Steadily and Steadily with a Head - Qingdao: Decarbonization in the Shipping Industry Rises a Tide of Ship Renewal

The decarbonization of the shipping industry has sparked a wave of ship renewal

Qingdao has formed a complete industrial chain in the field of clean energy powered ships, and a group of enterprises such as Beihai Shipbuilding, China Shipbuilding Engine, and Heidewe are seizing the opportunity to seize the initiative

Under the strong impetus of low-carbon transformation in the global shipping industry, the shipbuilding industry has ushered in a super cycle of updates and replacements.

In the first quarter of this year, Qingdao shipping companies signed 20 new ship construction orders, almost all of which were clean energy powered ships. At present, Qingdao has taken a leading position in the field of clean energy powered ships, forming a complete industrial chain including the design of green and environmentally friendly ship types by the Civil Shipbuilding Center, the construction of ships by Beihai Shipbuilding and Qingdao Shipbuilding Company, the production of marine power by China Shipbuilding Corporation's engines, and the provision of environmentally friendly ship accessories products by Heidelberg and Qingdao Shuangrui.

The recently released "Implementation Plan for Promoting Large scale Equipment Renewal and Consumer Goods Exchange in Shandong Province" proposes to encourage and support the early scrapping and renewal of high energy consuming and high emission old transport ships, as well as electric The development of new energy and clean energy powered ships such as LNG. In the view of industry insiders, this will further stimulate investment in clean energy powered ships and accelerate the pace of decarbonization in the shipping industry.

Shipping carbon tax is on the horizon

The large-scale updating and replacement of ships is related to the cyclical nature of the shipping industry, with a service life of about 20 years. Ships produced in the previous super cycle are facing large-scale elimination. On the other hand, the increasingly strict requirements for low-carbon transformation have given rise to new markets such as alternative fuel ship construction, environmental equipment modification, and port new energy applications.

The shipping industry is a major emitter, with carbon emissions accounting for 3% of global greenhouse gas emissions. Last July, the International Maritime Organization (IMO) adopted a new strategy for reducing greenhouse gas emissions from ships. The revised strategy includes achieving net zero greenhouse gas emissions from international shipping by 2050 and committing to a 30% reduction in global emissions by 2030 compared to 2008, with the goal of using alternative fuels reaching 10%.

The introduction of a shipping carbon tax has made it more urgent for ships to reduce carbon emissions. The EU has incorporated the shipping industry into the carbon emissions trading system, and high energy consuming and high emission ships traveling to European routes in the future will receive carbon emission bills.

According to the latest statistics from UK shipbuilding and maritime industry analyst Clarkson, out of a total of 232 new ship orders with a total tonnage of 12.4 million in the first two months of this year, as many as 126 ships with a total tonnage of 6.8 million were alternative fuel ships, accounting for 55.1%, exceeding last year's 43.8% and breaking the historical record of 53.7% set in 2022.

In addition to the comprehensive shift of new ships towards clean energy, many old ships that have not yet reached their retirement age also need to undergo environmental upgrades. Environmental protection marine equipment such as washing towers, desulfurization towers, and carbon capture systems are in high demand.

Not long ago, the Winning Universe vessel of Weili International Group was retrofitted at Beihai Shipbuilding, and Heidelberg provided a one-stop solution of "exhaust gas desulfurization system+carbon capture system reservation".

"Many old ships' carbon emissions do not meet the standards, and one solution to avoid carbon taxes is to install carbon capture systems to collect the carbon dioxide generated during navigation, compress it into liquid form, and bring it back to China for further processing." According to Lu Kechao, Director of Development Department of Heidelberg Technology Group (Qingdao) Co., Ltd., Heidelberg's low-carbon shipping solutions cover new fuel (methanol/LNG/ammonia) supply systems, carbon capture and reuse systems, ship exhaust gas desulfurization systems, and solid-state hydrogen storage The latest cutting-edge technologies such as AEM hydrogen production and carbon dioxide hydrogenation to synthesize methanol.

