Episode Transcript
Summary:
In this episode, you’ll learn about the carbon footprint of the maritime shipping industry, and one company’s efforts to decarbonize marine transport by capturing ship emissions on-board.
Our guest host for this episode, Darren Hau, sets the scene by giving us a sense of the scope of the issue. (1:00) “Shipping moves 11 billion tons of goods each year, which is almost 300 times as much stuff as transported by air.”
At 2:20, our guest, Alisha Fredriksson, the founder and CEO of Seabound, paints a picture of how their technology works. “Imagine a large cylindrical device that we install adjacent to the funnel or smoke stack on a given ship. We route the exhaust into that device and essentially it pulls the CO2 out of the exhaust and then stores the CO2 on-board until the ship gets back into port.”
Then Alisha describes Seabound’s technique, calcium looping (a second generation carbon capture technology) and compares it to scrubbing (a first generation carbon capture technology).
At 12:53, we learn about Seabound’s business model which includes selling the carbon capture hardware to ship owners. Seabound also sells the captured CO2, sharing the profits with ship-owners to offset the initial hardware cost. If a global carbon levy is adopted, Seabounds’ devices could pay for themselves. Alisha says, (15:21) “some estimates (suggest the price of carbon will) go up to $150 to $200 per ton of CO2. And so that is really kind of the order of magnitude that we’re looking at.”
James Lawler: You’re listening to Climate Now, a podcast that delves into the scientific ideas, technologies, and policies that will help us address the global climate crisis and reach a net zero emissions future. I’m James Lawler, here with my guest host Darren Hau, whose day job is designing and deploying the charging and energy infrastructure to support all electric, autonomous vehicles with the company Cruise.
Introduction to Alisha Fredriksson
James Lawler: Darren and I are speaking today with Alisha Fredriksson, who recently started a company called Seabound to decarbonize the shipping industry by capturing ships’ carbon emissions on-board. A bit of background: next year, ships of 400 tons or more must meet new emissions testing under an international convention, which has been signed by 175 countries.
[00:00:51] The goal is to reduce CO2 emitted from the shipping industry by 40% by 2030, as compared to 2008 levels.
[00:01:00] Darren Hau: For a sense of scale. Shipping moves 11 billion tons of goods each year, which is almost 300 times as much stuff as transported by air. Ironically, fossil fuels alone make up 40% of those 11 billion tons moved by sea.
[00:01:14] So essentially, we’re emitting CO2 to move CO2-emitting energy around the globe. So what technological solutions exist to reduce shipping emissions? Ships can use alternative fields like biofuel, ammonia, or hydrogen, or they can just slow down and use wind propulsion like we talked about in our episode with Maria Gallucci.
[00:01:33] Or, the carbon dioxide from a ship’s exhaust pipes can be captured and sold on-shore, which is what Seabound is trying to do. Today, we’ll cover how does Seabound’s technology capture carbon? What is the energy use and onboard footprint of their technology? And what is the market to buy the carbon once it reaches the shore? Finally, what is the cost and scalability of the technology.
[00:01:53] James Lawler: Alisha, it’s great to have you on the Climate Now podcast. Thanks for being here.
[00:01:57] Alisha Fredriksson: Thanks for having me.
What is Seabound?
James Lawler: The company that you’ve started is called Seabound. Could you tell us what the concept is? What is Seabound all about?
[00:02:03] Alisha Fredriksson: Yeah, so Seabound builds carbon capture equipment for ships, and we’re the only way for the existing ships to reduce up to 95% of CO2 emissions, and to comply with upcoming global regulations that are kicking off in 2023. To give you a bit of a visual picture: so you can imagine a large cylindrical device that we install adjacent to the funnel or smoke stack on a given chip. We route the exhaust into that device and essentially it pulls the CO2 out of the exhaust and then stores the CO2 on-board until the ship gets back into port.
[00:02:36] Then we offload and post-process the CO2. And then we sell it for utilization into new products such as fuels or for storage or geological sequestration. And then we share that revenue stream with the ship owner.
