There is NO time for antagonism among marine fuel proponents

As the world witnesses the devastating impact of climate change through catastrophic events like wildfires engulfing the Greek island of Rhodes and northern Algeria, and the occurrence of giant supercells in Italy, the need for urgent and sustainable solutions within the energy industry, the maritime sector included, becomes more apparent than ever.

The discussion around the silver bullet for decarbonization of the maritime sector was completed a while ago, the conclusion being that there will not be ONE solution that fits all, but multiple pathways to get to the net zero goal.

That said, there has been growing antagonism among proponents of various marine fuels, including LNG, methanol, and ammonia that revolves around what pathway makes more business sense and what is more feasible.

Indeed, determining the right pathway for a shipowner that is future-proof is difficult, borderline impossible, having in mind so many uncertainties on the market. The solution/s not only needs to align with sustainability goals but also make the most practical and economically viable sense for the business.

Making the right choice among the available marine fuels involves weighing factors like infrastructure investment, fuel availability, anticipated technological developments as well as the evolving regulatory landscape. Therefore, industry stakeholders not only have to figure out the immediate costs but also the long-term financial risks and benefits of their chosen fuel pathway.

Unfortunately, the growing debate around costs and benefits has led to a sense of tension within the industry. While healthy competition and contrasting viewpoints can drive innovation and progress, unnecessary antagonism can hinder collective efforts towards achieving a more sustainable future. Collaboration and open dialogue between all stakeholders are essential to strike a balance between business viability and environmental responsibility.

The maritime industry, already navigating through complex regulatory landscapes and market uncertainties, cannot afford to be divided by competing fuel preferences. Instead, it must unite to seek viable solutions that address both environmental and financial considerations. The urgent need to combat climate change requires that no stone be left unturned in the quest to find what works best for each unique scenario.

Methanol production has surged over the past decade, largely driven by China’s significant increase in coal-based production. Although methanol is a viable fuel option, the current production methods predominantly rely on fossil fuels, resulting in life cycle emissions of 0.3 gigatons CO2 per annum. Predictions indicate that global methanol production could reach 120m tons by 2025 and soar to 500m tons annually by 2050, with a potential 1.5 gigatons of CO2 emissions if the production pathways remain reliant on fossil fuels, according to the Methanol Institute. The shift towards renewable methanol production is crucial to ensure its viability as an environmentally sound marine fuel.

Presently, the production of green methanol remains limited, with only 0.2m tons produced in 2021, data from the Methanol Institute shows. This raises doubts about the actual amount of certified green methanol available for the shipping industry and the potential impact on global GHG emissions in the long run.

As such, companies might have to follow Maersk’s example and ensure the production of green methanol on their own.

A comparative emissions analysis conducted by SEA-LNG, using data from ABS and Sphera, reveals that grey (fossil) methanol emits approximately 14% more CO2 on a full lifecycle, well-to-wake basis compared to Very Low Sulphur Fuel Oil (VLSFO). In contrast, grey (fossil) LNG, including methane emissions, showcases up to 23% lower CO2 emissions than VLSFO when evaluated on the same basis. SAE-LNG insists that this data emphasizes the immediate emissions reduction benefits offered by LNG, providing an advantage in the journey towards achieving net-zero emissions.

That being said, two major issues have been associated with LNG as fuel, the methane slip and its well-to-wake profile pointing to the fact that shipowners who have invested in the LNG pathway will need to shift to renewable synthetic LNG (e-LNG) in the long-term.

SEA-LNG says that BioLNG and ultimately e-LNG will be a net zero option for shipping, with the former one being a suitable solution that can help decarbonize shipping today. 

Proponents of LNG emphasize its immediate emissions reductions, providing a head start in the industry’s transition towards sustainability. On the other hand, those advocating for methanol argue that relying on fossil-based methanol or continuing to use VLSFO, while awaiting significant green methanol production, may postpone emissions reductions for several years, resulting in higher compliance costs in the long term.

To achieve the ambitious goal of having 5% of fuels as zero-carbon fuels by 2030, it is estimated that approximately 40MT of green ammonia will be required. However, today, only 20MT of (grey) ammonia is traded globally, with around 40 vessels capable of transporting it. Yara International projects a staggering 500MT of ammonia demand by 2050, with approximately 43% green, 27% blue, and 30% grey. This indicates a significant need for both green and blue ammonia as alternative fuels.

With that in mind, the engine makers are yet to develop an ammonia-powered marine engine and accompanying fuel supply system that is safe and proven in operation.

Infrastructure buildout at ports must be a priority to support the volume of trade required for future fuels. An estimated $20 billion investment is needed by 2030, with a significant portion dedicated to developing storage tanks, as explained by Lynn Loo, the CEO of the Global Centre for Maritime Decarbonization.

Loo argues that the transition to greener fuels will require the creation of new supply chains and port-side infrastructure to support their widespread adoption.

