Transport and Environment (T&E), “Europe’s leading clean transport campaign group”, has a plan. They believe Europe could be able to produce all the batteries it needs by 2027, without imports from China. It’s a laudable goal, and the idea is amazing since Europe is fast rushing to battery-powered electric vehicles, which consume lots of batteries.
The group imagines a European sovereignty fund to support domestic battery production, and streamlining of EU rules on state aid. Battery plants now take a long time to build, since there are considerable risks to their storage and manufacture.
According to the article, about half of Europe’s batteries are already sourced there. The EU is mandating electric vehicles by 2035, which sets up a big increase in demand for batteries.
The supply chains associated with electric vehicles are interesting and of crucial importance so that they will be accepted and effectively used. Batteries are a major element, and disruptions in the supply are not healthy for European manufacturers.
Shifting to greener fuels sounds easier than it is. The supply chains for common maritime fuels such as HSFO and marine gasoil are highly developed and complex. But for new fuels such as cooking oil, hydrogen, and ammonia, there aren’t any supply chains.
Even if we had excellent marine engines using these fuels, there would be no place to ‘gas up’. In many ways, it’s like the problem auto drivers have with electric cars; you need to know where you can fill up. The highly developed automotive fuel supply chain is one reason why electric cars are taking so long to catch on with the buying public.
Another issue, which plagues the electricity supply chain as well as the marine fuel one, is the ‘greenness’ of fuels. Some fuels burn green, producing less emissions, when they are propelling vehicles; but their means of production is not green at all.
For instance, hydrogen production takes a lot of electricity when it’s made by the usual method, by electrolyzing water. But how green is the energy source for the electricity? Did it come from a coal-fired plant, or from a solar or wind generation facility?
For maritime, we call this well-to-wake analysis of the greenness of fuels and their supply chains. Can we do effective well-to-wake analysis of marine fuel supply chains?
The article by Paul Bartlett below refers to a new report from Lloyd’s Register addressing this problem. The report is well worth getting for maritime pros. It’s going to be crucial to have a full understanding of the overall emissions benefits of all the possible marine fuels, if we are to build new greener ships and develop green trade lanes. A lot of work and money will be needed to set up effective maritime fuel supply chains and supplies.
The International Maritime Organization (IMO) has issued their rules for the Carbon Intensity Indicator (CII), which is intended to combat global warming by reducing carbon emissions. It’s been years in the making.
But some of those affected by the regulation think there are flaws in the index which can produce some unintended consequences.
We know that many ships are chartered– they are operated by firms or people who are not their owners. Charter contracts determine how the ship will be operated and how the ship owner will be paid for allowing the use of his ship. But the contracts may allow the charterer to operate the ship in a way that reduces the CII score and causes the ship to fall into a lower class. Perhaps the ship falls into Class E which says the ship should be withdrawn from commerce– sentenced to the shipbreaker.
The Baltic and International Maritime Council (BIMCO), a non-governmental group that offers clauses for contracts addressing numerous international shipping issues, has prepared a contract clause for chartering contracts. This is a useful starting point, because BIMCO contracts and clauses are often used as a starting point for making a charter contract. Use of the BIMCO contracts or clauses is totally voluntary.
The article below explains some of the issues that can arise between charterers and owners, with equations to boot. The essence of the problem is that the index is based on ship capacity, not cargo carried. So sailing empty miles improves your score on the index two ways– first because sailing light burns less fuel, and second because the miles add to the denominator of the measure, reducing it. The examples given show the effect.
Many feel the index should be based on carrying cargo. And some believe the BIMCO clause will not be workable in contracts, and will not use it. But the problem remains of how to divide responsibility between ship owner and charterer for managing the CII score.
I tend to believe any rule is better than nothing. And I think charterers and shipowners will work out how to manage the contract problem. As for empty sailing or sitting in port, I don’t think anyone wants to sail without a paying cargo, or suffer delays even to improve the index. So everyone, owners and charterers, will continue to fill their ships when they can, and sail shorter routes when they can, simply because it’s expensive to operate the ship you’ve chartered; you have to earn a profit at it.
For all the complaining, the CII is still a good thing. We will have to see if it can be tweaked to everyone’s satisfaction.