Emissions impact of maritime transportation
Darren Hau: So Alisha, maybe you could tell us on a high level the emissions impact that the maritime industry has, and what you imagine the potential is of this technology on reducing those emissions.
[00:03:00] Alisha Fredriksson: Yeah. So shipping today emits about a billion tons of CO2 per year or two and a half to three percent of global emissions. We are specifically targeting the larger ships. So there’s about a hundred thousand merchant ships around the world, of which 35,000 we think are the right fit for ours, so the medium to larger vessels.
[00:03:21] On average, those 35,000 ships emit about 20,000 tons of CO2 per year, and we can capture up to 95% of their emissions. So the total emissions reduction opportunity, there is about 700 million tons per year if we could achieve a hundred percent market share, right? And so we’re looking at 1,000 ships by 2030 and 10,000 by 2040 to have Seabound systems installed. So that would amount to 200 million tons of CO2 captured per year by 2040.
Carbon capture technique: Calcium looping
Darren Hau: I wanna dive into the process a little bit more before talking about the application on types of ships. What exactly is that process that you’re using called?
[00:03:57] Alisha Fredriksson: It’s a process called calcium looping. Calcium looping is a second generation type of carbon capture technology, so it’s less mature and commercially available than the amine-based systems that you’ll typically find, especially for point source CO2 capture.
[00:04:12] The way that calcium looping works, it’s a cyclical chemical process that uses solid materials to pull CO2 out of flue gas. Specifically, you have a material called calcium oxide, which reacts with carbon dioxide to form calcium carbonate, which is otherwise known as limestone.
[00:04:27] In terms of how it’s different from scrubbers, so scrubbers are a type of marine technology that you’ll often find onboard ships that pulls sulfur emissions out of the flue gas, but they aren’t designed today to pull CO2 out of flue gas. And so that’s the key difference really, is what the focus kind of emissions reduction is.
[00:04:45] Darren Hau: And it sounds like you’ll be offloading this calcium carbonate that is the byproduct of what you do onshore to be reversed back into calcium oxide, right?
[00:04:54] Alisha Fredriksson: Yes, that’s right. So we can do a couple of things when we get into port with calcium carbonate. We could actually just sell calcium carbonate or limestone into the lime industry. Essentially it’ll be used for building materials or other types of construction processes.
[00:05:08] And that would kind of be the easiest solution. Alternatively, we can do the reverse reaction on land, which is where we split up the calcium carbonate into carbon dioxide and calcium oxide. We then sell or sequester the carbon dioxide and reuse the calcium oxide to capture more CO2 on another ship.
[00:05:24] Darren Hau: That raises an interesting question, You know, how do you think about the materials availability of this?
[00:05:29] I know a lot of questions around CO2 sequestration is, well, ‘Hey, how scalable is this?’ This is often thought about biofuels, et cetera, but how prevalent are these materials that you want to use?
[00:05:41] Alisha Fredriksson: I mean, so calcium oxide or quicklime, it can be found around the world today. It’s essentially what underpins the lime industry or the cement industry.
[00:05:49] So the catch is that today the cement industry is also heavily emitting of CO2. And so when we split calcium carbonate into calcium oxide and CO2, typically today the emissions are released. There’s a number of companies, both startups and big incumbents, that are working on producing calcium oxide without emitting the CO2.
[00:06:11] And so we are starting to talk to a number of them for partnerships for procuring the initial supply. Eventually, we see ourselves co-developing or even developing our own facilities in-house. But those would be kind of our second and third stages.
Carbon capture techniques: Calcium looping vs. scrubbing
[00:06:24] Darren Hau: Got it. Can you really compare something like calcium looping to scrubbing, this more first generation technology. What are the pros and cons between these two approaches? Why did you settle on this second generation calcium looping approach?
