Interview: Poul Woodall, Director of Environment & Sustainability at DFDS, Talks Emissions, Environmental Regulations and LNG

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September 24, 2018

Photo: DFDS

Interview by Paul González-Morgan (Marine Strategy) – Poul Woodall is Director, Environment & Sustainability at DFDS A/S, with over 40 years of international shipping experience, Ro-Ro and passenger segments. Poul specialises in environmental compliance, ensuring the conformity with the changing laws and regulations, with a focus on meeting and exceeding industry standards for DFDS.

Please talk to us about your main functions at DFDS A/S as Director, Environment & Sustainability:

DFDS is today a pan European logistics company providing mainly maritime and road transport solutions to industry and the general public. The transportation industry in its current form, will by nature have a certain environmental and climate impact. My main responsibility as Director, Environment and Sustainability is really two fold. Firstly I need to ensure that we, as an organisation, comply with all relevant regulations – national as well as international. The second priority is, in conjunction with the relevant business unit managers, to set targets for where DFDS wants to be with respect to environmental performance over and above the legal requirements. A lot of the day to day work involves ensuring we have all the relevant data and are on target for the goals we have set ourselves. An important function is also to supply customers and other business partners with environmental and climate data they request. We see a growing interest from our customer base to only work with companies that have an active and ambitious policy on reductions.

How far is the gap between political intent and actually reducing CO2 emissions in shipping?

This is a very difficult question to answer, as in reality we do not yet know what this gap is. IMO decided both for the 2030 ambition of minimum 40% reduction in CO2 per transport work and the 2050 ambition of minimum 50% reduction of GHG emissions to use 2008 as the base year. We have however yet to see what this base line actually is. The 2050 ambition of absolute reduction, will probably be relatively easy to agree on. The IMO 3rd GHG study contained such data for 2008, unfortunately there were two figures, one based on a top-down calculation and one based on a bottom-up calculation. On this target we are rather fortunate to only have two figures to choose from, so I foresee this will be relatively easy to agree which one to use.

A lot more discussions on the 2030 ambitions may be foreseen. First of all, with this target we are only talking CO2 not GHG, but more importantly it introduced the term “transport work” which is not well defined in IMO. The discussion on this will have to centre around two topics. What is a realistic measure for this that can be agreed upon and do we have the 2008 data for this? Data that will enable us to establish the 2008 baseline? During the MEPC discussions on the “IMO fuel oil data collection system” (DCS) it was not possible to agree on a metrics that included actual cargo work. Therefore a proxy for this, in terms of the vessels DWT, had to be chosen. This tells me that consensus at MEPC cannot be reached on any measurement that includes actual cargo data. This will be unfortunate and erode any meaningful onward discussion. Should I be proven wrong and MEPC actually agrees to use actual cargo work, then the next question arises – can we establish a reliable figure for this for 2008? I doubt it.

A topic that has largely gone unnoticed so far, is the true effect of these IMO ambitions. By nature, IMO regulates shipping and with respect to GHG we are specifically talking about international shipping. If we were to take in the full impact of shipping’s environmental foot print, we would need to look at a lifecycle scenario and not least the upstream element of the fuel supply. Let me give you an example. Some biofuels have a very low GHG impact, but the positive element is in the upstream part of the chain. GHG from the combustion of biofuels is not much different from that of fossil fuels. So if we end up only measuring and legislating on a “tank-to-propeller” basis only, we miss out on an obvious opportunity.

In your view, what measures are needed to meet the IMO’s CO2 emissions target?

We need to distinguish between the 2030 and the 2050 targets. Here, clearly the 2050 target will be the most challenging. We will not reach this unless there is a major shift away from fossil fuels. This also means that within the next 10-15 years we have to start building ships on a bigger scale with non-fossil fuel propulsion. With regards the 2030 targets, it will as mentioned, depend on the metrics that can be agreed upon, but I am relatively confident that existing technologies may get us there – in fact we may already be beyond the 40%.

In terms of Sulphur Oxide (SOx) emissions, is the industry on target for 2020?

They better be. I am not among the ones who believe there is even the slightest chance the date will be moved or the compliance terms “relaxed”. The carriage ban on non-compliant fuel is due to come in to effect in Q1 of 2020 and this will provide flag and port state authorities a valuable tool in policing this. Perhaps not all countries will be equally prepared to police by 1.1.2020, but those countries with existing experience will be looking at a vessels recent history – also outside of national waters. This should ensure a high degree of control. We will not see 100% compliance and the FONAR system may be misused by some. Overall I am however confident that the system will work and compliance level will be high.

A big unknown here remains what will the 0.50% fuels look like. How to we handle these onboard the ships and not least what are their commingling features that we need to take in to account. We know very little about these produces as of now and I expect that a large portion of the compliant fuel post 2020 will be regular 0.10% gasoil.

Can the environmental goals of the IMO be achieved whilst maintaining competitive freight prices?

The answer to that question will depend on the specific segment. 100,000 tons of ore cannot be moved from one side of the planet to the other unless by ship and the transport cost represents a small fraction of the total price, even if fuel cost increases. On the contrary when moving a container or a trailer in shortsea trades or indeed small parcels of liquids and bulk, one may be competing with road or rail transport. However let’s not fool ourselves, in 2050 the main competition for some transport products may come from a source we do not even know today.

What are the main three actions the maritime sector should implement to improve on carbon footprint?

If you look back over the past 10-15 years you will note vast improvement in efficiency within the industry. I admit this has mainly been driven by aspirations to reduce cost, but it has had a positive effect on GHG as well. The efficiencies have been achieved by a series of small improvements combined with building ever larger ships. The efficiency improvements will continue, but have certain vessel segments reached their maximum size? … and don’t forget large ships are only efficient if they are fully utilised.
What is really needed is a lot more research into renewable fuels and/or CO2 capture. This cannot be done on the company level, but needs to be driven by governmental institutions preferably the IMO.

As a fuel alternative, is LNG the solution?

LNG offers a lot of benefits, depending of the problem one needs to solve. With its low SOx and NOx emissions it may be beneficial to combat air pollution in and around urban areas. I do not see LNG as a viable long term fuel for climate reasons. Methane is a potent GHG and when looking at the entire logistic chain only a small slip can generate more GHG per energy unit than coal. We also need to look at this in a time perspective. Normally we talk about global warming potential (GWP) over a 100 year period. Here methane is a factor 26-32 more potent than CO2. If we however are concerned about GHG emissions over the next 20 years, the multiplier for methane is more like 86.

Please name one objective you would like to achieve in 2019:

That we can agree on a GHG measurements, that considers the wellbeing of the planet and not only satisfies a more or less artificial mathematical formula.

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