ESG

Environmental Social Governance & Decarbonization

Environmental Social Governance has become a hot topic in the last year and companies are rushing to reduce their carbon footprint.  This is not entirely for altruistic reasons.

The European Union has announced a tax of € 75 /tonne-CO2 to be imposed on all goods imported into the EU effective 2026.  This means that companies will need to calculate the amount of CO2 emitted to make the specific good they hope to export to the EU.

Accordingly, the market for Carbon Credits has flourished in the last two years; see Figure 12 – Carbon Futures.


Figure 12a - California Carbon Futures


Figure 12b - European Union Carbon Futures

Now, let us imagine that we are a ship-owner in the EU bringing in cargo from overseas and our current ships are running on conventional heavy fuel (i.e., Resid, HFO, MGO). Table 2 gives the expected CO2 emission.

Table 2 - Carbon Dioxide Emission per million BTU

 

Pounds CO2

Kilograms CO2

Propane

138.63

62.88

Distillate Fuel Oil (HFO)

163.45

74.14

Kerosene (MGO)

161.35

73.19

Coal (All types)

211.06

95.74

Natural Gas

116.65

52.91

Gasoline

155.77

70.66

Residual Heating Fuel (Resid)

165.55

75.09

A modern container ship produces roughly 3.4 to 16.14 grams of CO2 per metric ton of goods shipped per kilometer travelled.

A cargo ship with 300,000 tonnes travelling 19,200 kilometers from China to the UK emits roughly 93,000 tonnes of CO2 for the one-way voyage, which in 2026 will cost the owner roughly € 7 million in carbon-tax /credit.

It is for this reason, decarbonization, that within the last year, a number of companies have announced Joint Industry Projects (JIPs) to develop multi-fuel engines, where the secondary fuel is more green.

What If?

What if we could "have our cake and eat it too.”  Let us consider the Environmental Social Governance (ESG) equation.

Currently the world is flaring 3.52 trillion cubic feet of gas annually.  This results in a waste of 3.2 quadrillion btu /year or 2.6 giga-watts /day, and emits 178 million tonnes of CO2, which is coincidentally equal to 3% of the USA annual emission.

What if we could convert at least some of the flared gas to a product that emits no CO2, and then use  that product either to maker fertilizer for our farms or in the ships as fuel?  True, we might still release some CO2 in the process of converting the flared gas to this product, but

A.   The Gas would not have gone to waste, and

B.   The ship-owner will not be using HFO; therefore its associated CO2 emissions would not exist.

Naturally, the ideal solution would be to re-inject the CO2 produced into a gas disposal well offshore.

CyaNH3 LLC has envisioned just such solutions.

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