From Fossil Fuels To Methanol, LNG & Biofuels
The global marine industry has cast its sights on a huge market upheaval as the shipping industry prepares themselves for the new International Maritime Organisation (IMO) regulations that come into force from 1 January 2020.
Brought about as a means to reduce greenhouse gas emissions by 50% by 2050, the 2020 Sulphur cap will restrict sulphur emissions from ships to only 0.5% worldwide.
This means that an estimated 70% of the fuels currently used by the sector needs to be modified or changed.
FACT: The marine shipping sector currently accounts for 2-3% of the global CO2, 4-9% of SOx, and 10-15% of NOx emissions.
With the impact of these new regulations on the shipping industry weighing heavy, the industry has seen a significant rise in fuel prices including taxes that promote the reduction of Greenhouse Gas emissions.
Ships must now seek a new means to reduce their sulphur emissions to meet these regulations- without jeopardising their trade.
Note: Greenhouse gas emissions are currently not regulated, but there are expectations that Co2 regulations will be implemented in the near future.
One of the ways they are doing this is considering alternative fuels.
Turning a new leaf
The concept of alternative fuels is not a new one, but it has been brought to the forefront of discussions now with the impending regulations being imposed.
What it means for the shipping industry is a huge change, and not a simple “one size fits all”.
Each alternative fuel choice will bring advantages and disadvantages that will require very careful consideration.
Some considerations are as follows:
- The impact that the new fuel could have on the engine and fuel system. Would it require significant modifications or replacements?
- Could the new fuel cause degradation of the engine’s performance?
- How well does it lower the engine sulphur emissions to meet legislations?
- Will the new fuel remain competitively priced?
- Will the new fuel be readily available worldwide for regional bunkering?
- Will the new fuel be safe to use and not present any major environmental risks?
- Will the ship be able to store the new fuel without making any accommodations?
The main threat that these changes bring to the shipping industry is cost:
- Lower sulphur fuels are often more expensive than the current HFO most commonly used
- Installation of equipment to either reduce sulphur or to adapt to new fuel technologies
- Risk of competitor take over during changeover
However, if the vessels don’t adapt they will meet very stiff penalties, including being declared unseaworthy.
The current state of affairs
What is considered conventional fuels?
The current marine fuels that are considered conventional are:
- Marine distillates - Marine Diesel Oil (MDO) and Marine Gasoil (MGO)
- Heavy Fuel Oil (HFO)
Currently, the most common type of bunker fuel used is Heavy Fuel Oil (HFO), derived as a residue from crude oil distillation. It is low-quality, high in sulfur but ultimately - low cost.
FACT: Almost 90% of the world’s marine fuel is used by cargo ships and marine fuel accounts for 20% of total fuel oil demand.
A huge percentage of ships today use diesel engines which can handle a wide range of fuel grades, including the cheaper, high sulfur fuels.
The average sulfur content of HFO is 2.7% with a maximum of 4.5%. With the new legislation, this will no longer be acceptable. As we know, sulphur emissions must not exceed 0.5% come 2020.
The answer - alternative fuels.
Note that there are still fossil fuels that are available which satisfy the current requirements for low fuel sulfur content. These are:
- Ultra-low sulfur diesel (ULSD)
- Low sulfur residual fuel (LSRF)
However, there are predictions that there will be a shortage of diesel fuel and scarcity of lower sulfur distillate fuels in the not too distant future but is still likely to remain as a front-runner until then.
Future planning means seeking other options that can not only meet today's current legislations but address the wider environmental concerns with a safe and sustainable new fuel for the future. As a market, alternative fuels has grown dramatically across both liquid and gaseous fuels. And for good reason - some completely eliminate the hazardous oxides and others can dramatically reduce energy consumption.
