Q&A: Alexandra Ebbinghaus, Manager of Decarbonization, Shell Marine
(Article originally published in Sept/Oct 2023 edition.)
A leading expert on alternative energies and decarbonization in shipping explains why there is no silver bullet and what the path forward looks like.
Tell us about yourself – your background and education.
I’m German, grew up in Germany and – after my A-Levels – decided to study Mechanical Engineering at the Ruhr University of Bochum. I also spent a year at the University of Sheffield as part of the Erasmus student exchange program (partly to improve my English) before staying on there to complete a Ph.D. in Mechanical Engineering.
Around that time I began working for Shell and became interested in Economics as well. This led to a Master’s degree in Business Economics from the University of Hagen, which gives me a unique combination of engineering and business.
What inspired you to become an engineer?
I’ve always loved how it sits in the center between science and mathematics. I considered studying physics and math but chose engineering because of its practical applications and the variety of challenges it presents. My father was a great influence on this as an engineer himself, and he opened my eyes to the opportunities it offered. Of course, in Germany, engineers are also highly regarded, which made it even more appealing as a discipline.
Tell us about your role as General Manager for Decarbonization. What does it entail?
Across Shell, we have our Low Carbon Solutions business area, which aims to develop decarbonization solutions – including hydrogen and biofuels – for various sectors. Looking specifically at shipping, we can see that there is no defined, single route to decarbonization.
It’s not about providing one specific solution, so what we do is evaluate the options available to the sector. This means exploring the different fuels required as well as the wider context of how we make them commercially viable at scale. What does the policy environment look like? How does financing work? What do the existing and incoming regulations mean for business?
All of these questions play a role in shaping shipping’s decarbonization. It’s a case of distilling all of that into a strategy that identifies and supports the development and implementation of solutions that meet our customers’ needs.
Shell and Deloitte recently released “All Hands on Deck 2.0,” a blueprint for shipping’s decarbonization. What are its main recommendations? How can shipping get to net zero by 2050?
Looking back to the first “All Hands on Deck” report that we published in 2020, we worked with Deloitte to really understand what decarbonization meant to the shipping sector. What are the challenges? Where are the opportunities? This analysis culminated in 12 areas for businesses to focus on when exploring decarbonization.
The second version of the report is a temperature check on the first report. We’ve gone back to our key stakeholders to assess what’s happened over the last two to three years – where developments have happened, what’s worked, what hasn’t. There are clear indications that the market and customer demand for decarbonization solutions is growing, and there have been positive developments on the regulatory side. However, the progress on infrastructure development and the clarity around the roles of different players has seen less movement.
In the report we’ve identified six key actions that can help shipping accelerate its journey towards achieving its net-zero ambition by 2050. From scaling demand to building regulatory momentum, we must build on the progress that has already been made while helping businesses make the investments that can decarbonize their operations.
The key thing for me is that you can never address the whole of the problem without addressing all the different parts of it. It’s not easy to be a shipowner because there’s so much uncertainty. People are looking for examples of where these solutions work and how they can make the business case for decarbonization.
You have famously remarked that there is “no silver bullet” when it comes to carbon reduction and getting to net zero and that it will require a “mosaic of different fuels” to get there. What are some of those fuels and the costs/benefits of each?
Yes, the challenge is that the existing fossil fuels that shipping uses are energy dense, widely available and economically viable. To replace them with alternatives with reduced greenhouse gas (GHG) emissions, you need to work towards matching those three properties.
But when you look at the alternatives, each option has some disadvantages. Look at biodiesel, for example. It’s the easiest to switch to because it’s a drop-in solution for fuel oil, but it’s not currently available in the amount that shipping needs. You can start with it, but it’s not the long-term solution.
That means looking at other options like liquefied natural gas (LNG), methanol, hydrogen-based fuels or battery-electric propulsion – although each of these is not applicable to all types of shipping. Also, a few of them are still in development, leaving LNG and methanol as the primary options with which you can build and run a vessel today.
The bottom line is that the fuel situation is complex. Different segments and operators will need to explore the options and understand how each solution can contribute to meeting their operational needs – especially deep-sea shipping, which cannot be treated as one homogenous segment. The common characteristics of each segment must be identified to allow prioritization and tailoring of solutions.
