good availability of the grey variety, it could help soften the transition to fully sustainable in periods where availability is still limited. The choice of fuel ‘carrier’ will have a large impact as there is a large variety in storage, fuel system and engine system. From the analysis of the future fuels the following pathways seems most likely for newbuild designs. The first pathway is to build LNG – ammonia ready, and be able to switch to bio/E-LNG later. The second route is to build HFO – methanol ready, being able to retrofit to methanol later. This option limits the building costs and operational costs now and until the future of fuels becomes clearer.
Conclusions
The ambition of 2% emission reduction on average per year is in line with the IMO and EU regulations and ambitions, and this target seems achievable. However, to meet the target in 2035, a significant amount of E-fuel or biofuel must be blended in. The three-phase approach is a good approach with a focus on optimizing the existing fleet and the existing newbuild programme up to 2025 first, focus on the future newbuild for the period 2025-2035 and keep the options after 2035 open, as this is fully dependent on the availability of the fuels of the future.