In terms of the most common alternative marine fuels that are currently in use or can be used for compliance with the forthcoming legislation, are:
- Liquid Natural Gas (LNG)
Alternative Fuel: Liquid Natural Gas (LNG)
Often heralded as the ‘fuel of the future’ Liquid Natural Gas (LNG) ticks the box when it comes to reducing emissions in line with the 2020 Sulphur Cap - but it has its drawbacks.
LNG is formed by cooling natural gas (primarily methane) to a very low temperature of -162°C where it condenses into a cryogenic liquid.
In the liquid state, LNG has a significantly higher energy content per volume than in its gaseous form. 1 litre of LNG = 600 litres of natural gas. This makes LNG an attractive choice where storage space is critical, however storing LNG requires special equipment which could outweigh this volume advantage.
In terms of diesel fuel, LNG only has around ⅔ as much energy content per volume, but vastly outweighs diesel fuel in terms of lower exhaust emissions.
Advantages of LNG
One of the most predominant beneficial features is its lower exhaust emissions. The use of LNG results in a 100% decrease in SOx, 90% decrease in NOx, and up to 25% less CO2 than conventional fuel oil. That easily adheres to the Sulphur cap of 0.5% SOx emissions.
The other predominant feature that makes it an attractive option for the shipping industry is costs. LNG is said to be marginally cheaper than even low sulphur marine fuels and is expected to remain cost-competitive with residual and distillate fuels through to 2035. However, in practice, the cost of refit, manufacture, transport, and storage could result in LNG not being a viable option for many operators.
Another benefit of LNG is its availability. With new methods the ability to extract natural gas should assure an abundant global supply for many years to come.
Drawbacks of LNG
A major concern is the logistics of de-bunkering. For LNG to become an attractive option there needs to be a global network of LNG specific de-bunkering facilities available in port. Otherwise, the gas would boil off, causing huge methane losses to the atmosphere - which leads to the next concern.
LNG is mostly methane - a very hazardous greenhouse gas. Methane slip will be present as the marine engines burn the gas, therefore methane as an environmental hazard causes a lot of concern over the future of this gas as a green option. Likewise the controversial method of “fracking” to obtain the gas is still a growing public and environmental concern.
LNG is also not compatible with existing liquid fuel systems. This means modifications of existing engines and equipment will need to be made to support LNG. Along with this LNG requires additional safety systems and precautions due to its flammability and low freezing temperature. Which will fundamentally results it larger costs being required to support this fuel.
The environmental characteristics of LNG far surpass those of heavy fuel oil, however, due to the “methane slip” LNG may just be seen as a bridge fuel as even tighter environmental legislation is likely to come into play regarding Greenhouse Gases, possibly making LNG not a viable option.
Alternative Fuel: Biofuels
Biofuels have the potential to contribute to a substantial reduction in emissions and greenhouse gases due to being biodegradable and sulphur free. However, uptake of interest in this fuel alternative remains incredibly limited.
Biofuels are derived from biologically renewable resources such as plant based sugars, oils, terpenes, and animal fat waste. The most promising take solid biomass, municipal solid waste, or recycled carbon dioxide and convert this to high quality low-sulphur fuels.
Currently bioethanol and biodiesel are produced globally, although it is almost exclusively used in the road transportation sector.
However, that is not to say biofuels don’t have a huge potential in the marine sector.
Advantages of Biofuels
Based on existing biofuel technologies, marine biofuels have, and can be designed and produced as ‘drop-in’ fuels which are compatible with current conventional marine engines.
Also the benefit of marine diesel engines having advanced fuel flexibility allows for the development of new biofuel processes combining different grades and blends of biofuels. As well as many engines currently in use being certified for operation on biodiesel or a blend of biodiesel and diesel fuel already.
This would be a huge advantage towards integration, taking advantage of the existing infrastructure already in place saving investment costs of retrofitting.
The other primary advantage is of course that these fuels are compliant with environmental emission regulations. Most biofuels are virtually sulfur free and biodegrade rapidly, contributing to substantial reductions in greenhouse gas emissions and posing far less of a risk to the marine environment in the event of a spill.
