Published on 18 Apr 2024
Johan Lillieskold
Gas Solutions Specialist, Schulte Group
Carbon Capture and Storage (CCS) is a safe and efficient way to handle emissions and meet climate targets. And it offers beneficial opportunities for the shipping industry in gaining new business and reducing its own carbon footprint, Johan Lillieskold, Gas Solutions Specialist at Schulte Group, is convinced.
Published on 18 Apr 2024
The Schulte Group is part of the Northern Lights project developing the world’s first cross-border CO2 transport and storage infrastructure ©BSM
Throughout the past years, the pressure to decarbonise the world economy has been severely increased, not only by the public, but also by international legislation. For energy-intensive industries, low-carbon or carbon-free energy sources are at the top of the list to meet the emissions reduction commitments. “However, it is no secret that methanol, ammonia, hydrogen etc. will not be available in sufficient quantities, especially not green supply, to meet the demand,” emphasises Johan Lillieskold, Gas Solutions Specialist at Schulte Group. “The battle for scarce and truly renewable resources has already begun.”
With that said, Lillieskold is convinced that Carbon Capture and Storage (CCS) is becoming increasingly important in the future. During the CCS process, CO2 is separated from gas mixtures such as chemical process streams, exhausts, or even air, and is subsequently permanently stored. The captured CO2 is compressed and pumped deep down into the subsurface - for example offshore - to isolate the greenhouse gas from the atmosphere. “This will be a significant accelerator for the decarbonisation of industries where CO2 emissions are process-related, such as cement production, or where fossil fuels cannot easily be replaced by renewable electricity, such as iron and steel production,” the gas expert believes.
Governments all over the world started enacting policies to support the CCS development as safe storage of CO2 is a proven technology. For decades, energy companies have injected pressurised CO2 into reservoirs to displace oil and drive it to the surface. Numerous initiatives and projects have already been launched. There were approximately 265 projects, on- and offshore, in the commercial carbon capture and storage facilities pipeline worldwide in 2023. Some operational, some under construction, but the majority in an advanced or early development.
Lillieskold, “This evolution also opens up new opportunities for the shipping industry.” As large quantities of CO2 need to be transported from the capture site to storage, Liquid CO2 (LCO2) carriers will become an important link in the value chain. Rystad Energy, an independent research and business intelligence company, predicted that as offshore carbon storage projects expand, a fleet of at least 55 LCO2 tankers will be required worldwide by 2030.
Europe is at the forefront of the LCO2 shipping market due to its ambitious climate targets and investments in CCS projects. One of the most recognised projects is Northern Lights, a joint venture of Shell, TotalEnergies and Equinor. Northern Lights is developing the world’s first cross-border CO2 transport and storage infrastructure. The company will transport liquefied CO2 from capture sites to an onshore receiving terminal in western Norway, before transporting it by pipeline for permanent storage in a reservoir 2,600 metres under the seabed.
The Schulte Group is part of the Northern Lights project. Its ship owning arm Bernhard Schulte ordered its first CO2 tanker in December 2023. The newbuilding, which is scheduled for delivery in 2026, is committed to a long-term time charter agreement with Northern Lights, who has already ordered three identical sisterships.
The Schulte Group has thus entered an innovative future tanker market segment at an early stage. “We believe CCS will be an important contribution to decarbonise the world economy,” says Lillieskold. “CO2 is a very challenging product, but we have decades of experience in gas transport and thermodynamic science. Even it is yet a niche market we expect a growing potential in this specialised CCS decarbonisation industry for upcoming and future liquid CO2 transportation.”
CCS not only offers business opportunities, but also the possibility for shipping to reduce its own CO2 footprint. Onboard carbon capture is the maritime version of land-based CCS technology to capture carbon dioxide emissions from ships during operation. It involves capturing CO2 from exhaust gases, separating it, and storing it onboard for eventual offloading.
“The competition for green energy sources will be fierce, not only within maritime but also with other industries, and hence expensive,” says Lillieskold. He believes that onboard carbon capture can be an effective decarbonization measure that enables the continued use of established maritime fuels.
There are currently no market-ready systems, but some manufacturers are already at an advanced development stage. Finnish Wärtsilä per example is poised to pilot its onboard carbon capture and storage system. It should be capable to extract greenhouse gas at a rate of 70%. The company has mentioned 2025 as the target for having a product ready to sell.
With CCS infrastructure in development, using capture technology on ships may become an essential element in the decarbonization of shipping. Lillieskold, “And, as we know, this also has an economic aspect as carbon taxes are increasingly burdening the industry.”
So far, neither the EU nor the IMO have recognised onboard carbon capture as a compliance purpose in their regulations. But that might change in the future, and this is already being considered. Per example, the forthcoming FuelEU maritime regulation, which is due to come into force from 2025 to promote the use of renewable and low-carbon fuels in maritime transport, does not yet recognise onboard carbon capture as an option for FuelEU compliance. But it will be included in the Revision for future assessment and consideration because the technology needs to be demonstrated.
“There are therefore justified expectations that onboard carbon capture might become one part in the future CO2 reduction measure mix,” concludes Lillieskold.
Johan Lillieskold
Gas Solutions Specialist, Schulte Group
ContactJohan Lillieskold
Gas Solutions Specialist, Schulte Group
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