Potential of e-fuels in shipping decarbonization under the spotlight in EMSA’s new report

While e-fuels are seen as viable solutions to support decarbonization, they can not be expected to play a major role in the global shipping sector by 2030 due to limited expansion, the European Maritime Safety Agency (EMSA) found in its latest report exploring alternative fuels and decarbonization technologies.

The report ‘Potential of Synthetic Fuels for Shipping’ was commissioned by EMSA and authored by American Bureau of Shipping (ABS) and CE Delft as part of a series on alternative fuels which already covers biofuels, ammonia, hydrogen, and wind propulsion.

The new report explores the potential of renewable e-fuels, specifically e-diesel, e-methane, and e-methanol, produced by renewable electricity and renewable CO2 from non-biological origin since these are thought to have the highest potential for use as maritime fuels, together with e-ammonia and e-hydrogen.

The analysis of the three fuels covers a range of areas and indicators, including production, sustainability, availability, techno-economic aspects, and the regulatory landscape.

The e-fuel production pathways analyzed in the study, namely methanol synthesis, methanation, and Fischer-Tropsch synthesis, require renewable hydrogen and direct air capture (DAC), which is the main route for non-biogenic CO2 production. However, considering that DAC technology is still in the demonstration phase, none of the e-fuel production pathways are technologically advanced enough to enter the market, the study showed, proposing oceanwater carbon capture as an alternative for DAC.

The study suggests that, in the short term, it is more feasible to rely on the most advanced technologies and processes for producing e-fuels, with electrolysis being used to produce renewable hydrogen and DAC to obtain renewable CO2.

Another suggestion states that, in the short term, biogenic residual CO2 (e.g., from bio-methane production) may be used as a cheaper alternative to scale up the production of e-fuels, but DAC systems should be developed in parallel to enable the switch to atmospheric and/or oceanic CO2 in the long term.

In terms of sustainability, the EMSA said emissions measurement data was not available since e-fuel production has been very limited so far.

In general, the sulfur content of e-fuels can be expected to be zero and only pilot-fuel emissions may remain. The NOx emissions may be reduced by 20%-80% compared to fossil maritime fuels, depending on the e-fuel, fossil fuel, and engine technology.

The analysis showed that particulate matter (PM) emissions are reduced for both e-methanol and e-methane, with e-diesel PM emissions being higher than for both e-methanol and methane even though the effects on PM emissions can also be improved.

The report calls for further development of the already adopted international LCA Guidelines and standards to allow for a complete assessment of greenhouse gas (GHG) impacts of alternative fuels, including e-fuels, and a fair carbon footprint comparison between the different production pathways for the different types of fuels.

Damages to the environment and biodiversity due to e-fuel production were also addressed in the report, suggesting large desert areas for large e-fuel production facilities and seawater desalination as a better option for hydrogen production.

When it comes to availability, the report indicated that the capacity of all segments required for e-fuel production – renewable-electricity plants, electrolyzers, DAC, and e-fuel-synthesis plants – will need to grow tremendously to enable the large-scale production of e-fuels for the maritime industry. The limited expansion rates found in the availability analysis indicate that the role of e-fuels can not be expected to play a major role in global shipping by 2030.

The technical development and implementation speed of DAC capacity were singled out as the main bottleneck in the growth of e-fuel production capacity.

The report argues that supporting the development of dedicated e-fuel projects in which renewable electricity production, electrolysis capacity, e-fuel production capacity, and DAC are developed simultaneously will enable technological development and scale-up, prevent parts of the required technical systems from lagging in production capacity, and make renewable electricity available for e-fuels production.

It also suggests that stakeholders in the shipping sector could contribute to the expansion of e-fuels availability by co-investing in production projects and signing supply agreements or provisional contracts.

Financial policy support measures, carbon taxes, and carbon emissions trading mechanisms are also listed as ways to scale up DAC and reduce costs.

The techno-economic analysis evaluated the cost of the application of three types of e-fuel in different ship types.

In terms of total cost of ownership (TCO), the cost gap between e-fuel-powered and conventional fossil-fuelled vessels may close by 2050, if e-fuel production costs fall, while the cost of fossil fuels increases along with the carbon costs.

Overall findings suggest that these e-methanol, e-diesel, and e-ethane, in tandem with their biofuel variant, besides renewable green ammonia, are the alternative fuels associated with lower additional TCO to support the transition to zero-carbon shipping. However, to ensure their adoption, global market-based measures may be needed to bridge the price gap between e-fuels and conventional fuels.

As e-fuels uptake develops, the accompanying infrastructure (such as bunkering) and availability will increase which is expected to drive the prices of the e-fuels downwards. Therefore, it is important to continue to incentivize the uptake of e-fuels as it may support lowering the TCO values, the EMSA said, noting that competition for the use of the same renewable electricity in other sectors may have an opposite effect on the cost, with the extent remaining of unknown size.

The study found that many of the current regulations on fossil fuels can be directly or indirectly applied to e-fuels but need further development to foster the uptake of synthetic fuels.

The further development of the IMO LCA Guidelines and standards to support a complete assessment of the GHG impacts of alternative fuels, including e-fuels, would allow a fair comparison of the carbon footprints from the different production pathways.

In parallel, the development of the ‘Interim Guidelines for the Safety of Ships Using Low-Flashpoint Oil Fuels’ to provide an international standard for ships using oil-based fossil fuels, synthetic fuels, biofuels and any mixture thereof with a flashpoint between 52°C and 60°C is a step in the right direction for widespread adoption of synthetics, the report states.

At the same time, at a regional level, the European Commission has introduced a basket of measures under its ‘Fit for 55’ initiative, setting, among others, specific targets for renewable fuels of non-biological origin (RFNBO).

The International Maritime Organization (IMO) has also set new levels of ambition based on Well-to-Wake emissions. Among others, there is an ambition at the IMO to increase the uptake of zero or near-zero GHG emission technologies, fuels, and/or energy sources, until they will represent at least 5% (striving for 10%) of the energy used by international shipping in 2030.

All these developments are expected to support the uptake of synthetic fuels, the EMSA concludes.