Kokarakis: Switching to alternative fuels is the key to CII compliance

The most effective way of complying with the CII index and having a good rating is to utilize the emerging alternative, low and zero-carbon fuels, John Kokarakis, Vice President of Technology & Business Development Hellenic-BS-ME Zone at Bureau Veritas, said.

Kokarakis was speaking at the 6th Annual Capital Link Cyprus Shipping Forum on Fostering Environmental Sustainability held at the beginning of March in Limassol.

Carbon Intensity Indicator (CII) is a tool developed by the International Maritime Organization (IMO) to help reduce greenhouse gas emissions from ships in line with its decarbonization strategy for the shipping sector.

The CII measures the amount of carbon dioxide (CO2) emitted per transport work, such as per tonne of cargo transported over a certain distance. It is calculated by dividing a ship’s total CO2 emissions by its transport work, and then adjusting for factors such as the ship’s size and speed.

The purpose of the CII is to encourage ship owners and operators to improve the energy efficiency of their vessels and reduce their carbon footprint.

That being said, the index has been on the receiving end of a great deal of criticism amid concerns that the methodology used might result in unintended consequences and penalization.

Namely, the rating of a ship will highly depend on how a ship is traded, which is largely dictated by a ship’s charterer. Factors that can also impact these are operational realities, like port congestion or port infrastructure, another issue that is outside of ship owners’ control. Ultimately, ship owners would be ‘stuck’ with a poor rating of the ship.

However, Kokarakis believes many of the implementation challenges can be avoided by utilizing alternative fuels.

Liquefied Natural Gas (LNG) is currently dominating the industry as a lower-carbon alternative to traditional marine fuels. Nevertheless,  two major issues have been associated with LNG as fuel, the methane slip and its well-to-wake profile pointing to the fact that shipowners who have invested in the LNG pathway will need to shift to renewable synthetic LNG (e-LNG) in the long-term.

Biofuels are increasingly popular among shipowners as they can be used in conventional diesel engines with only minor modifications and have the potential to significantly reduce emissions, depending on the feedstock and production methods used. Nevertheless, their availability remains a major challenge.

Methanol is also gaining ground among shipowners as the most realistic marine fuel option that requires minor changes to existing engines. It is widely available and it offers a pathway to net zero.

Furthermore, due to a long history of safe handling, methanol has been described as the lowest-risk fuel compared to LNG, hydrogen, and ammonia.

Hydrogen and ammonia can be produced using renewable energy sources, making them promising zero-carbon solutions for the industry. However, hydrogen is still in the early stages of development for use in the shipping industry, and significant infrastructure investment will be required to support its use. Ammonia, on the other hand, is highly toxic and requires significant safety measures to be put in place for its handling and storage. Hence, the two solutions have a big road ahead of them before becoming mainstream solutions.

Industry estimates show that by 2030, almost half of the global fleet is expected to be category E or on the borderline with the rating.

Nevertheless, a VLCC using high sulfur fuel oil that falls into the E category can achieve an A rating immediately by switching to biofuels B30, hence the impact of using alternative fuels on vessel rating can be dramatic.

“Electrification and decarbonization will go hand in hand, and production of cheap electricity will be key to help realize a decarbonized society. Nuclear energy can play a role in that respect, for example for the production of hydrogen, which is expected to replace fossil fuels in the future as it provides more energy per unit weight than batteries. There will also be a need for short and long-term energy storage for vessels,” Kokarakis added.

The role of classification societies in that respect is of strategic importance, Kokarakis added.

As highlighted, class societies are doing extensive R&D and technical, economic, and feasibility studies with the aim of helping shipowners to have green fuels for the future and long-term planning. At the same time, they issue the ‘green regulations’ to environmentally-sensitive shippers to promote sustainability and assist banks and financial institutions to check compliance with the Poseidon principles.

“Future fuels entails collaboration and class societies are the incubators of collaboration, as we are putting together all the stakeholders,” he said.

Indeed, classification societies are facilitating numerous projects in the industry exploring alternative fuels, green corridors and technologies and vessel concepts involving fuels like methanol, hydrogen and ammonia.

By adopting cleaner fuels such as biofuels, hydrogen, and ammonia, the shipping industry can significantly reduce their carbon footprint and improve the efficiency of their vessels, moving past the impact of the energy efficiency measures that can be effective but have considerable limitations especially for older tonnage.

In conclusion, while alternative fuels hold great promise for reducing emissions in the shipping industry, it will take time for these fuels to become widely available and affordable at scale. Therefore, it is crucial for the industry to take action in the meantime to prepare for the transition to these fuels.

This may involve investing in more efficient technologies, such as hybrid engines and waste heat recovery systems, to improve the energy efficiency of existing vessels. It may also involve exploring alternative propulsion systems, such as wind-assisted propulsion and electric power, to reduce emissions in the short-term. By taking these steps now, the industry can reduce its carbon footprint and prepare for a future in which cleaner and more sustainable fuels become the norm.