Solvang towards the future
Solvang’s Annual Efficiency Ratio development
Decarbonization: the race is on
IMO’s new GHG reduction strategy puts world shipping on the line. Solvang has carefully prepared to lead the upcoming race.
Solvang’s ECO gas carriers showcase the achievements of systematic efforts, when relentlessly pointed at operations, design and technology. The effects in terms of reduced energy consumption and emissions coincide with the international strategy to curb global heating and mitigate climate change. In 2023, IMO revised its greenhouse gas strategy to reduce emissions by 20 to 30 % by 2030, by 70 to 80 % by 2040, and to fully eliminate net greenhouse gas emissions from international shipping by 2050.
The following statement is based on Solvang’s actual AER (annual efficiency ratio) from 2009 to 2023 in the vessel categories A-E.
Well-to-wake limitations
Systematic efforts pay off, but the potential carbon cuts are naturally limited within a well-to-wake perspective.
The available carbon free sources like e-fuels processed from renewable electricity cannot possibly fuel the transport of the world’s goods. If we are not to create a mercantile nuclear-powered fleet, an alternative is to look at onboard CCS (carbon capture and storage, OCCS).
In 2023, Solvang moved from lab testing to sea application of full-scale OCCS, after receiving a specific grant of MNOK 80 from Norwegian authorities. The project onboard Clipper Eris is the first in its kind world-wide, as it enables regular bunker operation with carbon emission reductions well above 70 %.
In combination with a scrubber, an exhaust gas recirculation system, wet electrostatic precipitator and the other parts of Solvang’s ECO LPG carrier programme, an all-out emission elimination is no longer pure imagination. The race towards decarbonization of deep sea shipping is on.
CCS Joint venture
Parties: Solvang ASA and Wärtsilä Norway AS, with support from vessel charterer Marubeni Corp.
Goals:
• To demonstrate that CO2 can be captured and stored as liquid CO2 in deck tanks;
• To gain real experience of operation of a shipboard CCS plant;
• To reduce energy consumption;
• To reduce cost (CAPEX/capital expenditures and OPEX/operating expenses);
• To explore maintenance requirements;
• To identify possible buyers of the captured CO2
Scope:
Modification of existing EGC (exhaust gas cleaning) installation to incorporate a particle filter (WESP), during Q4, 2023:
• Testing of WESP unit;
• Installing CO2 absorber and stripper units and associated peripherals, by Q3 2024;
• Modifying the existing liquefaction system and deck tanks to accommodate liquefaction and storage of CO2;
• Testing of the CCS system to optimize the operation and gain operational experience;
• Provide input to regulators for development of a coherent and practical set of rules for CCS onboard ships.
Solvang 2025/2030 target
EEXI-recertificated CII-factor for all vessels. Full compliance with the IMO reduction target adjusted for 2025.
Ethylene (E and H-class) vessels AER rating
The average AER has changed from 14.8 (2022) to 13.73 (2023). The current fleet average rate is C in 2025, but corrected for a more “normal” trading pattern and the effect of the modification of the last vessel, the average could be a B rating (AER between 12 and 13).
The rest of the H-class has undergone the same upgrade in 2023.
Anticipating continuous 2% reduction in target AER, and simulating E-class and modified H-class up to 2020, the fleet average rate will be B up to 2026 and C up to 2030. Hence, our ethylene fleet will score far better than the required AER in 2025 and also be in compliance in 2030.
Ethylene fleet
Solvang’s AER (efficiency indicator) shows that our ethylene fleet already delivers a 36 percent reduction compared to the reference year 2009. Based on this assumption, vessels operate in the same pattern with continued focus on improved operational procedures, best practise and maintenance, giving us reason to believe that even our existing ethylene fleet will score better than the required efficiency ratio in 2030. The uncertainty factor relates to the IMO reference level.
LGC fleet AER rating
AER improves from 8.5 to 8.1 from 2022 to 2023, and the current fleet average rate is C in 2025. With full effect of the upgrade in 2023, the average is B. The challenge is idle time. Compared to the IMO 2019- 2026 reduction target, the 8.1 value corresponds to a B-rating in 2025 and minimum compliance in 2030. Six of the LGC vessels dry-docked in 2023. 2024 will fully demonstrate the effect of modifications in this class. In 2023, the vessels had a relatively high fuel consumption due to the end of antifouling lifetime.
Assuming continued 2% reduction in target AER from 2026-2030 (see figure under rules and regulations), the LGC fleet average will require 7.38 in 2030. Based on the EEXI certification and installation of Mewis Ducts on the rest of the LGC fleet, our LGC vessels operate in the same pattern with continued improvement of operations, best practice and maintenance. As a result, our LGC fleet will be in IMO compliance also in 2030.
