How will Hapag-Lloyd make its fleet climate-neutral?

Climate-neutral and competitive
There is a lot of uncertainty in the industry about the fuel of the future. Several are being discussed, such as ammonia and methanol – but two favourites are already emerging. “At the moment, ammonia isn’t an option in container and passenger shipping, as the safety concerts are still simply too great,” Dyck explains. “The course has already been set for methanol and LNG. And that’s the direction we will be heading in soon. But we will also need to remain competitive. Methanol costs three times as much as compliant fuel, meaning fossil fuel with a low sulphur content. And we won’t be able to shoulder the costs for climate-neutral propulsion on our own.” Silke Muschitz, Senior Director Fleet Management, agrees with this assessment, adding: “I believe that we, as a society and consumers, will be – and will have to be – more and more willing to bear additional costs for sustainable transports.”

Lower CO2 emissions with carbon capture?
Another possible way to reduce emissions would be to use so-called carbon capture and storage (CCS). “Carbon capture could definitely have a future in shipping, as we will still be using fossil fuels for some time to come,” says Christoph Thiem, Deputy Head of Strategic Asset Projects. “The challenge will be storing the captured CO2 on the ships.” To which Dyck adds: “If we want to transport containers competitively, we can’t store much CO2 at this time.”

Although there are several other possibilities for climate-neutral propulsion, this doesn’t mean that all of them can be implemented in practice. “People often think that a technology which works on a small scale only needs to be scaled up to be usable in shipping,” Thiem notes. “But this often doesn’t work in reality. A problem isn’t solved just because someone gives the green light in an Excel spreadsheet. For example, you have to be aware of just how much green electricity would be needed to produce climate-neutral fuel to propel container ships.”

Efficiency remains relevant
“There are a lot of questions on the technical side,” Eljardt says. “For one thing, even in the longer term, there won’t be enough sustainably produced biofuel available to meet, for example, only with this fuel the decarbonisation targets that we have set ourselves.” Even if a way is found to power the ships in a climate-neutral way, this doesn’t mean that efficient and energy-saving construction can be ignored. “In fact, the opposite is the case,” Thiem points out. “Even before we switch to a carbon-neutral fuel, we will have to do everything we can to use as little of it as possible. An enormous amount of effort and expense will be associated with these fuels. So we will continue to optimise our existing fleet, such as by combining retrofitting and modernisation measures with an increased focus on consumption-optimised ship operation.” Among other things, this will involve slow steaming and the efficient execution of voyages.

Training for seafarers
In addition to her Fleet Management role, Muschitz is also responsible for the seafaring personnel at Hapag-Lloyd. “No matter which fuels we use in the future, the crews will have to be trained in how to handle them,” she emphasises. “We are currently providing thorough training to a lot of seafarers for the dual-fuel ships with LNG propulsion. But they lack practical experience with it. So far, we only have one ship that runs on LNG. And the next ones will only be delivered in 2023.”

Since our seafarers will play a crucial role on our path to climate neutrality, Hapag-Lloyd must ensure that they are committed to the cause. “Whether they are just starting their careers or about to retire, our seafarers will have to embrace these efforts,” Muschitz says. “The dual-fuel ships will have to be manned by crews specifically trained to sail with an LNG system.” Given these circumstances, it will not be possible to quickly switch to using engines running on ammonia or methanol. In addition, since no guidelines exist for training seafarers on how to handle these kinds of engines, no crews have be trained to do so. Nevertheless, Muschitz is certain that it will be possible to prepare our seafarers to properly handle the fuel of the future, saying: “We need to train the crews in a timely manner so that our seafarers are ready to go when we have the new propulsion system.”

Despite the many challenges, everyone agrees that it will be possible to operate Hapag-Lloyd’s fleet in a climate-neutral way by 2045 – and that not doing so is not an option. “The fact is that we are experiencing dramatic climate change, which will pose a problem for generations to come,” Dyck says.

International regulations
To support the decarbonization of the shipping industry, the International Maritime Organization (IMO) has introduced new CII regulations that will enter into force for all ships on 1 January 2023. The Carbon Intensity Indicator (CII) measures how many grams of CO2 are emitted per nautical mile sailed and in relation to cargo-carrying capacity. Ships will be classified on a scale from A to E depending on the calculated rating. However, Hapag-Lloyd – along with the maritime industry as a whole – still sees some need for improvement. “The basic idea is good, but the implementation will be insufficient to guarantee a meaningful assessment of the efficiency of the transport task,” Eljardt explains. “The data sets and assessment criteria of the IMO DCS database are still too imprecise. What’s more, it still isn’t clear what the concrete consequences will be for those ships that aren’t able to operate in compliance with the specified limits. We especially think that smaller ships sailing in trades with fewer infrastructural resources will have problems meeting the requirements.”

Nevertheless, everyone agrees that the CII rules will make sense in the long run. “There will be changes to make the CII rules fairer and to get us to a situation that everyone can live with,” Eljardt concludes. Adding to this, Dyck says: “One positive aspect of the new environmental rules is that they will encourage companies to take old, inefficient ships out of service because it will no longer be worth it to operate them. In the past, old ships always just changed owners. Every step in the right direction is better than standing still.”