Solving the Low Carbon Shipping Fuel and Energy Algorithm – Quickly!

by Adrian Tolson (BLUE Insight/Biofuels Digest) BLUE Insight’s Low Carbon Shipping Fuels and Energy Guide 2020 is a market first assessment of the leading low carbon marine fuels with potential to replace fossil fuels as the marine fuel of the future and analyses the companies, the R&D projects and collaborations, producing and supplying these fuels. We look at, amongst other criteria, the differing investment requirements, both shoreside onboard, potential price points, differing methods of production and overall applicability to international shipping.

The International Maritime Organisation’s (IMO) Greenhouse Gas (GHG) and CO₂ reduction policies actually require a greater reduction than first thought, when viewed on a vessel by vessel basis. The IMO’s GHG policy aims to reduce shipping’s carbon intensity by at least 40% by 2030 and 70% by 2050, in comparison to a 2008 baseline. It also aims to reduce shipping’s overall GHG emissions by 50% – again against 2008 levels – with the aim of phasing them out completely, to make shipping a zero-emission sector.

The volume of goods shipped globally has doubled since 1995, and will continue to grow – and so – although impacted in the short term by events during 2020 – the total emissions of international shipping will grow. While this will be partially alleviated by increases in operational and technical efficiencies, the actual requirement is estimated by University Maritime Advisory Services (UMAS) to be 85% CO₂ reduction per vessel by 2050.

The low or zero carbon shipping fuels and energy sources of the future will therefore require the potential to deliver individual vessels up to an 85% and in some cases a 100% reduction in CO2 emissions. If this seems daunting, the Guide does provide some glimmer of optimism; a number of fuels explored reduce CO₂ by at least 85% at least as the point of combustion.

To achieve the IMO’s targets, the shipping industry requires astronomical investment and careful planning.

The building of infrastructure will require coordination from across the supply chain.

The options are plentiful. The BLUE Insight Guide covers 11 different fuels or technologies, all with advantages and disadvantages for varying sectors, these are:

Drop-in fuels will provide a cheaper and potentially easier option than fuels requiring more substantive adaptations to the supply chain of the vessel itself. Drop-in fuels have the potential to mitigate the infrastructure issue. These are fuels that can utilise existing storage, transport and bunkering infrastructure and vessel engines without requiring modification. Nominally these fuels can also be used as a blend with other fuels. The next stages of LNG, bio and synthetic, alongside biofuels, are accepted as direct drop-in fuels. These fuels, therefore, have an advantage over other alternative fuels due to the lower capital expenditure required to integrate them into the marine fuel market.

Companies have already begun using drop-in fuels or blending them with fossil fuels. For example, the Finnish company Gasum offers a marine bio-LNG and LNG fuel mix to its customers, and the Dutch company GoodFuels supplies drop-in HFO and MGO equivalent fuels that can be blended with VLSFO or MGO.

Shipowners should spread the risk of unreliable availability by using dual-fuel engines.

Carbon taxes and stakeholder pressure will have a greater effect on fuel choice than overall cost.

A number of new lower carbon fuels use CO₂ in their production. CO₂ can be sourced in a number of ways and the methods, origin and use of this CO₂ can be a contentious subject. Regulations are needed that apply to both the use of recycled CO₂, produced by industry and captured at point source, and biogenic CO₂, part of the natural carbon cycle. Direct air capture, taking CO₂ from the atmosphere, is in its infancy and is expected at first to be an expensive process, but one whose costs will decrease with economies of scale and developments in technology.

It is not a race for the silver bullet, rather the race for multiple silver bullets for individual shipping sectors. It is accepted across the industry that there will no longer be a single fuel for the marine industry, as differing sectors have different fuel, space and energy requirements making certain fuels better suited to them than others.

Critically, the companies, projects and collaborations in the low carbon marine fuel race are not the traditional bunker suppliers or producers of the past.

So, what can you do now? Shipping has more or less completed what is comparatively a simple fuel transition to low sulphur fuels in 2020, where some have benefited more than others (those investing in scrubbers, for example have been hit by the current low spread between VLSFO and HFO). Decarbonising the shipping industry is going to be a much more complex, but necessary change.

The BLUE Insight Low Carbon Shipping Fuels and Energy Guide 2020 is the first independent and impartial analysis of the future fuel options for the marine industry and its varying sectors, allowing for the market players to establish their own opinion. The Guide gives in depth insight into the companies on the forefront of shipping’s decarbonisation push, introducing the shipping, fuel and energy industries to the bunker suppliers of the future.

To download the free introduction and to purchase your own copy of the Guide, visit our website or email insight@blue-comms.com if you have any questions. READ MORE

Excerpt from Politico's Morning Energy: IMO ADOPTS DRAFT EMISSIONS CUT PLAN: The International Maritime Organization on Friday approved a draft deal to regulate shipping emissions, Pro's Karl Mathiesen and Hanne Cokelaere report. The proposal includes a dual system that would grade ships based on their emissions and set goals for reductions in engine power. Critics of the measure point out ships rarely steam at their full capacity, limiting the impact on emissions. But if the working party deal is adopted next month, it would be the IMO's first regime designed to meet climate targets it set in 2018, including a 40 percent improvement in carbon intensity by 2030. READ MORE