VLGC fleet AER rating
The AER improves from 7.4 to 7.0 from 2022 to 2023, yielding a good C-rating in 2025, even close to B. One vessel is sold. Compared to the IMO 2019-2026 reduction target, the 7.44 value corresponds to a C-rating yielding compliance in 2025 without any further measures.
Three VLGCs were dry-docked in 2023, giving full effect in 2024 for the two vessels remaining in Solvang’s fleet. The last one has been sold.
Assuming continued 2% reduction in target AER from 2026-2030, the VLGC fleet average required in 2030 should be < 6.56. Due to CII requirements, not the EEXI certification, speed for some of the vessels in 2030 will be limited to 15.5 knots. In 2023 average speed was about 16 knots.
Summary 2030
With the assumption given above and upgrades, the current Solvang fleet will be fully AER/CII compliant in 2030. Depending on the IMO revision scheduled for 2026, some adjustments could be expected.
Solvang 2050 target
Net zero-emission operation of deep sea shipping according to the revised IMO GHG Strategy. Solvang will implement radical green measures through our Clipper Future programme.
Clipper Future aims to design vessels to comply with future regulations while sticking to a reasonable writeoffschedule. The scope is cost-effective and smart technical solutions to work in a well-to-wake framework. Based on this, all our newbuilds delivered from 2013 follow our vision.
GHG-neutral fuel
In order to comply with IMO GHG emission targets, we need a zero-carbon fuel. Except from a small amount of biofuel, such fuel is not available in any amount needed today. As for zero-carbon fuel, the challenge is to avoid energy and cost intensive processing which today leads to substantial losses. The price factor is 4 to 10, compared to standard fossil fuels (IMO 4th GHG study 2020).
Pertaining to standard fuels, a well-to-wake approach is crucial to avoid GHG emissions shifting from shipping to oil power plants
or coal-burning facilities.
GHG-neutral fuel: Electro-fuel
Artificial fuel processed from air, water, and renewable electricity. According to recent investigation it is good reason to anticipate that renewable electricity would be a limited resource the next decades. The fundamental challenge are that even if the world allocate all renewable electricity in the word to produce e-fuel it would not be enough to fuel deep sea shipping with green ammonia.
This is a challenger shipping cannot solve alone. For this reason, it is difficult to see that e-fuel would be available in more than small amounts in the next decades. The challenge would be the availability of the e-fuel not the actual use of it.
Onboard CCS
Solvang expects our onboard carbon capture (OCCS) project to signal how the world fleet could make use of this technology. Combined with biofuel and/or electrofuel with CO2 from air as well as CO2 permanently stored beneath the sea floor, GHG figures could become negative.
Another option is artificial fuel processed from air, water, and renewable electricity, often named e-fuel.
Carbon offset
While all GHG emissions cannot be avoided, high quality emission reduction projects can be used for compensation in a carbon offset scenario. A market for carbon quotas is currently open, trading CO2 cuts to a lower price than using alternative fuels.
Future regulations
The conditions for future ship design and fuels will manifest itself through rules and regulations not yet defined. The industry expects tighter regulations on emissions to air other than CO2, particularly SOx, NOx, CO, THC, and particles. This poses technological challenges, as reduced NOx outlets normally correspond with increased GHG outlets. As an example, TIR III requires
an 80 % NOx reduction compared to TIR II. This is not achievable on a diesel engine by means of engine design and adjustments.
Even costly modifications to bring down NOx emissions would result in higher GHG outlets, possibly ruling out compliance with other parts of the regulatory framework. The conditions for future ship design and fuels will manifest itself through rules and regulations not yet defined. At the same time, charters will go to the lowest bidder, whether transporting LPG, petchem, ammonia or other gasses. In this perspective we assume that transport expenses in the future will rise.
Design criteria for Clipper Future
All vessels ordered today need the possibility to operate on GHG-neutral fuel. At the moment, there is no alternative to our two-stroke directly driven main engines for propulsion.
We project 100 % cut by 2050 in a scenario with a mix of CCS and e-fuel, comparing total annual GHG emissions to 2008, on Solvang vessels running OCCS, fuel efficiency exceeding 50 %, and the option to modify for all fuels operation. The following examples illustrate that all foreseeable solutions today would be GHG-neutral when using biofuel or e-fuel, without modifications.
Technical fuel specifications
The specific choice of fuel for Clipper Future would be made after careful evaluations of the alternatives above, which are currently projectable in terms of commercial operation, environment, technology, and operational expenses and revenues.
More alternatives are expected to arrive, some more or less radical, like wind assistance or air lubrication of the hull. They should all be considered in due time. As for now, Solvang focusses on fuel optimization plus OCCS for optimal flexibility. In the future, given sufficient supply of GHG-free electricity, we will deliver CO2 to the bunker barge, and in return receivee-fuel produced by our captured CO2.
In line with technical specifications for vessels, we stick to the Solvang ECO vessel design, including the optimization of hull lines, cargo intake, cruising range, propeller/rudder design, heat recovery and others.
