Can the cruise industry exist in a net-zero world?

Coppell spoke to edie for Net-Zero November

“As a technically complex and energy-intensive sector, our industry doesn’t yet have all the solutions that will enable us to meet our net-zero 2050 target.”

That is the opening of MSC Cruises’ “planet” section of its annual report, which details how the organisation plans to meet an ambitious target to decarbonise and reach net-zero by 2050, a feat that is far beyond the current International Maritime Organization (IMO) target of a 50% reduction in emissions by 2050.

It is universally understood that a net-zero world will be different from today. Eating habits will be different, consumerism and consumption will evolve to embrace reuse and some sectors, such as oil and gas, will either need to adapt or die.

Transport will also be subject to a disruptive net-zero transition. Much has been made about a need for a “frequent flyer” tax to cut down on climate-wrecking plane journeys, but what of global cruise liners? Can these behemoths, a combination of ship and settlement, ever be part of a net-zero future?

MSC Cruises is the largest privately held cruise company globally and the company’s sustainability director Linden Coppell believes the company, and the sector, can step up to the net-zero challenge.

“I’ve really seen a transition within the industry from ‘this is all too hard and difficult for us’ because it is a unique industry, to, ‘how can we apply new technologies and solutions to really drive change?’” Coppell tells edie.

“At the senior management level, they’re feeling more comfortable about setting these ambitious targets because we can see there’s a light at the end of the tunnel and that net-zero is worth striving for.”

Cruises fall into the shipping sector, but their impact on the planet is much more nuanced and niched than what many businesses will need to deal with.

Ships need to meet the wastewater and freshwater needs of passengers, have a robust waste collection and disposal process in place, using and retaining heat, reducing air, water and noise pollution as the ships carry out their journeys. Cruise ships are not just boats, they’re small settlements – a cluster of hotels – out at sea and sustainability means fitting vessels with the technology and trained staff to account for all of these intricacies.

Coppell and MSC are trying to step up to this multi-layered approach to decarbonisation.

The company spent much of last year conducting advanced energy efficiency trials on its flagship ship, MSC Grandiosa. The trials, which combine on-board ship commands and behaviours with shore-based advice and expertise, have delivered an 8% reduction in emissions intensity compared to its design performance.

MSC has turned to the low-hanging fruit, such as LEDs and electrical improvements, alongside more advanced optimisation of hydrodynamic performance through propeller re-blading and drag reduction measures to further reduce energy demand.

Between 2008 and 2019, the company’s carbon intensity has been reduced by 28%, but the pandemic has meant it has been unable to track further improvements across its existing fleet. The company’s sustainability report does suggest that it will meet the IMO intensity ambition of a 40% reduction by 2027 – three years earlier than the industry target date of 2030 set by the IMO and adopted as a goal by the Cruise Lines International Association (CLIA).

“These ships have got to last us for at least 30 years,” Coppell adds. “So we’ve got to make sure that they’re fit for purpose, and one way to do that is to really drive the energy efficiency piece. It’s going to be much harder when we’re talking about the transition to zero-emission fuels, so we’ve got to marry the technologies with those that are readily available.

“We’ve got a fairly sizable hotel sitting on top of our vessels, so there are extra solutions to consider. There’s nothing off the table right now when it comes to looking at different technologies.”

Ambitions and action

Questions will be asked as to whether the sector’s targets are ambitious enough to coincide with the need to meet net-zero, especially as passenger demand bursts past pre-pandemic levels.

The CLIA states that the industry will eventually surpass pre-pandemic levels of passengers and revenue in 2023, with a 12% growth above those levels estimated by 2026. Companies operating within the sector will need to try and balance this short-term passenger boost with immediate decarbonisation actions, rather than pointing towards that long-term North Star of net-zero by 2050.

Luckily, there is plenty for the sector to sink its teeth into in the short term. The Marine Pollution Bulletin found that a large cruise ship’s carbon footprint is equivalent to around 12,000 cars. The same study also found that some cruises can produce emissions across a seven-day voyage that is equal to an average European citizen’s entire annual carbon footprint.

