16 January 2024 (Lloyd's List) - HAPAG-LLOYD, the world's fifth largest containership operator, has set itself a target for its vessel fleet to be climate-neutral by 2045, five years ahead of International Maritime Organization targets.
While that might seem ambitious, the company also has an an interim target to reduce the carbon intensity of its owned vessel fleet by 30% by 2030, as part of an exercise launched in 2022, dubbed 'The Fleet Upgrade Programme'.
The Hamburg-headquartered company's managing director of fleet, Capt Richard von Berlepsch, spoke to Lloyd's List about progress of the programme so far.
"We set ourselves very clear company targets to reduce the International Maritime Organization's Carbon Intensity Indicator by 30%, compared to 2019, by 2030, which would translate to an Annual Efficiency Ratio of 60%," Capt von Berlepsch said.
"This is more than legally required but we believe that it is workable, if very challenging.
"We have done a lot of analysis about how to achieve this and how to get there. Alternative fuels won't be available in the amount required. In view of that we have to focus on emissions reductions."
Hapag-Lloyd's fleet upgrade programme is concentrated on four "levers" to achieve the company's aims.
"The first lever is based around older, less fuel-efficient vessels for which it makes sense to replace them with more efficient vessels. We are looking at plans to order more newbuildings as we potentially face a huge replacement wave of vessels."
In 2023 Hapag-Lloyd consigned three mid-1990s built, winterised and ice-strengthened containerships for recycling in Turkiye. The company inherited the high fuel consumption vessels via the integration of the CP Ships fleet, which Hapag-Lloyd’s then-parent company took over in 2005.
They were the first vessels to have been sold by the company for recycling in over three years, however there remain several 1990s-built vessels still operating in Hapag-Lloyd's fleet which could be scrapping candidates in 2024.
The company's current newbuilding programme comprises 12 dual-fuel LNG mega-containerships, which were ordered from South Korean shipbuilder Hanwha Ocean in 2020. The lead ship from the series, the 24,000 teu Berlin Express was delivered in June 2023. Two more vessels from the programme have since entered service, with the remainder set for delivery in 2024 and 2025.
"Lever number two relates to younger vessels that are inefficient across all size segments, but where their age means it doesn’t make sense to sell or recycle them," Capt von Berlepsch said.
This second lever is based on the retrofit of existing ships with more modern technology and involves either reducing engine power, exchange of propellers with more efficient systems, increasing container capacity or bulbous bow replacement.
Capt. von Berlepsch said that smaller ships provide the biggest problems for the second lever as it is not possible in some cases to increase their capacity.
Lever two is the largest programme so far and has involved 27 vessel capacity upgrades and the exchange of 31 propellers. Furthermore, 18 ships have had bulbous bow replacements, optimised for far lower service speeds than the vessels were designed for.
A further 50 container capacity upgrades, 93 propeller retrofits and 35 bulbous bow replacements are planned between 2024 and 2027.
Capacity upgrading can include the raising of on-deck lashing bridges and even increasing the height of the accommodation block to permit the stacking of up to two more layers of containers on deck.
Hapag-Lloyd has undertaken this process to increase capacity of seven 8,000 teu containerships built a decade ago by an additional 1,000 teu. The work was undertaken at repair yards in Europe over the past few months during routine special survey drydockings.
The capacity upgrade included cutting the vessels' deckhouse below the navigation bridge and inserting a prefabricated section to raise the height of the bridge by some 5.5 metres. Deck lashing bridges were also increased in height to take account of the increased height of the on-deck container stow.
At the same time, the seven ships were fitted with new, energy-efficient, propeller systems able to provide fuel savings in excess of 5%. On a per-teu carried basis, the increase in capacity and the propeller upgrade is claimed to reduce fuel consumption by 15% on average.
Retro-fittings have been undertaken at a number of shipyards in Europe, the Middle East and Asia.
"We always need repair yards at the end of a voyage so that vessels are empty but retrofits are preferably undertaken in cheaper locations. For larger ships, retrofitting is undertaken in China where there are sufficient drydock facilities."
"Lever number three to reducing CII and AER relates to reducing service speeds. We as a shipping line believe that vessels will continue to steam slower in the long term.
"However, this factor is not solely within our power - the market must move down in speed and I believe we will see services slow down even further. Lever three is one of the cheapest measures as it requires no investment. Most shippers prefer it if their cargo arrives on time rather than arriving one day faster."
Capt von Berlepsch believes that large vessels operating in the Asia-Europe trade could reduce service speed to as low as 12 knots from current averages of 15 knots to 16 knots. This, though, was before the crisis in the Red Sea required some ships to speed up due to Cape of Good Hope diversions adding up to 10 days to east/west transit times.
"The fourth lever is the most important lever in view of our ambitions for 2045 which is based around alternative fuels. There is no way to avoid alternative fuels if we look towards 2045."
Hapag Lloyd has four ships in service capable of operating on LNG, including the retrofitted 15,000 teu Brussels Express, which re-entered service as a dual-fuel LNG vessel following a $13m retrofit programme in China.
The company is working on a joint project with containership tonnage provider Seaspan, which provides a number of vessels to Hapag-Lloyd against long-term time charters, to investigate the potential for methanol-fuel retrofits; "But there is a lot of pre-work that still needs to be done".
"There is also some very interesting technology that might seem completely off the path. This includes nuclear power but this won't appear within the next 10 years."
Due to the zero carbon footprint of nuclear power, Capt von Berlepsch said not to investigate the potential of nuclear-powered containerships would be a mistake.
"Ammonia fuel is some years ahead but the engine technology is already there, this is not the magic part. The magic part is the sufficient supply of the fuel itself and that is the pain point."
Capt von Berlepsch does not believe enough focus is being placed on the production of ammonia and methanol for the maritime sector.
"It's not getting moving for the required amount, although we can't voluntarily run this fuel. Our customers have to be willing to pay - as long as the price gap is large it can only be done with proper alignment. I have not yet met anybody who doesn't want as clean a fuel as possible but they don't want to pay extra for it.
"On the other hand we have fuel producers that say if you don't buy we won't invest in production".
