Smooth transition to zero-carbon fuels is closer to reality, report says

The maritime industry is inching closer to achieving a sustainable transition to zero-carbon fuels, thanks to improvements in ship readiness and fuel handling technologies, as detailed in Lloyd’s Register’s (LR) Maritime Decarbonization Hub’s latest Zero Carbon Fuel Monitor (ZCFM) report.

As disclosed in the update, LR’s Maritime Decarbonization Hub discovered ‘significant advancements’ in the handling, storage and utilization of alternative fuels onboard vessels that are driving the industry’s transition to zero or near-zero carbon emissions.

More precisely, the newest ZCFM reflected on the final stage of the fuel supply chain – the ship – and explored the current global fleet’s readiness for sustainable fuels like ammonia, hydrogen, methanol and biofuels (fatty acid methyl esters, or FAME, and hydrotreated vegetable oil, or HVO).

Technology preparedness levels for all reviewed fuels have ballooned over the past year. Simultaneously, the report indicated an uptick in commercial trials and applications aimed at boosting the investment readiness levels (IRLs) within the vessel supply chain stage.

Moreover, community readiness levels (CRLs) have, too, been on an upward trajectory, which the report attributed to an ‘increasing awareness’ of the urgency to meet the International Maritime Organization’s (IMO) 2030 interim target of achieving 5% vessels running on low-to-zero carbon fuels.

LR highlighted ‘considerable’ progress in ammonia fuel technology. According to LR, there were 31 ammonia-capable and over 400 ammonia-ready vessels in the existing fleet and on order, with the majority of the ammonia-capable ships being gas and bulk carriers.

In April 2024, Spanish hydrogen transport solutions provider H2SITE was greenlit by LR via approval in principle (AiP) for its AMMONIA to H2POWER technology for onboard ammonia cracking.

As explained, after the process, the resulting hydrogen can further be used by hydrogen fuel cells that can add to the vessels’ electrical power. Alternatively, the hydrogen could be consumed directly in an internal combustion engine (ICE).

On the other side of the world, Japan’s ‘Sakigake’ tugboat was successfully converted to an ammonia-fuelled vessel in late August 2024, through the efforts of shipping giant Nippon Yusei Kabushiki Kaisha (NYK) and compatriot IHI Power Systems in collaboration with the classification society ClassNK.

Part of a Green Innovation Fund Project initiated in October 2021 under Japan’s New Energy and Industrial Technology Development Organization (NEDO), the tugboat will reportedly operate in Tokyo Bay for a 3-month demonstration period.

Hydrogen is highlighted as having 78 vessels capable of using the fuel in LR’s update, primarily in coastal and short-sea shipping. The overall readiness, if it were assessed for larger types of ships only (e.g. an ocean-going boxship) would be lower, the report suggested, ascribing this to the effect that the ‘practicalities’ of these solutions for large ships could affect their operating patterns or cargo carrying capacity.

Nonetheless, over the past years, there have been numerous developments in the realm of hydrogen. In late 2023, LR gave the go-ahead to BeHydro, a joint venture between CMB.TECH and Anglo Belgian Corporation (ABC), via a type approval for its hydrogen-powered dual-fuel engine that has the potential to cut CO2 emissions ‘by up to 85%’.

That same year, H2 Barge 1, a second inland containership converted to run on hydrogen by Dutch shipbuilder Holland Shipyards Group for compatriot shipowner Future Proof Shipping (FPS), was launched. This vessel is estimated to lower GHG emissions by 2,000 tons of CO2e annually.

The trial for H2 Barge 2 was completed in March 2024, with projections it could decrease GHG emissions by 3,000 tons of CO2 per year.

LR’s report revealed that methanol-driven technology is currently deployed on 315 ‘methanol-capable’ ships with around 500 more classed as ‘methanol-ready’.

According to a white paper by the Methanol Institute, two crucial frameworks, namely the EU Emissions Trading Scheme (EU ETS) and FuelEU Maritime, could help the maritime industry adopt alternative fuels like methanol ‘faster’ and get much closer to the net zero by 2050 target.

To be precise, the rising costs of non-compliance with FuelEU’s GHG intensity reduction targets paired with the gradual phase-in of EU ETS, have led to bio- and e-methanol, in particular, becoming a ‘compelling’ solution by helping ship operators avoid the rising penalties.

In May 2024, LR and Swedish ferry company Stena Line joined forces to work on a retrofit project on two fast roll-on/roll-off (RoRo) vessels with methanol propulsion. As LR’s latest update reiterated, these ships are set to be dual-fuelled, building on the conversion to methanol of the Stena Germanica in 2015.

LR stated that there are a number of vessels presently running on B100 fatty acid methyl esters, which are 100% biodiesel and considered near net zero if the carbon released during vessel operation is ‘sufficiently offset’ by the carbon absorbed by the fuel production resources.

Since biodiesel is considered a drop-in fuel, meaning little to no modification is needed, the technology and infrastructure investments are minimal and are believed to pose low risk.

A notable development from this space happened in June 2024 when The Global Center for Maritime Decarbonization (GCMD) and Japanese shipping titan NYK Line wrapped up the ‘first-ever’ bunkering of a biofuel blend (FAME + VLSFO) on NYK’s short-sea vehicle carrier.

On the other hand, HVO—also known as hydro-processed esters and fatty acids or HEFA—is indistinguishable from petroleum gas oil, the report asserts, and, therefore, requires virtually no onboard modifications.

Although the update acknowledged progress, it also pointed out the areas in need of more development and investment in order to sail to a greener future more efficiently.

One such area is the issue of safety protocols, which the report believes need additional improvements. Another would be crew training for the handling of alternative fuels as well as the challenges related to investment because of supply chain uncertainties, including but not limited to fuel availability and regulatory frameworks.

In this context, the report proposed that a policy intervention to unlock the economic feasibility of investing in cleaner fuels is necessary to ultimately kick open the door to ‘accelerated technology readiness’.

Governments and regulatory bodies could opt to introduce such incentives and establish a clear regulatory system that mandates or encourages the adoption of zero or near-zero carbon fuels, the report concluded.