The ro/ro industry is facing a number of challenges when it comes to the pursuit of decarbonization and net zero. Besides finding a road to decarbonization of the vessels and themselves, there is also adapting to an emerging EV supply chain infrastructure.
The challenges facing the ro/ro [roll-on/roll-off] shipping and terminal industry are many, including emissions regulation, alternative fuels, technology innovations, an evolving market, supply chain uncertainties coupled with the drive for sustainability and net zero decarbonization.
The landscape is changing rapidly as the world attempts to deal with a post fossil-fuel reality, so uncertainties abound.
In an investor presentation early this year, Wallenius Wilhelmsen noted that despite the current economic slowdown, “we expect continued strong volumes and a tight market balance at least for the first part of 2023.” But there is “more 2023 uncertainty towards the second part of and into 2024, especially due to labor, the 2024 newbuild deliveries and any escalation of geopolitical tensions.”
Vehicle Market
Wallenius Wilhelmsen is, however, cautiously upbeat about the trends for global light vehicle sales as “more people are moving up in the middle class, (which) will lead to an increased need for mobility and more vehicle sales.”
A widespread parts shortage, port congestion and general supply and demand imbalances affecting supply chains this year are expected to abate somewhat. They were improving as 2022 ended, said Robert Berg, market analysis and finance manager at Wallenius Wilhelmsen. He stressed that they won’t disappear completely due to limited new vessel supply expected in the ro/ro segment.
The economic outlook varies from nation to nation, Wallenius Wilhelmsen said in its review. Rising energy prices, inflation and declining consumer confidence are weighing on the global economy, which is forecast to grow only modestly at about 2.2 percent in 2023, according to the Organization of Economic Cooperation and Development.
The Race to Net Zero
The company unveiled an aggressive goal of net zero emissions by 2027. The plan is to introduce zero-emission end-to-end service by 2027 featuring:
- Methanol (later ammonia); and shore power on vessels
- Battery-electric or hydrogen trucks.
- Renewables in terminals and processing centers.
The introduction of carbon-neutral service by 2024 through, for example “green certificates” for electricity; with carbon-neutral freight offered by 2024, enabled by biofuel balancing.
A platform for carbon-neutral and zero-emission offerings
There are dangers ahead due to the increasing demand for electric vehicles. Battery fires onboard ro/ro vessels are a concern as the use of electric vehicles increases, Wallenius Wilhelmsen said. “While there are regulations and best practices in place to mitigate the risks, the potential for catastrophic consequences underscore the need for continued vigilance and innovation in handling these vehicles on board vessels,” said Henrik Meyer, senior quality manager, ports, terminals & stevedoring at Wallenius Wilhelmsen.
To mitigate the risks of fire, logistics and shipping companies, including Wallenius Wilhelmsen, have implemented strict regulations and best practices for handling electric vehicles. They regulate the state of charge (SOC) of all batteries, and only accept vehicles with a desired state of charge of 50% or lower, preferably below 30%.
There is a growing call for industry-wide best practices and standards for alternatively fueled vehicles and electric vehicles, particularly for deep-sea voyages. The International Maritime Organization (IMO) has established a task force to address these challenges and is expected to focus on safety and handling of electric vehicles.
Collaboration and digitalization are watchwords for the ro/ro industry. Here are some developments:
- Alternative fuels: Ro/ro companies and associated terminal industries are exploring the use of alternative fuels, such as liquefied natural gas (LNG), biofuels, and hydrogen, to reduce their carbon footprint. For example, Swedish shipping company Stena Line has invested in the development of vessels powered by methanol and battery technology.
- Energy efficiency: Ro/ro shipping companies are investing in energy-efficient technologies to reduce fuel consumption and emissions. This includes the use of advanced hull designs, air lubrication systems, wind energy, and waste heat recovery systems. Terminal operators are implementing energy-efficient equipment, such as electric cranes and automated guided vehicles, to reduce emissions at the port.
- Digitalization: The industry is embracing digitalization to optimize operations and reduce emissions. This includes the use of data analytics, artificial intelligence, and the Internet of Things (IoT) to improve route planning, vessel performance, and cargo handling.
- Collaboration: Ro/ro shipping companies and terminal operators are increasingly collaborating with other stakeholders, such as governments, technology providers, and research institutions, to develop and implement innovative solutions for reducing emissions. For example, the Getting to Zero Coalition, a partnership between the Global Maritime Forum, the World Economic Forum, and Friends of Ocean Action, aims to accelerate the development of zero-emission vessels and fuels.
- Carbon offsetting: Some companies in the ro/ro shipping and terminal industry are investing in carbon offset projects to compensate for their emissions.
IMO and Ro/Ro
The International Maritime Organization (IMO) has set a target to reduce the shipping industry’s greenhouse gas emissions by at least 50% by 2050 compared to 2008 levels.
In a related development, one of the first shipping companies in the First Movers Coalition, Höegh Autoliners, committed to running at least 5% of its deep sea shipping on zero-emission fuels by 2030, enabled by ships capable of using zero-emission fuels.
FMC said if enough global companies commit a certain percentage of their future purchasing to clean technologies in this decade, this will create a “market tipping point” that will accelerate their affordability and drive long-term, net-zero transformation across industrial value chains. All FMC members must deliver their commitments by 2030.
Andreas Enger, CEO of Höegh Autoliners, said the line is committed to addressing the long-term transportation needs of major original equipment manufacturers (OEMs) by establishing lasting relationships with customers in its core trade networks.
Enger said the introduction of the environmentally friendly Aurora Class vessels in coming years will offer clients the industry’s “lowest carbon footprint.” Joining FMC is a “decisive step on our path to zero and our ambitious target of being carbon neutral by 2040,” he noted.
Through the Aurora program, “We firmly believe we will be able to meet or exceed the aim of having 5% of our deep sea operation on carbon neutral fuels.” It is a definitive step in Höegh’s commitment to a net zero emissions future by 2040, Enger said.
The 82-member First Movers Coalition was launched during COP-26 in Glasgow in November 2021 and was initiated by the US State Department, through Special Presidential Envoy for Climate John Kerry, and the World Economic Forum.
