It is indeed a tragedy that Russia’s invasion of Ukraine jolted the world into action in using clean fuel, according to Dr. Sanjay Kuttan, Chief Technology Officer, Global Centre for Maritime Decarbonization, during a panel discussion at the Bunker & Shipping Summit on June 16.
However, when it comes to decarbonization, there is no silver bullet solution or “one fuel fit all” approach. Maritime industry stakeholders are left in the precarious situation of making investment decisions for future fleets with a general lack of clarity regarding the million dollar question – which alternative fuel would be the future?
According to the United Nations, to keep global warming to no more than 1.5°C – as called for in the Paris Agreement – emissions need to be reduced by 45 percent by 2030 and reach net zero by 2050.
Shipping alone transports close to 80 percent of global trade by volume and is estimated to contribute two to three percent of greenhouse gas (GHG) emissions. As such, decarbonization has become the greatest challenge to the maritime industry in this century.
There are numerous decarbonization opportunities that exist across the life cycle of maritime assets such as vessels and ports. The typical life cycle of a maritime asset starts from the design. This is followed by construction, operation, retrofit and eventually decommissioning.
Different alternative fuels
The energy sector is the source of around three-quarters of GHG emissions today and holds the key to averting the worst effects of climate change. Replacing fuel oil with alternative fuel would dramatically reduce carbon emissions. Therefore, the World Shipping Council considers fuel supply development as a critical pathway to zero-carbon shipping.
According to the Nanyang Technological University (NTU) Maritime Energy and Sustainable Development (MESD) Centre of Excellence, there are three major groups of primary energy sources with various production path ways.
The first type of derived fuels would be fuels containing less carbon such as liquified natural gas (LNG), methanol and its derivatives. The next type of alternative fuels would be those containing biogenic carbon, typically known as biofuels. These include bio-liquified natural gas (Bio-LNG), bio-methanol, biodiesel, hydrogenated vegetable oil etc.
The last type of alternative fuels would be the carbon free ones also known as non-bio renewable energy, primarily consisting of electricity and resulting in hydrogen. There is also research on using nuclear energy as an alternative source of fuel for ships.
Alternative fuels are expensive
Of at least the same importance as technological and environmental aspects, the economic performance of alternative fuels plays a crucial role in their adoption.
According to NTU MESD, with the current status of technological development, the adoption of fuel cells is around four to six times more expensive than using internal combustion engines. However, the cost of fuel cells is anticipated to be lower in the future as the technology matured.
The cost of fuel storage tanks for convention fuel oils, biodiesel, methanol, LNG and liquified hydrogen range from 0.1 USD/kWh to 0.95 USD/kWh, with the storage of liquified hydrogen being the most expensive.
The application of biodiesel can leverage the existing fuel tanks used for the storage of conventional fuel oils with only some precautions. However, the storage for methanol is still more expensive due to its flammable characteristics and material compatibility.
The cost of storage for cryogenic liquids especially liquefied hydrogen can be nine times more expensive than the conventional marine fuels and other liquid alternative fuels i.e. biodiesel and methanol. Moreover, the cost of other types of hydrogen storage are still unknown as they are in fundamental development stages.
For the application of alternative fuels onboard ships, the cost must consider both the selling cost per ton but also the efficiency of energy conversion when using a particular fuel.
Among all options, using LNG is cheaper than using conventional fuel oils and other alternative fuels. The cost of methanol and biodiesel blended diesel is comparable with marine gas oil (MGO). In comparison with the price of fossil-based diesel, biodiesel price is higher and this is mainly because of feedstock cost. The application of ammonia will result in a cost of at least two times higher than that of MGO due to its high specific fuel consumption.
Alternative fuels are not adequate
The availability of alternative fuels is one of the major components enabling energy transition, leading to sustainability in terms of energy systems and meeting climate action targets. For the maritime industry, the adequacy of alternative fuels refer to the combination of availability of feedstocks and production capacity of alternative fuels with the consideration of competing use in other sectors.
In an interview with Serena Huang, project manager at Drewry, during the Bunker & Shipping Summit, ammonia was cited as an example of a future fuel. Huang said that people and companies are investigating ammonia from its production scale to its transportation. Even the automobile industry is interested in ammonia as seen by Mitsubishi’s research on its power generation capabilities and whether it is economically good as a future fuel.
When it comes to convention fuels i.e. low sulfur fuel oil (LSFO) and MGO as well as fossil-based LNG, there is adequacy such that they can meet more than 50 years of global demand. When it comes to fossil-based methanol, Bio-LNG, Bio-methanol and hydrogen, adequacy can only be achieved if a significant expansion of production capacity is realized.
However, first generation biodiesel production produced from edible oils will not be an ultimate choice due to its insufficient supply of feedstock. If biodiesel is to be a preferred choice, third-generation biodiesel from microalgae has to be considered, requiring R&D for microalgae harvesting and establishment of bio-refinery.
Infrastructure for alternative fuels
Other than securing a steady supply of alternative fuels, the infrastructure needs to be on par in order to accommodate them. The requirement of storage facilities at terminal and bunker ships will depend on the fuel’s characteristics, such as physical state, boiling point, flashpoint and storage conditions.
In the case of bio-methanol, new requirements and safety protocols for bunkering would need to be introduced worldwide as it is a flammable liquid. Double-wall fuel storage tanks with leak detectors would need to be in place to ensure the usability of the fuel as well as safety of workers.
As for hydrogen, there is a requirement of the establishment of renewable hydrogen supply chain and bunkering infrastructure. Hydrogen requires either super-insulated low pressure tanks or stainless steel alloy with high level of nickel in order to store and transport it.
It is also important for infrastructure for bunkering to be standardized, so that ships can call at ports regardless of the alternative fuel they are using. Ports need to ensure that they have ready and competent manpower to serve ships using various alternative fuels especially when it comes to cleaning of equipment for flammable fuels.
Although alternative fuels like hydrogen can provide zero emissions onboard ships, hydrogen is produced from fossil fuels without carbon capture technology. The GHG emissions from the production of hydrogen is definitely not a sustainable approach and “defeats the purpose” of decarbonization.
Instead, hydrogen produced from renewable energy is considered an ideal option. However, there needs to be more R&D and future studies for adoption of hydrogen as a fuel.
According to Huang, only small volumes of various alternative fuels have been produced by different fuel producers, resulting in a premium price for environmentally friendly fuel. As such, this may be a hard pill to swallow for ship owners as fossil-based fuels are much more available and thus pocket friendly.
Fortunately, overtime, the economies of scale will improve with better technology and lower pricing of the energy source, thereby driving down the cost of generating energy services.
The importance of collaboration
Kuttan emphasizes on the need to “bring people around a table” to “understand stakeholder’s needs and constraints” in order to decarbonize effectively. The maritime industry is a “highly interdependent industry”, as such, the government, land-based authorities, ports, customers, ship designers and people in technology need to work together in a timely fashion.
All stakeholders need to reflect on their carbon footprint and make changes which will have a “ripple effect across the industry”, thus relieving the burden of the industry as a whole. There also needs to be a shared model and procurement policy to get green shipping moving in the right direction.
Kuttan from the Global Centre for Maritime Decarbonization also shared about the importance of working with the insurance sector as these new fields have different risk profiles. Working closely together with Protection and Indemnity (P&I) clubs to bridge the issues and gap would help the industry move forward with decarbonization.
Photo credit: iStock/Frederick Doerschem