[00:06:37] Alisha Fredriksson: Yeah, so it’s a couple of things. I mean, I think the main thing is CapEx, and then it’s like ease of logistics and scalability. So what we think is pretty interesting about calcium looping is that you can cut the carbon capture process in half.
[00:06:50] So you just do part of it, and actually the simpler part, on board a ship. And then you do the more complicated and energy-intensive stuff on land where you can leverage economies of scale in a way that you couldn’t on a ship and essentially have one land-based system serve many different vessels.
[00:07:06] So that was a big way that we are able to reduce CapEx overall. Additionally, when you capture CO2 with solid materials, which is what we’re doing, as opposed to in liquid or gaseous form that you then need to compress into a liquid form, it’s very energy intensive to do that compression and liquefaction. And we think that there will be challenges from a scaling perspective when ships get into port with liquid CO2, because we don’t yet have the pipeline infrastructure around the world to be transporting that liquid CO2.
[00:07:36] Whereas we do have infrastructure in ports around the world for handling solid materials such as limestone, and so that’s where we think it’s going to be easier to roll this out more quickly as well.
[00:07:47] Darren Hau: Yeah, this is a digression, but it seems like, why would you wanna recreate the CO2? It seems like you’ve basically done the sequestration already by turning it into limestone, right?
[00:07:55] Alisha Fredriksson: Yeah, it’s a great question. So it’s because we can reuse the calcium oxide and so the process becomes slightly cheaper. So for certain routes such as shuttle routes or round trip routes, that’s where it would make sense to just keep using the same calcium oxide over and over, and essentially use or or store the CO2 on either end.
[00:08:15] But if we have global routes and it’s not a shuttle trip, then we’ll just be offloading the limestone.
James Lawler: Do you think you could describe in a little bit more detail the engineering of the on-ship piece of the technology? What kind of scale are we talking about? Is this the size of a bathtub? How big is this vessel? And then are we talking about like a powdery substance, this calcium oxide inside of it? Is there any heat required for this reaction, or how does it sort of look and how does it work on that ship?
[00:08:44] Alisha Fredriksson: So it’s a large cylindrical device. It’s about six to seven meters tall, two to three meters in diameter, depending on the size of the ship and the CO2 throughput.
[00:08:54] James Lawler: So it’s a large bathtub.
[00:08:56] Alisha Fredriksson: It’s a pretty big bathtub.
[00:08:57] James Lawler: It’s not a bathtub at all, to be clear.
[00:09:01] Alisha Fredriksson: Not exactly a bathtub. So that’s what the device looks like. To your other question, it actually releases heat, it’s an exothermic reaction.
[00:09:10] So it doesn’t require energy for its own operations, or very negligible for adjacent equipment, but then it releases heat that also has potential for waste heat recovery, which is something else that we’re exploring too.
[00:09:22] James Lawler: And the CO2, the exhaust that is coming out of the ship, is it simply a matter of installing a pipe that is sort of an S shaped pipe that routes it back into this chamber and that’s it and it just happens? Or is there any kind of mixing involved? How is that reaction facilitated in the device?
[00:09:39] Alisha Fredriksson: Yeah, so that’s pretty accurate. So essentially we’re routing the exhaust from the smoke stack or the funnel into our device and then we’re re-releasing it after it’s passed through and the CO2 has been pulled out so we’ll also have another filter. We’re looking at having a blower to make sure that there is no back pressure on the engine as well.
[00:09:58] Darren Hau: What are the innovations or tricky implementation details that you guys have considered that make your solution more unique, more competitively advantageous compared to other ones?
[00:10:10] Alisha Fredriksson: Sure. Yeah. Maybe I’ll comment on two technical innovations and then additionally a business model innovation. I think on the technical front, the decoupling of the carbon capture process is a big part of our solution, where we just do the capture onboard and we do the regeneration or separation stage on land, if we even do it as we’ve talked about, which enables us to reduce CapEx.
