Globally, shipping accounts for 15 percent of N0x emissions, 8 percent of S0x emissions and 3 percent of greenhouse gas (GHG) emissions, while aviation accounts for just 1.5 percent of GHG emissions. Overall, emissions including GHG are increasing with booming trade and industrial activity, and policymakers are facing mounting pressure to deal with the crisis.

SEE ALSO: The Changing Waves of the Shipping Industry

Urgency of Clean Air

Experts found that in 2015, 6.5 million people died prematurely as a consequence of air pollution, with 92 percent of the deaths occurring in developing countries such as India, China, Pakistan, Bangladesh, Madagascar and Kenya. In these countries, up to 25 percent of all deaths are pollution related. In India alone, 2.5 million people died from pollution, China saw 1.8 million pollution-related deaths and even in the U.S., more than 155,000 deaths were linked to air pollution.

In China, fog-like smog covers cities. (Source: South China Morning Post)

As a result, governments and international organizations all over the world started implementing environmental policies under growing pressure from well-informed citizens. For example, China has shut down a number of factories across the country and has policies in place to heavily regulate emissions as part of their “Beautiful China” initiative. Also, the International Marine Organization (IMO) announced it will tighten the international sulfur cap for shipping emissions from the current 3.5 percent to 0.5 percent by 2020.

Such initiatives are great first steps, as making the switch to cleaner marine fuels such as low-sulfur fuel will lead to 137,000 fewer premature deaths caused by air pollution and 8 million fewer cases of childhood asthma. However, with increasingly stringent environmental regulations, the shipping industry is eyeing more sustainable and renewable fuel options.  

Liquified Natural Gas

Currently, the most common and feasible option available for minimal emissions is liquified natural gas (LNG). Many shipping companies are embracing this option ahead of IMO’s 2020 emissions cap as LNG emits zero S02 and particulate matter, and up to 25 percent less C02 and up to 90 percent less N0x.

As a result, major oil companies are channeling their resources towards LNG production and manufacturers are opting for LNG-powered ships to lower their life cycle emissions. However, the downside to LNG as shipping fuel is that LNG tanks require more space on vessels. They also add considerable weight, meaning the vessel will use up more fuel.

LNG is the most feasible option for shipbuilders and manufacturers looking to lower emissions. (Source: Oil Industry Insight)

This is where steel can play a vital role in equipping shipbuilders with the lightest and strongest material options. This year, Hyundai Mipo Dockyard will build the world’s largest LNG-powered bulk carrier capable of yielding 50,000 tons of cargo, which is seven times more than existing LNG carriers. The company chose to build their vessel using POSCO’s High Manganese Steel, which is lightweight, tough, super strong and is able to facilitate the storage temperature of LNG at -162℃. Not only that, the steel is also cost effective when compared to other material options for ships.

SEE ALSO: POSCO’s High Manganese Steel to be Used for the World’s Largest LNG-Powered Bulk Carrier

Renewable Energy

Another company making exciting waves in the shipping industry is Eco Marine Power. The technology company is developing an alternative energy solution called Aquarius Marine Renewable Energy that will allow cargo ships to run on wind and solar energy. Rigid sails and solar panels will be placed on the exterior of cargo ships to directly generate and store energy and energy levels can be monitored via a computer-based system. This year, researchers are planning to put the system to the test with a Japanese shipping company to monitor the system’s performance, energy generation and the vessel’s energy consumption.

Eco Marine Power will put its energy solution to the test this year. (Source: Eco Marine Power)

Last year, Chinese shipping company Hangzhou Modern Ship Design & Research Co launched a cargo ship powered by an electric battery powertrain. The 2000-ton capacity vessel runs on two 160 kW electric propellers, supercapacitors and lithium batteries that provide a range of about 80 km per charge. For now, it is being used for short trips to carry coal up and down the Pearl River in Guangdong Province, and at each end, the vessel only takes about 2 hours to charge.

