Decarbonising the Maritime Supply Chain

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1 Decarbonising the Maritime Supply Chain Professor Alan McKinnon Logistics Research Centre Heriot-Watt University EDINBURGH, UK International Energy Agency, Paris 18 th June 2010

2 Greenhouse Gas Emissions from Shipping 3.3% of greenhouse gases today 15 30% in carbon constrained world of 2050 Forecast growth of CO 2e from ships (with 33 50% increase in fuel efficiency) 1bn 2.4bn bn Source: UK Committee on Climate Change 2008 Projected growth in CO2 emissions from shipping in different carbon price scenarios

3 Distribution of CO 2 Emissions among Vessel Types

4 Carbon Emission Factors for Shipping

5 Variations in Carbon Intensity of Deep sea Container Lines (gco2 per TEU Km) weighted average 92.5) Source: Clean Cargo / BSR

6 Expansion of Deep Sea Container Vessels Shanghai to Felixstowe (UK) CO 2 emissions per TEU Average deep-sea container ship 1998: 4.8 tonnes Emma Maersk: 1.2 tonnes Supply Chain Management Institute / Price Waterhouse Coopers

7 Technical Improvements to Improve the Energy Efficiency of Ships Source: NYK Combined effect: 36% improvement in fuel efficiency

8 Sources of Energy Saving in Shipping Hull design Improved cargo handling time Hybrid propulsion Exhaust-heat recovery Turbocharger Wind pressure reduction Engine performance monitoring Other % energy saving Source: NYK

9 69% reduction in CO 2 per container carried relative to current average container ship NYK Super Eco Ship 2030

10 Retrofitting Energy Saving Equipment Wind Support (Sky Sail) Use of giant sail: 10 35% reduction in fuel consumption. MS Beluga SkySail Streamlining Hull with Micro bubbles 100m tanker 7m draught 14 knots 10% drag reduction 4% net energy saving

11 Summary of Previous Research on Decarbonisation of Shipping previous research focused on ship and engine design and maritime operating practices strong supply side bias UK Low Carbon Commercial Shipping Study: 4 most promising opportunities Marine engine improvements Switch to biofuels Supplementary use of skysails Better fleet management State of the art ship in % 35% less carbon intensive than typical in service ship in 2008 Long life / slow replacement rate for ships Fuel / CO 2 penalty in reducing other emissions, esp. NOx CO 2 reductions from technology / improved ship design unlikely to offset rapid growth in maritime freight httraffic Reinforce with various fleet management options: Slow Optimised steaming to routing save fuel slow steaming Maersk study shows it is possible to cut engine speed by 50% without damaging the engines 10 30% fuel and CO2 savings 100 Maersk vessels have been slow steaming since 2007 Primarily for economic reasons during the recession environmental benefit a welcome bonus

12 Decarbonising the Maritime Supply Chain New 2 year research project funded by the UK Engineering and Physical Sciences Research Council maritime supply chain = door to door freight delivery containing at least one sea movement Examining carbon reduction opportunities from the shipper s perspective Focus on movement of deep sea containers Scope includes port feeder movements port operations container loading supply chain structure consignment routing choice of carrier scheduling of deliveries Scope excludes ship design, operation and fuel type

13 Research Objectives Assess the extent to which the carbon intensity of maritime supply chains is currently affected by the logistical decisions of shippers Identify opportunities for shippers to take tk a more active role in decarbonisation initiatives Establish the data requirements of shippers seeking to monitor and manage CO 2 emissions i across their maritime supply chains Model the potential CO 2 savings from six decarbonisation initiatives either led or approved by shippers: Switch to lower carbon transport modes for feeder service Switch to carriers with lower carbon intensity values on feeder and deep sea services Improving container loading both on export and import consignments Rerouting of containers to minimise CO 2 emissions from feeder and deep sea services Reconfiguring supply chain to exploit backloading potential on sea container services Adjusting logistical schedules to accommodate longer maritime transit times Includes case study of the Scotch Whisky Industry

14 Conceptual Framework

15 Improving Container Fill Case of UK Retailer ASDA Improved deep sea container fill Filled an extra 70,000 cubic metres 1200 fewer container movements annually

16 Boots / Maersk: Carbon Reduction on Inbound Movements from Far East CO 2 per cubic metre (cbm) reduced by 29% between 2004 and 2007 kg CO2 / cb bm % reduction 54.0 Carbon emissions (kg per cubic metre) Carbon reduction strategies Reduction of cbm by air Reduction of kg / cbm by air 20 Increase in container utilization 10 Reduction in terminal handling

17 Boots / Maersk: Carbon Reduction on Inbound Movements from Far East Cost per cubic metre reduced by 21 % 21% reduction Cost per cubic metre USD/cbm Cost reduction strategies Reduction of air usage Increase in container utilization Reduction in terminal handling without initiatives 2007

18 Published March 2010

19 Contact details Logistics i Research hcentre Heriot Watt University EDINBURGH UK

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