Shipping line industry: vessel to a greener world?


The environment is still a big topic. Power is generated by renewable resources and used more efficiently, cars are emitting less greenhouse gases than before and farmers are forced to maintain soil quality. In a world where 90% of all trade happens per ship, it may come of no surprise that boats are some of the biggest polluting units. What may come as a surprise is that only 15 of the biggest ships equal the pollution of the entire car stock of the world. This pollution includes greenhouse gases but also particles that cause cancer and asthma. Those particles are estimated to lead to the premature deaths of over 14.000 to 60.000 people each year. How is this possible, why is it happening, and how can it be changed?

What is happening?
It is easy to see that the pollution from ships is different from the exhaust from cars. Smoke coming from ships is darker and thicker. This doesn’t seem totally unreasonable: the engines of ships are much larger than the ones placed in cars. The engine driving the biggest ships delivers gigantic amounts of horsepower, weighs as much as a small boat and uses as much fuel as a small power station. You might expect some high-energy fuel to power the engines. However, that is not the case. Often these engines burn the waste of refineries. The job of the refineries is to take the lighter liquids, and what is left is so filthy, toxic and sulfur-rich that it isn’t allowed to burn it on land. This asphalt-like stuff called ‘bunker fuel’ or ‘navy special’ is so thick that when it is cooled down to room temperature you could literally stand on it. Therefore, this fuel is cheap. Very, very cheap.

The container ships travel enourmous distances, both in open sea and in coastal waters. Toxic particles are exhausted from the ships and contaminate the oceans, but also have their influence on the health of people living close to shore. As said, the people who get effected by the exhaust have a larger probability to get asthma and even several forms of cancer. The image below shows the routes container ships take to travel across the globe. This image illiustrates areas of the world where ships get close to shore.

Why is it happening?
Your Christmas presents are brought to you from the far-east by a fleet of over 90.000 ships. Those ships have to be as cost-efficient as possible to reduce transaction costs. It is important that the cost per container is as low as possible. Economies of scale help to reduce costs and lead to bigger and bigger ships. This is because of the fact that when ships get bigger they can carry more containers, while the costs don’t rise as much as the benefits. The biggest ships are able to carry over 19.000 containers at the moment. Burning bunker fuel reduces costs for the shipping companies and is therefore seen as a reasonable solution.

On land, many regulations apply for cars and power plants to get a hold on emissions. Those rules have been enforced even more during the last climate summit in Paris. At the same time almost no regulations apply to naval emissions. The climate summit didn’t make notion of those emissions either, according to University of Delaware’s James Corbett. This blind spot leads to the fact that external costs are rarely paid. Most of the pollution happens in international waters where emission regulations are missing. When rules would apply, transaction costs would rise. Since shipping lines don’t make big profits due to heavy competition, the risen transaction costs would be transferred directly to the customer.
What can be done?
According to McKinsy in 2014, the profits in the shipping line industry are marginal. That is not necessarily the case. Very little has changed in running the container business since the first container was hoisted in 1956. When applying new techniques, shipping line revenues could rise by as much as 10 to 20 percent points. However, shipping lines must have the guts to adjust their way of running their company drastically.

McKinsy notes that one of the things which shipping lines fail to see is the opportunity of luxery services. Customers are willing to pay for those services but they are not supplied enough. Luxery services embody the use of cleaner fuel instead of bunker fuel. Many shipping lines treat bunker fuel as a necessary expense just to do business. Yet cleaner fuel can be advertised, thereby not only boosting revenue but also aiding the environment.

Cleaner alternatives for bunker fuel are available. Liquefied Natural Gas (L.N.G), for example, is said to be the future of ship lines. Using L.N.G. instead of bunker fuel could reduce carbon dioxide emissions by 15-20 percent. Changing to L.N.G from bunker fuel is expensive and therefore most shipping lines hesitate in using this kind of fuel for their ships. Besides, L.N.G. consists almost entirely of methane; therefore, the question is if it really makes a large contribution in reducing the greenhouse effect. What it is doing for sure is preventing the emission of toxic waste into the air. This would mean that the living conditions of many coastal areas would improve.
An addition to L.N.G. and bunker fuel could be solar energy. You probably know of solar panels powering houses and maybe you even know about solar cells powering mobile devices. A complete containership powered by solar cells might be too much asked for at the moment. There are advances made in solar cells technology but it is still impossible to fuel a complete ship on the power of the sun. The M/V Auriga Leader proves that energy withdrawn from the sun can reduce the amount of fossil fuels needed to drive the vessel. Equipped with no less than 328 solar panels, this ship can reduce its fuel consumption by 13 tons and its CO2 emission by 40 tons.

Furthermore, a lot of small improvements could lead to an enormous difference in emissions and could lead to a greener environment. A couple shipping lines use outdated software to calculate their routes. Those shipping lines are advised to use new software and thereby to introduce new algorithms to calculate routes. Less fuel-consuming routes are to be discovered, thus reducing total emissions. Another improvement would be applying a different kind of hull-paint. By using smoother painting, frictional resistance would be decreased. This leads to fuel savings of three to eight percent, which is huge!

In conclusion, reduction of emission of greenhouse gases and toxic particles will be hard and maybe even a bit painful. It is going to be tough, because of the shipping line industry being locked-in and old-fashioned. Regulations are hard to force upon the shipping industry because of the gray area which the international waters are in terms of law-enforcement. Despite of these setbacks, the transition of a heavy polluting shipping line industry into a greener one isn’t impossible. With help and a vision, the industry could get greener and even make more profits along the way.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.