China launched the world’s first fully-electric cargo ship. (Source: China Minutes)

Again, the challenge for companies experimenting with renewable energy options will be dealing with the additional weight of generators and battery packs. The feasibility of sustainable cargo ships lies in the vessel’s energy efficiency, and heavier vessels will take up too much energy. As 90 percent of all trade goods cross the sea at one point in their life cycle, it will be impossible to decrease shipping activities. Instead, manufacturers will have to partner with solutions providers like POSCO for high-performing, lightweight materials to achieve clearer skies and a future of green shipping.

Cover photo courtesy of Global Economic Dynamics.

The U-Shaped Relationship

However, the argument is not so black and white according to Spyridon Stavropoulos, Ronald Wall and Yuanze Xu’s Environmental regulations and industrial competitiveness: evidence from China. The study suggests that the relationship between stringent economic regulations and industrial (or economic) competitiveness is U-shaped. Meaning, initially, stringent regulations will increase the cost of production and make companies less profitable, but after a certain turning point, companies will be forced to adapt and innovate, thus becoming more competitive in the long run.

Many activists sit on both sides of the debate. (Source: Ethical Shopper)

When regulation policies are consistent over a long period of time, companies are forced to tackle the root of the problem, instead of focusing on meeting certain numbers. In today’s global economy, many governments have already begun to implement stringent economic regulations that only look to get tighter in the future. In such a context, companies that choose to innovate and come up with solutions to global pollution problems will come out more competitive in the end.

Sustainability Equals Competitiveness

Looking at major economic players around the world, it’s safe to say that environmental sustainability is a common topic on each of their respective national agendas. Pressing national challenges are tied to the environment in one way or another. For example, many countries are shifting their policies to ensure energy security. Countries that import most of their energy from external regions are subject to volatile prices and thus unstable economies. Thus, governments are actively supporting companies that can cultivate domestic, renewable energy sources. Another, more obvious, example is the direct link between pollution and health risks.

China is the fastest developing country in the world, and by 2035, it will be responsible for 28 percent of the total global energy demand. China also happens to be almost completely dependent on energy imports. Subsequently, the government has started a variety of government programs to boost sustainability as part of President Xi Jinping’s pledge to build a “Beautiful China”. These policies also come in the wake of shocking statistics: in 2015, pollution led to 1.8 million premature deaths in China.

Chinese President Xi Jinping laid out a 2-step plan to achieve a “Beautiful China.” (Source: News Gru)

Sustainable Steelmaker

Even with strong government commitment and plenty of programs to support sustainable business, most developing countries lack affordable renewable energy sources and the technology to apply those sources to existing production processes. Nevertheless, the world is changing and only those that adapt and innovate survive and thrive. That’s exactly what POSCO did starting back in 2007.

FINEX: A Game Changer

POSCO came up with a new molten iron production technology called FINEX. The technology allows molten iron and non-coking coal to be produced directly in a blast furnace during the iron-making process. It is different from the conventional blast furnace process, as it combines the coking plant, sinter plant and blast furnace into a single iron-making unit. This lowers production costs and reduces harmful emissions.

FINEX is a sustainable game-changer for steel production.

Ultimately, FINEX is one of the most cost-effective and eco-friendly ways to make steel. The technology mitigates the use of C02, has the lowest process-related emission rates and preserves resources through the use of a wide range of iron ores and non-coking coals. FINEX reduces SOx and NOx emissions by 40 and 15 percent respectively, and fine dust particles can be reduced by 34 percent compared to traditional blast furnaces. Furthermore, the by-products from the process generate highly valuable export gas that can be used for various purposes like electric power generation or natural gas substitution.

On December 7, 2017, POSCO reached 20 million cumulative tons of molten iron production using the FINEX technology. POSCO is not the only company enjoying the benefits of sustainable competitiveness – POSCO’s manufacturing partners can see lower emissions levels when evaluating the entire life cycle of their products.

