Get our latest features in your inbox
Join our community of business leaders
Industry View from
The need to tackle climate change and reduce pollution has never been more important. Much recent focus has been on road vehicles but, with around 90 per cent of the world’s trade in goods transported by ships, it’s increasingly evident that tackling maritime emissions is essential, particularly in international waters, where no single country has jurisdiction.
The shipping industry is responsible for around 14 per cent of the world’s sulphur emissions – the main factor in acid rain – and it’s estimated that air pollution from ships will contribute to more than 570,000 premature deaths over the next five years if not tackled, according to a report submitted to the International Maritime Organization (IMO) by the Finnish government.
It’s this which has led the IMO to introduce new regulations, coming into force in 2020, which will overhaul the industry and how it operates. From 1 January 2020, the limit for sulphur in fuel oil used by ships operating outside designated emission control areas will fall to 0.50 per cent m/m (mass by mass), from the current limit of 3.5 per cent, requiring most ships to reduce their sulphur oxide emissions by up to 85 per cent. Nitrogen oxide emissions will also need to fall by up to 80 per cent. Penalties for non-compliance will be tough, with captains and chief officers risking jail terms and heavy fines and ships liable to banning orders preventing them from sailing.
Up to now, options for ship owners to reduce sulphur emissions have been limited. One is to switch to fuel with a lower sulphur content, but this is expensive. According to Goldman Sachs, the increase in fuel cost for the global fleet will be around $250 billion a year, and it’s expected that prices for compliant fuel will rise as demand increases. Availability of fuel is also likely to be an issue, and it’s possible some ship owners will initially find themselves unable to comply if they cannot source suitable fuel.
Some firms have turned to open-loop scrubber systems as a solution. This involves installing exhaust gas cleaning systems to remove sulphur oxides from the engine and boiler exhaust gases, meaning ships can continue to use heavy fuel oil.
But this has attracted criticism as the process results in waste water containing pollutants being discharged directly into the ocean where a lack of UV light means these pollutants are unable to break down, leading many ports to ban the practice in their waters.
Another option for the mid-term is to invest in new models with engines which use sulphur-free fuels, such as liquefied natural gas (LNG).
Now, though, a new solution is available which enables ship owners to significantly cut down on harmful emissions and comply with the new IMO regulations, while ensuring their legacy fleets can continue to use more economical heavy fuel oils.
Daphne Technology: an Aramco Energy Ventures portfolio company
SulPure, created by Lausanne-based Daphne Technology, extracts nitrogen and sulphur oxide emissions by passing exhaust fumes through a number of stages. First, a pre-conditioning unit removes particulate matters, reducing carbon monoxide emissions by 99 per cent. Next, a purification unit generates reactive species that reduce sulphur emissions by 99.3 per cent and nitrogen emissions by 85 per cent.
The nitrogen extracted from the process is released harmlessly into the atmosphere, while the sulphur is collected and made into ammonia sulphate – an agricultural fertiliser which can be sold by ship owners to farmers, creating an additional income. “It’s exactly the same as you find in normal centralised production of fertiliser,” says Mario Michan, the company’s CEO. “There’s no waste or toxic pollutants going into the ocean or the earth. Quiet simply it removes the sulphur and does something beneficial with it.”
The process of fitting the SulPure system is also significantly shorter than implementing an open-loop scrubber, taking between four and seven days. It requires only access to the chimney, rather than the engine room, and does not involve water, meaning the ship does not need to be taken into a dry dock.
Installation cost is around 50 per cent lower than typical scrubber systems, adds Michan, and the return on investment is around 12 months as a result of anticipated lower fuel costs. In fact, Daphne Technologies believes that if every vessel affected by the new regulations were fitted with SulPure, the billion cost referenced earlier would fall to around $20 billion.
Daphne Technologies is currently developing a prototype which will be tested and then submitted for certification, but has already lined up a number of pilot agreements with vessels in the Baltic.
Michan believes the new technology will bring about a feasible and relatively low-cost and low-hassle solution to the challenges posed by the new IMO regulations, and do so in a genuinely environmentally friendly way. “Ship owners really care about sustainability and we offer a full closed-loop solution which adheres to IMO 2020, and is financially attractive,” he says. “We’ve put a lot of effort into looking at the end-of-life cycle of our components. That’s the only way to create a sustainable fleet, and ultimately a viable industry in the long-term.”
In January 2019, Daphne Technologies attracted funding from Saudi Aramco Energy Ventures (SAEV), the corporate investment arm of integrated energy and chemicals company Saudi Aramco. SAEV invests in early-stage and high-growth companies in markets such as upstream and downstream oil and gas, petrochemicals, renewables, energy efficiency and water.
SAEV’s investment in Daphne Technologies is part of a wider commitment to being an active participant in the energy transition by supporting early-stage technology companies that develop solutions reduce greenhouse gas emissions and pollution.
“The shipping industry is a lifeline of global trade,” says Hans Middelthon, Managing Director of SAEV Europe Ltd. “However, shipping is a major pollutant contributing to climate change. We are working to help the industry reverse this trend, and through our investment in Daphne Technologies, we are supporting a young company seeking to address this global and imminent challenge head on.”
Join our community of business leaders