[00:10:34] The second thing is that we’re working on a new compact form of calcium looping reactor that enables it to be smaller and more CapEx friendly as well. So typically calcium looping reactors are really big pieces of kit, which need a lot of adjacent equipment too. So we’re pioneering a new approach which we have a patent pending for.
[00:10:52] And then on the business model front, which relates to the decoupling element that I’ve just commented on as well, essentially what we’re doing is spreading the high cost of decarbonizing shipping to many different stakeholders. So ship owners are only paying for a piece of what they would otherwise be paying for.
[00:11:09] We’re working with ports as well for some of the other pieces, and then we’re securing offtake contracts to sell the CO2, whether it be to turn into new products or to sequester by selling carbon credits. And so by distributing the cost, we’re making sure that it can be as affordable as possible for our ship owner customers, and that there’s also an additional return for them, so that this isn’t just seen as a kind of challenging green premium product, but is actually a viable solution to roll out across their fleets.
[00:11:39] Darren Hau: Yeah. It seems like you guys have been pretty thoughtful about this. I wanna dig deeper into both the ship side and the onshore side. On the ship side, I imagine one of the challenges will be how do you make this small, miniaturize it so that you don’t displace cargo, right?
[00:11:53] Alisha Fredriksson: Mm-hmm.
[00:11:54] Darren Hau: How much cargo might this system displace, or is it pretty much plug and play. What parts get removed or added if you incorporate your system?
[00:12:03] Alisha Fredriksson: Yeah. So that’s the challenge with capturing CO2, is storing CO2 on board. So we estimate between one to five percent of cargo capacity would be sacrificed, depending on how much of the CO2 you are capturing.
[00:12:16] Darren Hau: What are the facilities that need to be built onshore? You know, it sounds like that’s where most of the heat and the energy goes into. Can you just describe that a bit for us, and who would build that?
[00:12:24] Alisha Fredriksson: So it’s called a calciner. This is a type of equipment you’ll find in the lime industry as well, but specifically we’re looking at zero emissions calciners, so they don’t emit CO2 when they produce calcium oxide.
[00:12:35] And so initially we will start by partnering with companies that are producing or that are already building zero emissions calciners, so we can procure the calcium oxide from them, and then eventually we want to co-develop those facilities and finally develop our own, so that we can make sure to put them in all the key ports where they’re needed.
Seabound’s business model
James Lawler: How do the economics work in terms of the cost of the retrofit, the amount of CO2 that one could capture in a voyage of different lengths at different speeds, and then the price that one could fetch by selling either the lime or the CO2 stream on the back end. How does the business model look from a numbers perspective?
[00:13:14] Alisha Fredriksson: So I guess there’s two components to our business model. So we sell the hardware, which is the carbon capture device that’s installed on a ship. That costs between one and a half to three million dollars per unit, and that’s essentially an upfront cost that the ship owner pays for. But there are also supportive green financing schemes in the industry, such as the Poseidon Principles to help with those types of transactions.
[00:13:38] The second component of our business model then is a materials subscription. And so we supply calcium oxide to the ship owner, and then we take the calcium carbonate or limestone off their hands and so on and so forth. And then additionally, we have the CO2 that we sell, whether it be for utilization or for sequestration.
[00:13:57] Darren Hau: You also mentioned how this system will be used throughout the lifetime of the ship, and you said a lot of the technology that people are looking for are actually for new ships, not for existing ships. So what is the lifetime of ships today? If you buy one, how long do people expect that to be in operation for?
[00:14:14] Alisha Fredriksson: Yeah, the lifetime of a ship is between 20 to 30 years, I think sometimes up to 40 years for cruise ships, but 20 to 30 is a pretty safe range.
[00:14:22] Darren Hau: Got it. So that really is a pretty good ROI, considering it costs up to 250 million to build one of these large cargo ships.
[00:14:29] Your tech potentially amounts to maybe 1% or less of the total cost to design and build these vessels, which are going to be around for decades burning fossil fuel, otherwise.
[00:14:38] Alisha Fredriksson: Yep.
