Digitization and
Decorbonization In Shipping

Staying In The Race

This article is neither about IMO regulations nor carbon neutrality targets. Instead, it explores and examines ideas on how digitization can support carbon emission reduction in practical ways. In view of the current reality, it is ever more critical to improve asset efficiency and mitigate societal risks to stay in the race.

International shipping is estimated to consume 330 million tonnes of fuel per year¹ – representing a significant (50-60%) portion of total vessel operating expenses. Understandably, reducing this expenditure is of great interest to ship operators. The consequent reduction of carbon emission also provides an added business motivation with stricter environmental regulations.

Mitigation Is Key

Various international, regional, and national initiatives on pollution prevention and climate change mitigation have given rise to a large number of well-intended measures across the globe. For ships, these have translated into major drives into fuel optimization and carbon emission reduction. There are different approaches to maritime decarbonization. On a macro level, these can commonly be divided into two broad categories: infrastructural and operational.

Among the infrastructural measures we can include equipment for exhaust gas scrubbing, alternative and dual fuel systems such as usage of hydrogen, ammonia, LPG and LNG. With the exceptions of hydrogen and ammonia fuels, for which challenges have yet to be overcome, there has been an increasing trend of such implementations in recent years. Significant CAPEX is required to install these measures. One study² estimated that the scrubber option will cost €50 per tonne of CO₂ emission handled.

Operational measures are more readily available and quicker to implement. Most include a digital system in the form of a Software as a Service (SaaS) platform. SMARTShip from Alpha Ori Technologies (https://www.alphaori.sg/) is such a tool that is rising in popularity. This IoT platform SMARTShip includes, among hull performance, predictive maintenance, diagnostics and monitoring, a fuel optimization algorithm that has been shown to help reduce fuel consumption between 5–10%. An example of how a shipowner was able to derive significant benefits from the use of SMARTShip to accrue fuel savings is given here.

Among the high return and low risk initiatives, optimization of fuel consumption remains an important option to consider. Table 1 displays the consumption and related fuel and carbon costs for two actual voyages from different vessel types.

Financial and environmental benefits are not difficult to realize with minimal improvement in efficiency. If the vessels are underway 200 days per annum, a savings of only 5% will result in gains of nearly $1.78M for the 7000 TEU container vessel and $297k for the LPG carrier per annum. The associated environmental benefit of reduced carbon emission is also substantial.

Sources:

1. “Techno-Economic Analysis and Life Cycle Assessment of Greenhouse Gas and Criteria Air Pollutant Emissions for Biobased Marine Fuels.” Techno-Economic Analysis and Life Cycle Assessment of Greenhouse Gas and Criteria Air Pollutant Emissions, 16 Oct. 2020, https://www.maritime.dot.gov/innovation/meta/techno-economic-analysis-and-life-cycle-assessment-greenhouse-gas-and-criteria-air.

2. Krantz, Gustav. CO2 And Sulphur Emissions from the Shipping Industry – EGCSA. Oct. 2016, https://www.egcsa.com/wp-content/uploads/CO2-and-sulphur-emissions-from-the-shipping-industry.pdf.