Finding the right green fuel in quantities needed is the problem facing shipowners today
 Imagining the world as Klaus Schwab and his World Economic Forum (WEF) would like it to be, one finds it takes shape rather like George Orwell's world of Big Brother's Inner Party and Outer Party, but brightened by a forced cheeriness of Aldous Huxley's drugged-out Brave New World.
There's lot to imagine. Sometimes Deep State schemers go a bridge too far when acceptance of transgenderism is blocked by popular revulsion, when the designated hero, Bud Light's sexually indeterminate Dylan Mulvaney is viscerally rejected and reviled by beer drinkers worldwide. But the means of national independence, via legislative power have been dissipated and usurped by civil servants and state-created NGOs, ie, the Deep State, aka the administrative state.
Today's quest for acceptable marine fuel to meet climate goals means the end of a meaningful free-market economy. One can no longer get the best value for money from a range of once available options, but have one's choice narrowed by regulators to a choice between Pepsi and Coke.
What's more, one is not free to choose between these two because there is not enough of either to meet demand.
"Ships operating in the EU will see fuel costs double by 2030. We estimate that by 2035, cap-and-trade will level the playing field between fossil and green shipping fuels," said Roger Holms, a senior official at marine and energy equipment maker Wartsil.
"Technology is not an issue, we already can deliver engines capable of combusting both methanol and ammonia. The key challenge is the extremely low availability of green fuels," he said.
And how does one enforce the use of a product no one would buy if left to their own devices - enforcement, that's how. Mr Holms said: "Many green fuel project developers still have not invested, and we need financial incentives and emissions penalties to drive it."
If there is a common theme running through the West are inflationary policies making people poorer and more dependent on the state. More farmland has been taken from private hands, and the ability to exploit one's natural resources is being forbidden by the state.
Inflation through the printing of money via the sale of T-bills, the seizure of land through limiting its use and therefore its value, the blocking the use of non-compliant fuel.
A 16,000-TEU ship can consume up to 40,000 tonnes of methanol a year. Currently, low carbon methanol supply capacity is less than one million tonnes a year, which can only serve the needs of 25 such ships.
But there are plans to raise capacity, which could potentially surge to 24 million tonnes by 2028 if all the identified projects are financed and completed.
Mr Holms, who is president at Wartsila Marine, a unit of Wartsila Corporation, said that while it is still early days for the sector to cut carbon intensity, technology is already available for shipowners to carry out retrofit projects and make their new-build vessels ready for low carbon fuel.
Hydrogen, methanol and ammonia are emerging as low carbon alternatives to fossil bunker fuels, as they emit little or no carbon dioxide during combustion. However, as they are primarily produced from fossil fuels, their supply chains have large carbon footprints.
Ammonia, a colourless and poisonous gas, is one of the most emissions-intensive commodities, according to the International Energy Agency. Just over 70 per cent of ammonia - used mostly as fertiliser - is produced from natural gas, and most of the rest from coal.
Green or low-carbon hydrogen, methanol and ammonia can be produced with current technology, but they are expensive and require financial incentives to support production scale expansion and lower costs. Imposing stiffer penalties on emissions is another way to tip the balance in favour of adoption.
Among the three green shipping fuels, methanol and ammonia are poised to beat hydrogen, since liquid hydrogen is too bulky to carry on vessels due to its lower energy density.
"The reason why we don't think hydrogen will play a big role is that it requires tanks with 20 times as much capacity as those for existing bunker fuel, which is not feasible since you also need space for cargo and passengers," Mr Holms said. "The ratio for methanol at 1.7 times, and ammonia at 3.9 times, do not require as big a compromise on space."
China, which has the world's largest shipbuilding industry, is one of the most important markets for Wartsila, which announced a major Chinese order recently.
The company will supply five auxiliary engines for each of 12 vessels under construction - five owned by Cosco Shipping Lines and seven by Orient Overseas Container Line. They are dual-fuel engines that can combust both conventional bunker fuel and methanol.
The vessels are scheduled for delivery from 2026, and the engines will be sent to shipyards when needed.
"It is the biggest single-order for engines for methanol-powered vessels in China," Mr Holms said, adding that some 60 per cent of all new container vessels ordered globally since the start of last year are set to run on methanol.
Many shipowners are opting for engines that can burn low-emission fuels when building new vessels, which typically have a lifespan of 25 years, amid pressure from international regulations to achieve net zero emissions by 2050 and customers' growing needs for green shipping.
Last year, the UN's International Maritime Organisation (IMO) upgraded the global industry's climate ambitions, committing its 175 member nations to net zero greenhouse gas emissions by 2050. It also aims to slash emissions per unit of transport work by at least 40 per cent by 2030, compared with 2008 levels, and to boost the industry's uptake of fuels that emit zero or near-zero greenhouse gasses to at least five per cent by 2030.
Since the start of this year, ships with gross tonnage of 5,000 tonnes and above entering European Union ports have been subjected to emissions cap-and-trade quotas. Initially, free quotas are allocated, which will decline annually thereafter until they reach zero in 2034.
Imperceptibly, the regulatory world is reducing free choice to the level offered in Soviet era GUM department store in Moscow. This suits the surviving mega corporations, which all seem to be linked to State Street, BlackRock and Vanguard holding companies, which are owned by shareholders, most of whom are not entirely, but largely represented by themselves.
While they, and the few surviving shipping giants in the welter of mergers and acquisitions over the last 20 years, appreciated the existence of the free market that got them where they are today, may well think that free market capitalism has outlived its usefulness just as a demagogue might appreciate the role of free speech to get him to the heights he now occupies. But in same way he might come to think that free speech had outlived its usefulness now that he had arrived.
So those who treasure free speech and free markets must now considered who is friend and who is foe in light of these newly appreciated conditions. |
