Shipowners are committing to vessels that will burn low- and zero-carbon fuels, but the availability of such fuels at scale is by no means certain
ONE’s blockbuster contract recently signed with Hyundai Heavy Industries and Nihon Shipyard for no less than 10 ammonia and methanol-ready 13,700-TEU vessels amounts to a vote of faith in the emergence of new fuels on a commercial scale.
The shipbuilding deal was agreed simultaneously with the release of a landmark 232-page study, Fuelling the Fourth Propulsion Revolution – an opportunity for all, that highlights the enormous obstacles that shipping must overcome if it is to meet the IMO’s zero-emission deadlines.
Commissioned by the International Chamber of Shipping (ICS), the report points out “it could require the equivalent of all the world’s current renewable energy production just to supply shipping’s needs for zero-carbon fuel.”
Yet banking on ample supplies of renewable energy, ONE’s new box ships will be able to run on both ammonia and methanol on delivery in 2025. As a bonus, the Japanese line is also looking at the feasibility of carbon capture and storage technology for its newbuilds. Meanwhile, ICS’s latest study, which follows on from Catalysing the Fourth Propulsion Revolution released in 2020, doesn’t pull any punches about the magnitude of the task.
“The scale and challenge to supply alternative fuels to decarbonise the shipping sector is often underestimated,” it said, citing the need for an 18-fold increase in the world’s existing renewable production capacity. And that’s just for shipping, which BP and Shell describe as a hard-to-abate sector.
The likely suspects are biofuels, e-fuels, natural gas and hydrogen derivatives in the future fuel mix for shipping. However, the study points out “new production eco-systems must be built rapidly across the globe to meet decarbonisation goals.”
As the ICS’s study shows, supply is the biggest problem. If the global fleet all adopted green ammonia fuel, like ONE’s new ships, ammonia production would have to rise by 440M tonnes – more than treble current production – requiring 750 GW of renewable energy. This means shipping alone would consume 60% of the world’s current renewable energy production of 2,537 GW.
The battery challenge is described as being just as big. A typical container vessel would require the power of 10,000 Tesla S85 batteries every single day, meaning it would require 70,000 batteries for one week’s sailing.
Another complication is the long lifetime of vessels, up to 35 years. As the International Energy Agency notes, this means some newbuilds may not meet be able to meet the zero-emissions deadline of 2050.
Transoceanic voyages present the biggest hurdle. As the earlier study Catalysing the Fourth Propulsion Revolution notes, current technologies fall well short, especially for transoceanic voyages of 10,000 km or more. “Large container ships typically consume over 200,000 litres of fuel a day and carry over 45M litres in their tanks. The energy required by a large container ship travelling across the ocean on a single day could provide power for a town of 50,000 homes.”
Falling investment
Unfortunately, though, as the study warns, maritime’s total investment in R&D in zero-emissions technologies has fallen by over US$1Bn between 2017 and 2019, down from US$2.7Bn to US$1.6Bn. And in June, the 78th session of the Marine Environment Protection Committee (MEPC) broke up without any agreement on establishing a US$5Bn research fund first mooted in 2019. In a statement, MEPC 78 could only say it was “encouraged by the increasing recognition of many parties that applied R&D is critical if we are to move forward with a major energy transition in the maritime sector.”
Although investment in R&D is down, the EU continues to tighten the screws on shipping’s CO2 emissions, which amount to between 2-3% of the global total.
The European Commission has just contracted class society ABS and decarbonisation consultant Arcsilea to produce a study of the future of energy efficiency measures for ships. The study will analyse the effectiveness of the IMO’s Carbon Intensity Indicator and Energy Efficiency Index for existing ships.
Simultaneously, the EU has proposed the Fit for 55 package of regulation based on a well-to-wake approach. Other regulations could be in the pipeline, including the Emissions Trading System, Energy Taxation Directive and Carbon Border Adjustment Mechanism, some of which have aroused opposition from the shipping sector on the grounds of cost.
Critical costs
In the transition to fourth propulsion, the cost of zero-emissions fuels is clearly critical. A 2019 study by the Danish catalyst company Topsoe forecast the cost of green ammonia from solar and wind energy would be US$21.50–US$45.70 per gigajoule in 2025, dropping to US$13.50–US$15.00 in 2040. A more recent – and encouraging – study by IH Markit on hydrogen estimates a 40% fall in its cost between now and 2025 due to lower production costs of production and of electrolysers.
And it may be that R&D is proceeding nicely without the US$5Bn fund. According to IHS Markit, a handful of European countries pumped US$44Bn into hydrogen alone since 2018. “[That’s] five times more than the global investment from 2005 to 2019,” the research agency says.
Shipping has performed valiantly since IMO began to clamp down on CO2 emissions in 2008, as ICS’s studies makes clear.Overall, international shipping emissions remain below 2008 levels, the baseline year agreed for the IMO GHG reduction targets set for 2030 and 2050. This is in spite of a minimum 40% increase in maritime trade. According to the 2020 study, this represents a carbon efficiency improvement, taken as an average across the global fleet, of about 30% since 2008.
However, supply remains the biggest obstacle. If maritime consumed just 330M tonnes of biofuels a year, for example, it would take the lion’s share of entire global production, with aviation buying up the rest and leaving none for road transport, heating or cooling, and electricity production.
As ONE group waits on its ammonia and hydrogen-ready vessels, it has already conducted trials using biofuels to power the container ship MOL Experience. Also, Singapore-based Eastern Pacific Shipping has trialled GoodFuels’ biofuel for its 2010-built 47,277 tonne medium-range tanker, Pacific Beryl.
