OSG looking into carbon capture
Overseas Shipholding Group (OSG), a major American shipping company, has launched efforts to explore the potential of carbon capture and storage as part of its GHG emission reduction strategy.
To that end, OSG has established a new subsidiary, Aptamus LLC in Delaware, which will focus on investing in carbon capture, utilization, and storage (CCS) technology to help reduce greenhouse gas emissions. The new company plans to partner with other businesses to promote and develop this emerging technology.
The initiative has been supported by OSG’s board of directors, who have committed capital to evaluate and potentially invest in CCS technology. The value of the capital investment has not been disclosed.
However, installing CCS technology on a ship poses several challenges. These include determining the space and energy requirements for the system, ensuring safety considerations are met due to the handling and storage of compressed gases, and navigating complex and varied regulatory challenges.
Despite these challenges, OSG voiced commitment to exploring the potential benefits of CCS technology adding it was actively seeking partnerships and opportunities to invest in the field. The company believes that this technology could play a significant role in reducing greenhouse gas emissions, not only for OSG but for the broader global community.
Nevertheless, the high costs associated with CCS technology mean that careful evaluation is essential before any investments are made.
For the time being the company is only using low-sulfur fuel oil and is planning to switch to renewable fuels once they become available at a larger scale.
The shipowner said it was also evaluating sustainable alternatives for fuel to power its ships, including the use of biofuels. That being said, OSG noted it was mindful of the potential unintended consequences of some biofuels, such as deforestation, and was working with industry regulators to revise current calculation methods to account for the use of biofuels and the well-to-wake approach when calculating a vessel’s carbon footprint.
In the meantime to bolster its fleet efficiency, OSG has invested in a digital platform for voyage optimization, reduction of boiler consumption, and optimization of engine performance.
The shipowner said that digital performance monitoring has helped its vessel Overseas Martinez to optimize engine performance and save over 300 metric tons of fuel in 2022 – equivalent to reducing nearly 1,000 tons of carbon dioxide or the emissions produced by 200 cars in a year.
Another investment area is anti-fouling measures to improve hull performance. OSG said that it has trialed hull grooming robotics on two vessels resulting in up to 5 percent hull performance improvement.
OSG has also invested in commercial blasting of the hull of the Overseas Long Beach to bare steel to remove layers of accumulated antifouling paint. The fresh application of antifouling paint onto a smoother finish surface reduced hull friction and a reduction of ~ 7% in CO2 emissions per mile run.
Finally, commenting on the IMO’s Carbon Intensity Indicator (CII) formula, OSG joined other ship owners and industry groups in pointing to the flaws in the formula and called for revisions to present a more accurate measure of CO2 emissions.
“The current formula illogically rewards longer voyages, which produce more carbon emissions, and penalizes ships which take short voyages, which produce less carbon emissions. The formulas should also consider the “well to wake” impact, and not unfairly penalize operators for waiting time, fuel consumed when cleaning, or performing work while underway,” OSG said.
OSG is also pushing to incentivize charterers to work with owners to make decisions that reduce fuel consumption and improve CII ratings.
Under the current CII regulations, charterers are not incentivized nor held accountable to achieve positive CII ratings, instead leaving the burden of CII compliance solely with the owners and operators.
Working in partnership with owners to make decisions on weather routing and vessel speed, and to minimize time at anchor to reduce the burning of fuel while idle will result in reduced in-port emissions, more efficient fuel consumption, and better CII ratings, OSG said.