Shipping is preparing to meet a tough emissions target that aims for at least a 50 per cent reduction in greenhouse gas (GHG) emissions by 2050 compared with a 2008 baseline.
To meet this ambitious goal, which is equal to a reduction of at least 470 million tonnes of cargo emissions according to Dr Martin Stopford, president, Clarksons Research Services, the application of multiple solutions and technologies will be required. The next two decades will be of critical importance to test and prove low-emission technologies and fuels so that by 2030 zero-emission vessels (ZEVs) are ready to enter the world fleet, taking the first step towards achieving the 2050 target. This is according to researchers at University Maritime Advisory Services (UMAS) and Lloyd’s Register (LR).
In a report published this week by the organisations, several projections are made that indicate the pathways shipping could take to decarbonise. The report makes it clear that there will be no ‘one route’. Instead, renewable energy, bio-energy and fossil fuels with carbon capture and storage (CCS) are projected as the three primary energy sources that would enable low or zero-carbon shipping. According to Katherine Palmer, global sustainability manager, LR, “The next decade is a critical time for consolidation. This will be driven by the fact that technologies will be tested and proven and there will be a clear signal for shipping about which way to go.” She and her colleagues at LR and UMAS believe that by 2050 there will be “an end fuel mix that will be dominated by one family of fuels.”
Pathway 1 – Renewables
In the first pathway projected by the organisations, renewables will dominate. Electricity-based marine fuels including hydrogen, ammonia, e-methanol, e-gas oil and electricity for use in batteries will be the primary energy sources for ship propulsion. These electro-fuels will be taken up at the expense of fossil fuels used without CCS technology. Bio-based fuels will also enter the fuel mix, as well as hydrogen and ammonia produced from natural gas with CCS.
The 2020s should focus on research and development for on-board technologies to establish which fuels will have the capability to become the predominant fuel in an electro-fuel mix.
By 2028, there should have been significant development around the safety of hydrogen and ammonia in proven pilot projects so that they are safe to handle.
During the first half of the 2030s, cheap renewable electricity will need to spread to more geographical locations. “The next decade will rely on cheap electricity. We should be able to get it at a cheaper price over the next 10 years, making it more cost competitive,” Palmer told listeners of a webinar held this week.
Hydrogen potential will be linked to the development of storage technologies. Hydrogen produced from renewable electricity would be cheaper than ammonia and methanol produced from renewable electricity, but it is more challenging to handle on-board. Therefore, by 2030, the cost of liquid hydrogen storage would have to reduce from 56 $/kg initially assumed to 15 and 30 $/kg to become as competitive as the ZEVs using ammonia from renewable electricity.
Batteries are likely to be in use but are not expected to dominate. “Batteries and wind or solar power may not provide the full solution, particularly for deep sea shipping, but they do have an important role over the next decade in hybrid configuration and reducing fuel consumption, enabling shipping to transition away from hydrocarbon-based fuels,” adds Palmer.
Pathway 2 – Bio-energy
In the second projected pathway made by LR and UMAS, bio-energy based fuels will be largely available and gradually taken up in shipping. Electro-fuels will still be used, but to a lesser extent than in pathway 1. Some hydrogen and ammonia produced from natural gas with CCS will be used. fossil fuels will be blended with biofuels to generate low, but not zero, emission shipping by 2050.
Bio-energy capacity will need to grow significantly, reaching approximately 60, 150, above 300 EJ respectively in 2030, 2040, 2050, for it to dominate marine propulsion.
During 2020, biofuels will be used in other sectors and shipping will need to compete to obtain priority access. By 2025, the existing fleet will need to perceive bio-based fuels as the best option. At the same time, further developments in infrastructure and main machinery will take place around other zero-carbon fuels.
The cost of biofuels in the future is very uncertain, but LR and UMAS state that a range of between 846 and 902 $/ heavy fuel oil (HFO) equivalent is possible. Biofuels would have to reduce their projected price in 2030 by 21-26 per cent under a scenario with a carbon price of 50 $/tonne and by 40-43 per cent assuming no carbon price in place to be competitive.
In the immediate short-term, existing infrastructure for HFO can be used to store low-carbon fuels such as biofuel. Biofuels could be used as drop-ins and blends using existing storage systems and supply infrastructure.
Pathway 3 – Equal mix
Both renewable electricity-base marine fuels and bio-based marine fuels would increase in production. Ammonia and hydrogen from natural gas with CCS would also enter the fuel mix. Fossil fuels would still be blended with biofuels so zero-emission shipping would not be completely achievable.
In the next few years, supply infrastructure for various fuels would have to evolve. The third projected pathway focuses on CCS technology, which will need to be perceived as crucial to address climate change and therefore require heavy research to lower its capex. By 2030, the development in CCS would decrease the price of natural gas and the cost of CCs technologies themselves. Fuel cell technology cost would also be cut by around 80 per cent, increasing the competitiveness of ZEVs.
The associated prices of hydrogen natural gas with CCS and ammonia natural gas with CCS will need to be about 420 $/HFO equivalent and 550 $/HFO equivalent.
Projected influences on ship design and bunkering
Over the next several decades, Palmer and her colleagues project that ships carrying low-carbon fuels will be designed to carry out more frequent bunkering. Low-carbon fuels will have a lower energy content and therefore require more frequent refuelling. This will result in changes to bunkering operations and new ship designs will have to reflect this.
Emissions through the supply chain
The emissions on the supply side must not be overlooked. Zero-carbon fuels will also have to have low upstream emissions in order to achieve very low carbon shipping, explains Dr. Carlo Raucci, Principal Consultant, UMAS. “Fuels that may appear suitable for shipping may not be so when we consider the upstream emissions,” adds Palmer.
The report projects that in all pathways the first adopters of technologies will be driven by economic, political pressure and consumer pressure. Market forces alone will be insufficient to facilitate uptake, so policy will be required to create standards to enable first adopters. The next decade will require a development of quality and standards or rules to improve safety as the industry switches from fossil to non-fossil fuels.
The role of LNG
UMAS and LR project that HFO, low sulphur heavy fuel oil (LSHFO), marine diesel oil (MDO), and liquefied natural gas (LNG) would be completely phased out or take a <10 per cent share of the fuel mix in 2050. Ships using LNG would need to consider transitioning to bio-LNG, methane from renewable electricity, or blending LNG with electro-fuels to help continuously reduce LNG’s carbon content.
Which pathway for 2050?
The pathway towards decarbonisation will depend on the evolution of the energy system. It is difficult to determine at this stage which pathway the industry is likely to take, and it is possible that there will be more than one dramatic fuel switch. More consolidation through 2020 and 2030 will be vital in determining suitable and cost-efficient fuels and technologies to establish a clear signal of which pathways shipping will be on over the next two decades.