Cleaner marine fossil fuels – Do they exist?
The ongoing pandemic has taken a significant toll on people across the world beyond anyone’s imagination. However, if there is something positive to take from this terrible crisis, it could be the welcome change of cleaner air and a clear blue sky in some of the most polluted megacities around the world. It is a first taste of what it could be like in a low-carbon future. As the world slowly begins to return back to normal business, however, the risk is that the largest ever global air pollution “experiment” we are conducting may become nothing but a memory. How can we, the maritime industry, contribute to ensuring that the skies will remain blue even after the pandemic has passed?
Today’s bunker fuels predominantly consist of various residual fuels and to some extent distillates. Fossil fuels that are literally the bottom layer of the oil distillate barrel, which when combusted releases large amounts of harmful emissions. Obviously, with various – and, nowadays, mandatory – exhaust gas treatment systems, the majority of the harmful emissions can be mitigated. However, exhaust gas treatment systems add a significant amount of weight to the ship, and more auxiliaries onboard also increases complexity, which consequently increases fuel consumption. It is time for the shipping industry to begin cleaning up its dirty fuels.
When speaking about emissions, it is worthwhile to separate them into two categories. To keep it simple, let’s call them local emissions and climate/global emissions.
Local emissions are pollutants that contribute to the deterioration of human health and loss of well-being. Locally, they also have a direct impact on the natural flora and fauna. Local emissions emerging from the ship smokestacks are mainly nitrogen oxides (NOx), sulfur oxides (SOx) and fine particulate matter (PM). Today, only SOX and NOx emissions are regulated.
Climate emissions or global emissions directly contribute to global warming, but they have no – or only very low – direct impact on human health and the natural environment in the short term. Where these emissions are emitted is not relevant either since climate change is a global problem. The emissions from shipping which primarily contribute to global warming are CO2 and CH4.
In the fossil fuel portfolio, there usually is a conflicting interest between the two categories. Generally, the lower amount of local emissions emitted during combustion, the more GHG-intense the fuel is, and vice versa. Renewable fuels could solve the global emissions problem, but they are not yet available on the commercial fuel market. As a short-term strategy, shipping may, therefore, need to introduce other alternatives such as “cleaner” fossil fuels, which could later offer an easier transition to renewables, once the production of such fuels takes off. While alternative fossil fuels do not solve the issue with global emissions, they can significantly reduce the harmful local emissions. Consequently, to meet the emission requirements, the exhaust gas treatment systems may be reduced or in the best case not needed at all, which in turn will lead to a more efficient ship, making it a win-fail-win situation, so to speak.
The maritime industry consumes approximately 320 million tons of fuel annually, of which around 70% are residuals (HFO), 28% distillates (diesel or MGO) and the remaining 2% are other fuels (mainly LNG). Due to the new IMO 2020 regulations, a reshaping of the bunker fuel market is to be expected, particularly with an increased demand of distillates and very low sulphur fuel oil (VLSFO) – at least initially. Although alternative fuels are being introduced to the marine bunkering market, they will continue to only comprise a small share of the total fuel demand due to limited infrastructure support. While their total share of the fuel market will remain small, they can still be worthy alternatives to consider for meeting the ever-increasing emission regulations. Some of the most prominent fossil fuels to replace the dirty bunker fuels are LNG, LPG and methanol.
LNG is leading the race when it comes to alternative marine fuels. Currently, there are 165 LNG-powered ships in operation, and an additional 154 confirmed orders for vessels that will be built in the next five years. The annual LNG consumption in shipping is approximately 6.5 million tons, or about 2% of the total marine fuel consumption. While the uptake of LNG in newbuilds is growing, the economics of LNG retrofits have remained challenging. However, due to the extensive experience in LNG newbuilding projects and technology improvements, it is no longer a question of if but rather when LNG will also become a feasible retrofit solution.
LPG, short for liquified petroleum gas, is any mixture of propane and butane in liquid form. Due to the relatively high boiling points of gas, LPG can be kept as liquid at elevated pressure and ambient temperatures and, therefore, it is easier to store than other gaseous fuels such as LNG. LPG is primarily derived from two sources: as a co-product recovered during the extraction of natural gas or as a by-product from oil refining. Global LPG production is around 310 million tons, but is expected to increase, especially in North America, which is attributed to the substantial increase in shale gas production. Currently, around 60% of the world’s LPG originates from the extraction process of natural gas, and the remaining 40% from oil refining. As a marine fuel, however, LPG is still in its infancy, but with the ever-tightening emission regulations being implemented across the shipping sector, LPG is becoming an ever more prominent solution. To date, there are no ships operating on LPG, but there are five LPG-fuelled ships on order with the first set for delivery in 2020. For retrofits, the interest of LPG as fuel is also emerging, with four conversions expected in 2020. All the planned newbuilds and conversions are mainly gas carriers.
Methanol is often considered as the dark horse in the alternative fuel race. Methanol is a worldwide produced chemical with annual production around 100 million tonnes The main feedstock, which is also methanol’s major downside today, is that it is predominantly produced from fossil fuels, mostly from natural gas, but coal and residual fractions from refineries are also common production sources. Since methanol is a fuel that is manufactured, its well-to-wake CO2 emissions are naturally higher than that of the extracted fuels LNG and LPG. However, as methanol is a liquid at ambient conditions, it is easier to store than the other alternative fossil fuels LNG and LPG. Consequently, the investment costs into infrastructure and storage tanks should be lower. Methanol is, therefore, considered as one of the most promising fuels for retrofits. Methanol as fuel in the maritime industry is also to some degree known, and both operational experience and test results have shown that methanol could comply with even the most stringent emission reduction legislation. Still, the uptake of methanol as fuel in shipping has been low. Currently, there are only 12 methanol-fuelled ships in operation or on order.
It is tough to make predictions, especially about the future. There are no obvious show-stoppers for any of the alternative fossil fuels, but the ultimate decision will be based on economics and availability. The dilemma shipowners are facing with alternative fuel choices can be summarised with the following aphorism: available, cheap and clean – pick two.
There is no magic bullet to reduce harmful emissions from shipping; all the solutions will be needed. While alternative fossil fuels’ share in the bunker fuel mix will remain small in the coming years, they will be one of the many important tools to reduce harmful emissions from shipping. With its renowned competence in the marine sector, Elomatic can offer comprehensive and tailor-made services on how to introduce alternative fuels:
- Retrofit feasibility – from concept to reality
- Technology readiness for alternative fuels
- Transparent fuel lifecycle emissions, conversion and operational cost estimations
Let’s explore the possibilities together for a cleaner marine industry!