Drawbacks of Biofuels
The predominant challenge against biofuels is the lack of knowledge surrounding handling and applying biofuels within the overall supply chain. It is likely that a new supply chain will need to be put in place to ensure the correct production, handling, and transportation methods are available globally.
There is also an issue of availability. Of the biofuels currently produced, only plant biodiesel and bioethanol are produced at a level where they can supply significant volumes of fuel. Even those fuels cannot supply the shipping sector at large, more investment in the production of biofuels will be required and that results in costs.
In terms of price, biofuels are higher than the cost of fossil fuels and is likely to remain so for the foreseeable future until possible mandates on biofuels or carbon taxes help make biofuels more economically competitive.
There are also certain characteristics of biofuels that can cause technical issues such as; stability during storage, biological growth (biofouling), acidity, plugging of filters, and increased engine deposits.
Therefore additional procedures will need to be in place to avoid aiding any of these issues including adapting the engine and fuel system, otherwise the consequences could include engine shutdown.
Development for biofuels that are compatible with marine engines is still very much in its infancy. Both technical and logistical issues need to be resolved before biofuels can be introduced at a larger scale in the marine sector.
Alternative Fuel: Methanol
Methanol has emerged as a strong potential marine fuel alternative due to its energy-efficiency, availability, and smooth transitioning abilities. But it is yet to be seen if it can meet the huge global market needs.
A clean-burning fuel that produces fewer air pollutants than conventional fuels such as SOx, NOx, and particulate matter. It easily meets environmental regulations and also improves air quality.
Methanol is an alcohol-based liquid chemical produced from natural gas but can be produced from renewable sources such as biomass and recycled carbon dioxide (therefore can also be considered a biofuel in this circumstance).
It meets environmental fuel regulations and is a cost-effective, readily available alternative with growing demand.
Advantages of Methanol
Methanol quickly dissolves in water and biodegrades rapidly making it lower-risk (spills). It's considered a clean-burning fuel as it offers significant reductions of NOx by 80% and 99% reduction in SOx emissions, making it a suitable choice to meet the upcoming legislations and comply with even the most stringent future emissions regulations.
In terms of converting to methanol, both new builds and the transition is significantly less costly than converting to LNG. This is due two-fold to the fewer required technical and operational changes, along with the simplicity of storing methanol. This makes handling, distribution, and bunkering systems very similar to those used for conventional marine fuels.
Methanol can be used in a dual-fuel concept, meaning a small quantity of marine fuel oil is used to initiate the ignition process, then it is followed by combustion of methanol fuel. This not only results in saving costs but it also means ships that have been converted to operate on methanol can begin blending to reduce their carbon footprint while still being cost effective.
The fact that Methanol can also be made from renewable sources such as recycled carbon dioxide and biomass makes it an attractive option for those wishing to pursue a sustainable future.
Drawbacks of Methanol
There is a slight cost increase than LNG, however as stated Methanol is a simpler transition and therefore those costs are likely to still result in methanol being a more economical choice.
Methanol is a dangerous substance - it has a relatively low flashpoint, is toxic when inhaled, ingested, or handled, and it increases the risk of corrosion. These characteristics will call for additional safety barriers for both the staff and the fuel systems, which could increase costs.
Where Methanol really needs support is in the logistics of bunkering.
The infrastructure needs to support a widespread distribution. However, this is still more feasible in terms of cost and ease than LNG. Existing bunkers can be converted to handle methanol and onshore storage with only minor modifications due to cryogenic facilities not being required.
Ultimately, Methanol is an exciting and very viable option with benefits to both the environment and the shipping industry. With support and bunkering development Methanol could be a very attractive future marine fuel.
Without doubt, transitioning to any of these alternative fuels will see a huge reduction in environmentally damaging emissions.
But without incentives such as costs, and support with logistics, the shipping industry is going to face a huge and daunting challenge to comply with environmental regulations without damaging their trade.
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