[00:14:39] James Lawler: Many countries now have a price on carbon, or cap and trade systems. How might the price of carbon impact the economics of Seabound’s technology?
[00:14:48] Alisha Fredriksson: The price of carbon within the shipping industry, it’s a whole new category that shipping companies now need to consider because of one upcoming regulation, but to demand and pressure from their customers, there are some regulations that have already been announced and released that start next year.
[00:15:04] There’s others that are still kind of ongoing debate and in proposal review stage. But one of them is a global carbon levy for the shipping industry. And I think about a hundred shipping companies kind of signed off that they want a carbon levy for the industry. And I’ve seen estimates of a hundred dollars per ton of CO2, some estimates that it’ll go up to $150 to $200 per ton of CO2. And so that is really kind of the order of magnitude that we’re looking at.
[00:15:31] James Lawler: So that’s huge. If it’s 20,000 tons per year each vessel is releasing, then that’s two, three million dollars right there, and that pays for Seabound installation.
[00:15:41] Alisha Fredriksson: Yeah. And this is why decarbonization is really kind of the topic of the moment, is because of that order of magnitude. And one additional helpful tailwind is that shipping enters the emissions trading scheme in the EU in 2023 as well.
[00:15:55] So it’ll be kind of like phased in or ramped up over the next three years, but if you look at the carbon price in the EU, I think it’s around $90 at the moment, and it kind of hovers around there and is expected to increase as well.
[00:16:07] James Lawler: There’s no way these numbers are going down. The speed at which they increase is an open question. But if you’re starting basically a break even in year one or two, given the regulatory environment, that’s a pretty good position for you guys to be in at the start of your journey.
[00:16:24] Alisha Fredriksson: Exactly, and that’s where I think it’s encouraging that the world of shipping is now starting to think about things in terms of cost for a ton of CO2, which I think is also aligned with the broader climate tech or carbon tech space too.
[00:16:36] Darren Hau: Speaking of which, what are the biggest challenges Seabound faces as a company, and what are your next steps to try to address those challenges?
[00:16:43] Alisha Fredriksson: Sure, yeah. So our big goal at the moment is to put our first system on a ship in 2023. So in order to do that, we’ve actually built our first land-based prototype, which we completed over the past couple of months.
[00:16:54] Now we’re building our second land-based prototype, which will be complete by the end of this year. And that’s what we’re doing all of our final testing on. And then we’re doing our first ship-based pilots next year. And so essentially it’s to build and prove out and test that this works onboard a vessel. And you know, once we’ve got that land-based system, moving it over to a marine environment comes with a whole host of challenges related to the motion of the vessel, the corrosion from the seawater, et cetera. That’s really kind of engineering challenges ahead of us, but we do think that they’re surmountable.
[00:17:26] James Lawler: Well, Alisha, thank you so much. It was a real pleasure to talk to you and learn about your company. That’s such an exciting moment for you guys.
[00:17:32] Alisha Fredriksson: Thank you so much. Yeah. It’s been a busy time, but super exciting. We’re looking forward to growing the team too and kicking off the next prototypes. But thank you so much for having me.
[00:17:42] James Lawler: That was Alisha Fredriksson, co-founder and CEO of Seabound, a startup that is developing a new technology designed to capture up to 95% of CO2 emissions from large commercial ships.
[00:17:53] As we’ve learned, container ships loom large in the global economy. They’re responsible for carrying more than 90% of all traded goods, so decarbonization of the shipping industry isn’t something we can put in a dry dock and work on some other day. That’s it for this episode of the podcast. For more episodes, videos, or to sign up for our newsletter, visit climatenow.com. We hope you can join us for our next conversation.
[00:18:21] Climate Now is made possible in part by our science partners, like the Livermore Lab Foundation. The Livermore Lab Foundation supports climate research and carbon cleanup initiatives at the Lawrence Livermore National Lab, which is a Department of Energy applied science and research facility. More information on the foundation’s climate work can be found at www.livermorelabfoundation.org.
