Norway-based shipping firm Wallenius Wilhelmsen is making an early bet on wind-assisted propulsion to aid its decarbonisation efforts as it seeks to go beyond the IMO's GHG cut targets.
Last year the Wallenius side of the business announced a new joint venture with Alfa Laval to develop the Oceanbird project seeking to advance the use of wing sails in shipping.
The joint venture, AlfaWall Oceanbird, will be conducting land-based tests of its wing sail system this year, before retrofitting Wallenius Wilhelmsen's pure car and truck carrier Tirranna with one of the sails next year. The company sees the sail delivering 7-10% cuts in bunker consumption and emissions.
Roger Strevens, vice president for global sustainability at Wallenius Wilhelmsen, told Ship & Bunker the technology could potentially be applied much more widely in the company's fleet. The firm would be unlikely to equip its oldest ships with the systems, he said, but beyond that many other vessels may be suitable.
"There would be vessels which are reaching the end of their service life; if they are 27, it's obviously not going to make sense," Strevens said.
"After that, why did we choose the Tirranna?
"It's because she's got a long service life ahead of her and her drydock schedule fits very nicely with when we'll ready to do our first retrofit.
"She's pretty representative of very many of the vessels that we have in our fleet."
The company will not know the full financial impact of the retrofit until the Tirranna is sailing with its new wing sail, but it is confident it will turn out to be profitable.
"We've done a lot of detailed projections which we'll be validating with the retrofit project," Strevens said.
"We are confident that this retrofit makes sense for us to do in its own right."
Five Key Tests for Decarbonisation Tech
In analysing whether to carry out more retrofits of the technology -- and in analysing any other decarbonisation technology -- the firm applies five key tests, he said.
"In no particular order -- does it make financial sense?" Strevens said.
"That's not just in the context of today, but in 10, 15, 20 years from now, with consideration of all that may change in that time, including regulations and low-emission freight service demand.
"Does it make technical sense?
"That's a topic that we've worked with a lot with the wing sails in regard to stability and the emission reductions that will be achieved at various speeds in different wind conditions.
"The third point is, does it make regulatory sense?
"For wind propulsion in its own right, there isn't much concern vis-à-vis meeting future IMO or EU requirements.
"Meeting class rules is another important area, but progress is good.
"The fourth point is, does it make operational sense?
"For wind propulsion, that means is the wind where you wish to operate?
"Fortunately, the North Atlantic and North Pacific are pretty windy places, and they represent some of the biggest trade lanes in our business.
"Clearly wind propulsion is not going to be so effective in the doldrums at the Equator, but the solution doesn't need to be effective everywhere to be effective anywhere; it's not all or nothing.
"And the final point is, does it make commercial sense?
"This means if you adopt a given decarbonisation solution, are you going to have traction in the market? Is there going to be demand for the service that this vessel can provide?"
Coping With CII
One of the key challenges for shipping firms in 2023 will be wrestling with the IMO's new CII regulation, under which each ship is awarded a grade between A and E each year based on its carbon emissions per unit of cargo capacity per nautical mile travelled.
Ships receiving a D rating for three years or an E rating for a single year will need to implement a ship energy efficiency management plan setting out their plans to improve their performance.
Wallenius Wilhelmsen's internal target is a 27.5% reduction in its fleet's carbon intensity from the 2019 level, which would follow a previous 33% reduction seen between 2008 and 2018.
Determining how to change operating behaviour to get different CII grades has been complicated, Strevens said.
"It's a really complex question, because what do you want to aim for?" he said.
"Obviously the further up the letter ratings you go, the more it is going to cost, but is it going to be possible to pass that additional cost along the value chain?
"Use of alternative fuel is perhaps the quickest and most precise means of influencing a vessel's rating, but it is not possible to know with certainty what the costs of alternative fuels will be long in advance and there are also questions about availability of such fuel too.
"Since the whole matter of CII compliance is so dynamic it may not be possible or prudent to say exactly what ratings vessels will attain when it comes to reporting.
"From a commercial perspective, to a fair extent there is a choice between service disruption and service disruption.
"On the one hand speed or the number of ports called can be reduced, however both of those would disrupt the existing service.
"On the other hand one can opt to use a lot of alternative fuel, but that will come with a cost premium.
"It's a very hard balance to strike, or to project beforehand.
"I think one thing is clear though -- there's been quite a lot of discussion about the flaws and the perverse outcomes that CII can create, but there's no escaping the fact that CII is here.
"You've got to play the hand of cards that you're dealt; just complaining about it is not a strategy."
The IMO's Marine Environment Protection Committee (MEPC) is due to agree a revised GHG emissions reduction strategy later this year.
Stevens expects to see new decarbonisation targets emerging across a range of timescales.
"I would expect that there will be a revision of the 2050 greenhouse gas target," he said.
"It's also possible, but maybe somewhat less likely, that there will be a revision of the carbon intensity target for 2030.
"It's possible that we'll see an intermediate target for 2035 or 2040; something we would welcome in principle.
"I think that MEPC 80 is going to be a milestone in terms of IMO's GHG strategy, specifically concerning the further development of medium-term measures to support the strategy's targets.
"There is much discussion of an economic measure, like a levy, that would put a price on carbon in some respect, and for a technical measure that could be roughly along the lines of the FuelEU Maritime regulations of the European Union."
Alternative Fuel Attitudes
Wallenius Wilhelmsen is taking an open-minded approach to all of the alternative bunker fuel options on the table, Strevens said, provided they can deliver emissions reductions at least in line with the IMO's targets.
"We have done trials on some biofuel products, and I think that we will be using biofuel products to an increasing degree through the end of the year," he said.
"We see that, apart from the CII perspective, there's positive signals coming from our customers for reduced-carbon or carbon-neutral services.
"We've made no announcements about newbuilds; that's not to be mistaken with concluding that there's no activity in that area.
"As a listed company such announcements must be handled in a particular way.
"We look at the lifecycle footprint of fuels, not tank-to-wake, because that what matters from a climate perspective.
"And if a fuel doesn't make sense -- either in their own right, or in combination with other technologies -- versus IMO's minimum targets then we're not going to be considering them; it just wouldn't make sense.
"One other point to note is that we are not contemplating any bio-fuels that are not actually sustainable.
"That implies second-generation is the minimum."
IMO 2020 Compliance
In a previous era Strevens also served as chairman of the Trident Alliance, the lobby group set up in 2014 to argue for robust enforcement of sulfur emissions regulations on the concern that lacklustre enforcement in some regions might deliver an uneven playing-field in shipping. The organisation was discontinued in late 2020.
Looking back on it two years later, Stevens is now hopeful that non-compliance has been avoided as a major problem. HSFO demand has been creeping back up with scrubber installations gradually emerging -- and reached 31.9% of conventional sales at Rotterdam last year -- but few are now complaining about non-compliant use of high-sulfur bunkers.
"Within our segment, we think there is very little likelihood that there is gross non-compliance," he said.
"I'm not hearing from anybody that there are major concerns [about other segments], but our focus is obviously our segment, so I'm not going to be a spokesman for what's happening out there broadly.
"We wound down the Trident Alliance in late 2020 because we were satisfied that the enforcement measures that were implemented, like the carriage ban, were having exactly the effect that we hoped that they would have.
"Also, the new global gap coincided with the pandemic; the pandemic reduced oil demand, and that helped close the gap between the fuel rates."