Coppell states that there is “very much a growing confidence” internally that net-zero emissions can be reached by 2050, but that short-term reductions in emissions will be crucial if cruising is to be seen as a “viable industry”.

“We’re looking at biofuels for our existing ships and LNG as a transitional fuel,” Coppell adds. “But whatever we do it’s got to have a much lower carbon profile so that in the coming years, even as new ships come in, we’ll be able to reach a steady state of emissions that then go down across the sector.

“We don’t know when that date is going to be, but we know we have to act now to do that and in order to be a viable industry.”

Coppell lists numerous collaborative efforts that MSC has embarked on to try and deliver groundbreaking projects focused on decarbonisation.

In 2020, for example, the company collaborated with energy solutions provider SNAM and ship builder Fincantieri on hydrogen supply and bunkering requirements. The aim of the project was to create a green hydrogen-powered cruise ship. MSC is facing huge technical challenges to make this vision a reality, namely safely accommodating hydrogen on board and creating a reliable supply for maritime use, but the company remains committed to a target of operating a hydrogen-fuelled cruise ship before 2030.

Additionally, MSC launched a Decarbonisation Strategic Partnership with Shell to focus on shipboard technology for energy efficiency, digital solutions, future fuels and fuel cell technologies.

While Coppell notes the internal desire in both setting and meeting the net-zero goal, the MSC sustainability lead also notes that the sector is upping its requirements that is forcing many to focus on energy efficiency.

The IMO has set more stringent requirements through its Energy Efficiency eXisting ship Index (EEXI) and Carbon Intensity Index (CII) standards. EEXI is a one-off measure of design performance for existing vessels, and CII is an annual operational efficiency measurement, which becomes increasingly stringent over the years. It comes into force in 2023.

Coppell reveals that MSC’s newest ship, including the Seashore and Virtuosa are “expected to be approximately 15-25% lower than the targets set by the IMO,” and that all new ships are expected to meet the IMO Energy Efficiency Design Index (EEDI) which increases in stringency every five years. Indeed, the Virtuosa – an LNG-powered cruise ship – has a design performance that is 40% more efficient than the EEDI requirements.

The Virtuosa is fitted with hybrid exhaust gas cleaning systems (EGCS) and catalytic reduction systems (SCR) that, according to MSC, can achieve a 98% reduction of sulphur oxide (SOx) emissions and a 90% reduction in nitrogen oxide (NOx) emissions.

Doubts persist as to the ability of both gas cleaning systems and LNG, even as a transition fuel while companies focus on longer-term solutions like hydrogen. The CLIA, for example, claims the EGCS are used by 76% of global cruise ships, while the use of LNG is growing and can cut emissions by around 25%. However, the International Council on Clean Transportation warned that while LNGs can cut emissions, they can actually have a worse impact on the planet, due to methane leakage.

For Coppell, this is just another example that there are no one-size-fits-all solutions to the sector’s challenge. But one thing is clear, policy will help push the sector towards decarbonisation.

“I think we’re seeing a lot more pressure on the industry and it will be regional regulations that are going to start driving more to move towards cleaner and more efficient ships,” Coppell says. “We are considering the expectation of our guests, of course, but the regulatory environment is really driving change.

“But, we need to be careful that we are treated fairly compared to other industries, because otherwise you get a competitive distortion issue where some fuels and solutions aren’t being made available for the sector, so it is important to engage too.”

So the future is likely to be turbulent. At COP26, the shipping industry created a joint voice that showcased its willingness to decarbonise and reach net-zero by 2050. However, the IMO’s Marine Environmental Protection Committee (MEPC 77) has failed to create progress across its 175 member states. With no agreement in place to increase ambitions beyond a 50% reduction in emissions by 2050, or to introduce a ringfence R&D fund, how will companies within the sector respond?

“The solutions we invest in now are going to have a cost, but it is going to be a greater cost the less we act,” Coppell adds. “So the more we can drive the efficiency piece now, the easier the journey is going to be in the long run. So we’re going to be reviewing every opportunity for our new and existing fleet.

“We need to make sure that we make ourselves viable for the future and the main way of doing that is making sure that we can find solutions that work for us, both now and in the long-term.”