Businesses across the Great Lakes region are recognizing the importance of acting now to limit the impacts of climate change on this unique ecosystem where we live and work. As a primary user of our waterways, the Canadian shipping sector has a leadership role to play in putting in place meaningful actions to protect our environment. Although shipping is already the most environmentally friendly mode of transport, producing less CO2 per tonne/km when compared to air, rail or trucking, we are accountable for our emissions footprint and must take the lead in helping the Great Lakes region meet its carbon-reduction commitments.
As part of this commitment, our company, Canada Steamship Lines, has recently completed the world’s most comprehensive biofuel tests with impressive results. Over the course of six months, eight vessels in our Great Lakes fleet were successfully fueled with 100%, second generation biodiesel made from agricultural waste products, without any modification to existing engines or other equipment. On a lifecycle basis, our tests were able to reduce the carbon emissions of these vessels by over 80% when using biofuel. This demonstrates the potential of this alternative fuel to immediately reduce the carbon footprint of not only our ships, but of all Great Lakes vessels, as other longer-term solutions are developed.
In short, this is a game-changer for our industry and a transition solution that can be applied today with minimal disruption. On the horizon, we know that technological advances will eventually allow the adoption of hydrogen, ammonia, and batteries to become commercially viable alternatives for the shipping industry. But they are not feasible solutions today, nor in the short or medium term. Furthermore, these solutions will only be used on newly-constructed ships, or on ships requiring major retrofit investments. However, biofuel is available today and, as our tests have demonstrated, it is a drop-in solution that works seamlessly on a variety of engine types.
Our tests have also shown that biofuel works in most shipping conditions. The Canada Steamship Lines fleet is made up of 11 self-unloading ships and five bulkers that sail throughout the Great Lakes and St. Lawrence Seaway, transporting essential dry bulk goods to ports on both sides of the border. During our tests, we studied the reaction of biodiesel in a variety of settings encountered by our vessels, all with positive results.
Although the technical performance of biofuel use on ships has confirmed its potential as a realistic and immediate alternative to fossil fuel, some obstacles are standing in the way of its widespread use as an important step in decarbonizing the shipping industry.
First, biodiesel has a slightly lower calorific value than traditional fossil fuel, meaning that more biofuel is required to achieve the same energy output. This 9% to 11% difference was observed in all engine types, and does factor into the economics of a biofuel transition.
Secondly, regulatory hurdles remain as biofuels are not currently approved for marine use in Canada or the U.S., despite mounting evidence of their efficacy. Forward strides such as the testing protocol that allowed CSL to conduct our tests, as well as biofuel studies conducted by the U.S. Department of Energy Bioenergy Technologies Office are encouraging, but both countries have yet to allow the full use of these alternative fuels. Until that happens, it remains difficult for companies to plan for the infrastructure investments required to make biofuels truly accessible across the Great Lakes-St. Lawrence shipping corridor.
Third, biofuels need to be recognized as a key part of the Great Lakes region’s decarbonization strategy. It can be tempting to try to copy-and-paste ready-made formulas or solutions developed elsewhere into our unique region. However, doing so leaves gaps and can easily create a lopsided system that fails to reach its goals. Instead, it is time to develop a truly binational decarbonization strategy, that addresses the particularities of the Great Lakes region. This includes the sourcing of biofuels, their logistics chain and all aspects of their production and use.
Finally, and most importantly, there is the question of economics. Depending on market fluctuations, biofuels are 1.5 to 2 times more expensive than traditional fossil fuels. The current market, already seeing massive inflation, cannot absorb such a cost naturally. However, when the decarbonization potential of biofuel is taken into account, the case for a government-led credit system or subsidy becomes clear. Governments on both sides of the border have been advocating for a greener future, and this solution ticks all the boxes. This is an opportunity for them to support a concrete, results-driven initiative that delivers on these promises.
The use of biofuels in the shipping sector is not meant to be a perfect solution, but it is one that we can apply today, with the necessary support and incentives in place. Until other solutions become technically and commercially viable, and a consensus on which to use is reached, biofuels offer us a path forward in the decarbonization of our shipping sector. It is a solution that can quickly and efficiently make the Great Lakes the first low-carbon shipping region in the world, with minimal disruption for shipowners. After all, every day burning biodiesel is a day better than burning current fossil fuels.
The CSL Group is the largest owner and operator of self-unloading ships in the world. Headquartered in Montreal with divisions operating throughout the Americas, Australia, Europe and Asia, CSL delivers more than 70 million tonnes of cargo annually for customers in the construction, steel, energy and agri-food sectors.