What’s your take on methanol and hydrogen as part of the fuel mix?
Methanol has an advantage over other alternatives in that it’s a liquid fuel. This means that shipowners can often feel more confident in handling it compared to cryogenic fuels like LNG and hydrogen. Bunkering methanol can be easier as it’s possible to repurpose existing infrastructure. It could also be more cost effective to retrofit a vessel for use with methanol, making it an attractive early choice for decarbonization.
However, it has a major disadvantage. It’s not as energy dense as fuel oil or other alternatives, making it more expensive than LNG. In fact, it can take more than twice the amount of methanol to provide the energy businesses are currently used to with fuel oil. Hydrogen shares the same challenge. It requires a lot of space to deliver the energy that operators need to power their vessels.
Both methanol and LNG could offer pathways to net zero through bio and synthetic versions, and the situation currently is finely balanced. They both have their pros and cons, and you can’t say that – for all segments and operators – methanol is better than LNG or the other way around.
Tell us more about Shell’s role in the energy transition.
Shell sees the need to tackle climate change as an urgent challenge, which is why it has its own target to become a net-zero emissions energy business by 2050. This means reducing emissions from our own operations and from the fuels and other energy products we provide for our customers across different sectors.
We know we can’t achieve this target alone. We must work with businesses and organizations across the shipping ecosystem and other sectors to create the environment for change. As I’ve said, there’s no silver bullet. Shipping as a sector will need to develop solutions, create new infrastructure and implement effective regulations to make it possible for businesses to decarbonize in an economically sustainable way.
As a leader in the energy space, we have an important role to play in supporting these changes – and helping businesses make them as quickly and as effectively as possible.
How does LNG fit into all of this?
LNG has been around for longer than many people realize. The main driver initially was to reduce sulfur, and this gave us the opportunity to develop LNG as a marine fuel – along with the bunkering infrastructure. Its ability to deliver reduced GHG emissions made it a natural choice when working with businesses to create pathways to net zero.
As mentioned, one of the advantages of LNG is that it could provide pathways to net zero through bio- and e-LNG. Shell has signed LNG agreements with the likes of CMA CGM, ZIM, Anglo American and Hapag Lloyd.
What is the E.U.’s proposed Emissions Trading Scheme (ETS)? How will it work and when does it take effect?
The scheme has been around for a while in other sectors but comes into force for shipping in 2024. It basically works to reduce the tank-to-wake CO2 emissions generated by vessels by putting a price on those emissions. It does this by setting a total cap on the emissions an operator can generate – one that will get lower over time to drive further emissions reduction.
So operators can either work to bring their emissions under the cap or they can purchase allowances from other businesses who have already done so. This helps to incentivize investment in lower-carbon technologies because, if you aren’t using your full emissions allowance, you can sell the remainder to another business.
Ultimately, all businesses will need to reduce their emissions, but this offers greater flexibility in the short term while making sure reductions happen where it’s economically viable..
As both a scientist and business professional, you are uniquely qualified to point the way forward. Where do you see shipping – and the world going – in the future on the road to net zero? Are you optimistic?
I think the upcoming COP 28 will be interesting as a stock take on where we are regarding the Paris Agreement. We’ve already seen a technical assessment that highlights how far behind the world is in addressing climate change. While it shows that progress is being made, it also shows there is still a lot to be done.
Having said that, in shipping there’s a huge opportunity for progress that we can be optimistic about. We need further regulation and action from the IMO. This must be driven by everybody.
What do you like to do in your spare time?
I have two horses, so most of my spare time is spent looking after them and horse riding. I do race them from time to time, but my specialty is dressage, which is all about precision (and probably speaks to my engineering background!).
Thank you for your time. Any final thoughts for our readers?
Yes. While we talk a lot about the challenges, and there are plenty to overcome, I think it’s important to recognize that things are developing. As that happens, you’re always going to hear more about the difficulties involved.
We’re in the process of fundamentally changing a system, so no wonder it can seem overwhelming. The key is to keep faith though. There is movement, and we are working towards a future where decarbonized shipping is the backbone of global trade.
Jack O’Connell is the magazine’s Senior Editor.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.