Each technology route has its own advantages

Clean energy is the key to decarbonization in the shipping industry. Currently, the technological routes for replacing fuel in the shipbuilding industry are represented by liquefied natural gas (LNG), methanol, ammonia, hydrogen, batteries, etc.

Among all the technological routes, LNG is the most mature, and LNG dual fuel engines used in large ocean going ships have been delivered in bulk. More promising is methanol, which can be stored at room temperature and pressure with only minor modifications, LNG must be stored at a low temperature of minus 162 degrees Celsius, and the cost of a storage tank alone is tens of millions of yuan. From the perspective of reducing emissions and controlling costs, more and more ships are choosing methanol as their power source Lu Kechao said.

Among the top ten global shipping giants, Maersk, DaFei, COSCO Shipping and others have joined the methanol fuel camp, with Maersk ordering 18 large methanol powered container ships in one go. Heidelberg has also completed the first domestic order for a methanol fuel supply system, providing a methanol fuel supply system solution for the 10000DWT methanol dual fuel integrated electric propulsion ship of the National Energy Group Shipping Company.

Another promising clean energy source is ammonia. Ammonia can burn like pure hydrogen without producing carbon emissions, making it easy to store and transport. At the end of last year, Belgian shipowner CMB chose to build its first batch of ammonia fuel series large bulk carriers in Beihai Shipbuilding, with ammonia fuel engines manufactured by China Shipbuilding Corporation. According to China Shipbuilding Engine, the first ammonia fuel engine will be delivered next year. In February of this year, Qingchuan Company secured the world's first order for an ammonia fuel container ship, expected to be delivered in 2026, operating on the route between Norway and Germany.

Among all clean energy sources, hydrogen is the most ideal zero carbon fuel. However, hydrogen has drawbacks such as easy leakage, diffusion, flammability, and explosion, and the storage and transportation issues have not been fully resolved. The German company Mann has developed a new type of marine hydrogen internal combustion engine, and the "Three Gorges Hydrogen Boat 1", which uses a hydrogen fuel cell power system, has been put into use in Yichang. The related applications are all for inland or offshore shipping, and have not been seen in large ocean going vessels.

In addition, another low-carbon route for shipping is batteries, which are limited by their short range, insufficient charging facilities, and high costs. They are mainly used in niche markets such as ferries, sightseeing boats, and port tugboats. Taking Qingdao Port as an example, the country's first oil electric hybrid intelligent tugboat has been launched, which can achieve zero fuel consumption and zero emissions in pure electric mode.

Taking green methanol, which is highly favored by the shipping industry, as an example, its "greenness" is reflected in the production of hydrogen through green electricity, and then the reaction of hydrogen and carbon dioxide to produce methanol. In 2023, the number of ships using methanol as fuel reached 138, but the production, storage, transportation, and refueling of green methanol still lags behind. Maersk has stated that the company needs 750000 tons of green methanol by 2025, an estimated 5 million tons of green methanol by 2030, and approximately 20 million tons by 2040.

"After the delivery of a large number of new ships, the supply of green methanol fuel is far from sufficient. A 21000 TEU container ship consumes approximately 30000 to 50000 tons of methanol annually, and the current green methanol project capacity under construction in China is unable to meet the demand." Lu Kechao said.

Shanghai Port has taken the lead in introducing LNG refueling ships and green methanol refueling ships, building the world's first methanol marine fuel trading platform, and creating an Asia Pacific ship clean energy refueling center. On April 10th, Maersk's "Astrid Maersk" vessel docked at Shanghai Yangshan Port, completing the first domestic "ship to ship" refueling of bonded green methanol fuel. Qingdao Port also plans to launch a number of projects this year, including methanol fuel vessel refueling and shore power intelligent management system, to promote the clean energy structure. (Qingdao Daily/Sea View News reporter Zhou Xiaofeng)