Furthermore, having in mind that methanol and ammonia have lower energy density than conventional fuel oil this will most probably mean more frequent bunkering or sacrificing cargo space for larger fuel tanks.

This also translates to the need for higher-capacity bunkering barges, and other infrastructure modifications to accommodate the same energy-equivalent amount of fuel.

According to the findings from the joint industry survey GCMD carried out with Boston Consulting Group (BCG), 60% of respondents prefer more frequent bunkering rather than installing larger fuel tanks to accommodate the lower energy density of methanol and ammonia.

As such, Loo predicts that this will result in more distributed bunkering operations leading to the need for additional ports, enhanced port infrastructure, and expanded services to facilitate efficient bunkering operations across various locations globally.

Ships on the iron ore route between Australia and China can make multiple round trips with a single fuel oil bunkering operation, while container ships on the China-US west coast route can complete the journey without refueling. However, dry bulk vessels using ammonia or methanol on the AUS-China route will only be able to make one-way trips without refueling. Similarly, container liners traveling between China and the US will need to refuel mid-way when using ammonia and methanol, as explained by Loo.

Nuclear propulsion has the potential to revolutionize the shipping industry by offering a pathway to significant emissions reductions. Nuclear-powered vessels, if developed and deployed responsibly, could present a clean and efficient solution to the sector’s carbon emissions conundrum.

Although safety and regulatory concerns are critical, proponents argue that advanced nuclear technologies can address these challenges.

One of the most significant advantages of nuclear propulsion is its capability to provide zero-emission power for ships. Unlike traditional fossil fuels and even some alternative fuels, nuclear propulsion does not produce greenhouse gas emissions or particulate matter during operation.

Another key advantage is long endurance and range compared to conventional ships. Nuclear reactors can generate continuous power over long periods without the need for frequent refueling or bunkering stops. This feature can be especially advantageous for long-haul voyages, allowing ships to traverse vast distances with minimal interruptions, making it well-suited for certain trade routes.

Nuclear propulsion is known for its high fuel efficiency, as a relatively small amount of nuclear fuel can produce a significant amount of energy. While the initial capital costs of nuclear propulsion systems are high, their long operational lifespans and minimal fuel requirements can lead to cost savings over the vessel’s lifetime, especially in comparison to alternative fuels that may require more frequent bunkering.

Furthermore, the predictability and stability of nuclear fuel supply can offer a level of security and resilience for ship operators, ensuring consistent and reliable power generation.

Finally, it would result in reduced dependency on bunkering infrastructure, storage tanks, or supply chains for fuel delivery. This can be advantageous in regions where bunkering infrastructure for alternative fuels is limited or underdeveloped. Nuclear-powered ships can operate independently of such bunkering facilities, making them less reliant on the availability and accessibility of fueling stations.

According to a recent study by ABS, the adoption of advanced nuclear reactors onboard a 14,000 TEU containership would basically eliminate the need for refueling the vessel during its entire 25-year lifespan.

However, it is essential to consider that nuclear propulsion also presents challenges and concerns, such as safety, public perception, regulatory requirements, and waste management. The deployment of nuclear-powered vessels requires stringent safety protocols and robust regulatory frameworks to address safety risks and ensure adherence to international standards.

Additionally, nuclear propulsion may not be suitable for all types of vessels or maritime operations, and it is not a one-size-fits-all solution. It is crucial to assess the feasibility and applicability of nuclear propulsion on a case-by-case basis, considering the specific needs, trade routes, and operational profiles of individual ships.

That being said, industry majors are teaming up with relevant companies to explore the potential of small modular nuclear reactors and we are seeing that the case studies and projects are intensifying in this domain.

The recent climate-related disasters serve as stark reminders of the consequences of global warming. The maritime industry, responsible for a substantial share of global emissions, plays a crucial role in addressing climate change. As such, the urgency to transition to low-carbon or zero-emission propulsion systems cannot be overstated.

Comprehending and addressing the multifaceted challenges and gaps in the context of the energy-transport nexus is crucial for the successful adoption of future fuels in the maritime industry. Collaboration, infrastructure development, and demand aggregation across sectors are essential components of the transformative journey toward cleaner and more sustainable marine transportation.

With that in mind, the shipping industry is far from homogeneous, with each company possessing a unique fleet, operational profile, and financial strategy. What may prove economically sound for one shipping company might not be the optimal choice for another. As such, it is imperative that shipping companies carefully assess their individual circumstances and thoroughly analyze the potential costs and benefits associated with adopting a particular marine fuel pathway.

Therefore, the maritime industry must rise above antagonism and embrace a united approach towards a sustainable future. While the exploration of nuclear propulsion shows promise, all viable alternatives, including renewable methanol and ammonia, must be pursued vigorously. By combining efforts, the industry can expedite the transition to low-carbon and zero-emission marine propulsion, contributing significantly to global efforts in mitigating climate change and safeguarding the planet for future generations.