SEE ALSO: POSCO Reaches 20 Million Tons of Production Using FINEX Technology

Sustainability is no longer just jargon. As environmental issues are intricately tied to the economy and even national security, governments around the world will be actively supporting sustainable companies in the years to come. Companies can expect sustainability and competitiveness to become interchangeable terms in the near future.

China

A worker at Tarim Basin, the largest oil and gas-bearing basin in the People’s Republic of China. (source: Eco-Business)

China, as a developing industrial nation, emits one of the highest levels of carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxides (NOx) and primary PM in the world. In 2013, it experienced the PM2.5 Crisis, and the government showed strong political will to battle air pollution with its Action Plan outlining ten goals to reduce air pollution by 2017. Fueled by anger from Chinese citizens over air quality, Beijing continues to heavily regulate air pollution as outlined in their 13th Five Year Plan (2016-2021), including the goal to have “good air quality day” readings for 80 percent of the year. It’s not all just talk in China, there is now no maximum monetary penalty payable for noncompliance, compared to the previous RMB 20,000.

The European Union

The European Environment Agency oversees the EU for environmental regulations (Source: Climateurope)

Air pollution regulations in the European Union (EU) are overseen by the European Environment Agency (EEA), which declared air pollution the number one environmental health risk in Europe. Most of the harm comes from vehicle and industry emissions. The EEA identified 5 key pollutants: nitrogen oxides (NOx), non-methane volatile organic compounds (NMVOCs), sulphur dioxide (SO2) ammonia (NH3) and fine particulate matter (PM2.5). The EU set an emissions ceiling for its member nations to abide by from 2010 to 2019, and all but five countries are below that ceiling today. To add, as many as 5 member nations thus far have pledged to completely ban diesel and gasoline-fueled cars in the coming future.

Korea

Korean President Moon Jae-in talks to a crowd of people in Korea (Source: South China Morning Post)

With a new administration under President Moon Jae-in, Korea is committed to international environmental goals as a G20 member as well as making changes at home. Just last month in June, the government closed down a coal-fired plant that had been in operations for more than 30 years. Coal-fired plants are one of the major contributors of PM2.5, and the government has imposed new laws that ban the construction of new plants and encourage a general transition to natural gases. President Moon stated he will work to increase the natural gas market share in electricity production from 19 percent to 27 percent by 2030.

The government’s resolve to clean up the air affects coal-fired plants and plants using fossils fuels. The steel industry primarily uses such fuels and the need to find greener production processes is more urgent than ever before.

For POSCO, one of the biggest steel producers in Korea, efforts began back in 2007 when they jointly developed an iron-making process called Finex® with Primetals Technologies. The traditional way to produce iron is through a blast furnace which emits harmful substances into the air. The FINEX® Process combines coking plant, sinter plant and blast furnace into a single iron making unit, thus reducing production time, saving costs and resulting in drastically lower emission rates. With Finex®, sulfuric acid output was reduced by 60 percent, nitrate by 85 percent and scattering dust saw a 29 percent reduction. Even the byproduct of the iron-making process is an export gas that can be used for various purposes.

POSCO continues to strive to become an environmentally sustainable company with innovative material solutions, the application of AI (artificial intelligence) and IIoT (industrial internet of things) in their smart factory and their eco-friendly lithium extraction and rechargeable battery production. Such efforts have been recognized by the Corporate Knights which ranked POSCO 1st in metals and mining and 35th overall for their 13th annual Global 100 list of sustainable companies in 2017. Also, the Dow Jones Sustainability Index recognized POSCO for its sustainable management policies for 12 straight years.

The significant majority of leaders do agree on the need for collaboration to battle air pollution. Global citizens have growing concerns about environmental health risks such as PM2.5, and in response, many governments are enforcing tighter regulations and penalties on production companies. Companies now more than ever need to invest in new technologies and innovations for a greener world and bluer skies.

Cover image source: g20.org

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