Study Finds Differences In Inland Vs. Ocean Decarbonization

As you will read in this issue, a brand-new, lengthy study by Vanderbilt University for ABS has taken an in-depth look at issues involving possible decarbonization on the inland waterways. 

Even with current fuels, the inland waterways remain the greenest and climate-friendliest mode of transport. We have highlighted pioneering efforts by individual operators to reduce emissions, including the development of some zero-emissions vessels in the passenger sector, and, highlighted in this issue, the first zero-emission tugboat in the U.S. Additionally, there are plans to use liquefied natural gas as fuel in the growing container movement. 

The report’s conclusion, though, is that market incentives alone are not enough to drive complete decarbonization on the U.S. waterways. 

Globally, lower emission trends have been largely determined by regulations and the anticipation of future regulations, especially in the European Union countries. The International Maritime Organization came on board when it became clear that European countries were going to enact their own anti-carbon rules for ships.

The report says, “Decarbonizing the inland waterway sector will likely require new regulatory or market-based incentives, similar to those emerging in other economic sectors around the globe, in order to make decarbonization economically viable.”

The oceangoing sector has additional market incentives of its own not shared by the inland sector. Maritime shipping is expected to triple by 2050. Intense competition, volatility and disruption among global shipping companies, as well as fluctuations in energy costs and other factors, have led to a wave of consolidations and building of larger and larger container vessels. Market conditions have led to the scrapping of ocean vessels as young as five years old. When you are already building new for other reasons, it’s not as much of a burden to introduce a new low-emissions propulsion system, especially if it will help you compete in a regulated marketplace. 

By contrast, barge traffic has not yet returned to the levels it enjoyed prior to the 2008 recession, as the report documents. Its growth will be more modest over time. River assets can last for decades—and can take decades to amortize their costs. 

A big part of this flat growth has been the shrinking of the coal sector, and the resulting shrinking in the number of open hopper barges needed to transport energy. On the rivers, we are in the midst of a cargo transition from a less-dense form of energy (coal) to denser ones (oil, LNG). 

To balance that, the report says, the bullish U.S. agriculture export market has offset the coal decline to some extent and ensures a stable barge demand, especially since grain trips are often long, up to 1,000 miles. 

Up until now, the approach of the Diesel Emissions Reduction Act to reducing emissions has been incremental, allowing companies to spread out costs and replace dirtier engines over time. As the Vanderbilt/ABS report notes, “Operators have been … incentivized to repower and upgrade propulsion and other systems over the years rather than retire older vessels outright.”

That incremental approach has been informed by close cooperation between industry and government to ensure that clean air goals can be met without too much disruption to industry. It’s an approach that we hope continues for climate goals—especially since water transportation is already the greenest, most climate-friendly mode of transportation per ton-mile.