By Dr. Shahrin Osman, Regional Head of Maritime Advisory, Director of Maritime Decarbonization and Autonomy Centre of Excellence Asia – Pacific at DNV
The growing stringency in environmental regulation has compelled the maritime industry into a major shift in fuels. Regional and national lawmakers are also demanding a faster energy transition attributed to a changing climate of public opinion, affecting both financiers and charterers.
Shipowners today are hence experiencing increasing pressure to reduce their greenhouse gas footprint as part of the decarbonization journey.
Therefore, as an industry, many wonder how we can accelerate the transition to carbon zero fuel. As DNV sets out to answer that question, we strongly believe that fuel flexibility is the key to staying competitive in an uncertain fuel future.
As policy developments and stakeholder’s engagement over the next few decades will drive shipowners to find new solutions, our decarbonization experts have inaugurated a new carbon risk framework in the Maritime Forecast to 2050 report.
The aim is to allow shipowners to assess the technology, fuel, and energy landscape, therefore empowering them to make informed business decisions which keep their carbon emissions below the stipulated level.
This framework also gives a detailed assessment of fuel ready, fuel flexible solutions and evaluates vessel design implications.
“Fuel Ready” is a class notation that offers shipowners the choice to prepare for a later conversion to a myriad of various alternative fuel options, and “Gas fuelled ammonia” for ammonia fuelled vessels, to stay in the lead of shipping’s ever tightening carbon reduction restrictions.
In the report, a decarbonization stairway model was also introduced to show how individual owners can adapt to reduce their carbon emissions.
To enable the transition to carbon zero, LNG has set the precedence for clean-burning natural fuel and is excellent for future viability. With research in LNG as fuel dating back to more than two decades ago, it is therefore certainly in a reliable position as a transition fuel.
Our key finding was that installing a dual-fuel LNG engine is a robust choice today enabling future flexibility. Advantages include:
Especially in the deep-sea segment, dual-fuel solutions and alternative fuel “ready” solutions could smooth this transition, by laying the groundwork for a future retrofit.
With a combination of technologies such as adaptable storage tanks, onboard systems, and shore-side fuel infrastructure, this could give the industry more options as new fuels and technologies surface.
Taking a long-term perspective, investing in LNG not only reduces our carbon footprint and allows the reliable consolidation of renewables, but it also facilitates the production of hydrogen-based fuels that are carbon neutral, produced from a carbon capture and utilization process- like LNG.
DNV’s Alternative Fuel Insight (AFI) portal closely monitored the newbuilding trend and at the year-end 2021 approximately one third (based on GT) of all new-build tonnage was ordered with alternative fuels. This included over 240 ships fuelled by LNG, 48 with LPG, 22 with methanol, and 4 with hydrogen.
Our AFI portal also reported nearly 200 vessels with an LNG fuel system were ordered in 2021, making last year a record-breaking one for LNG.
The emergence of bio- and synthetic LNG would allow owners to switch to a low carbon fuel without having to make any additional adjustments on board.
DNV is a long-time advocate of LNG and an early pioneer of its use as a marine fuel, our rules for gas-fueled ships were first issued very early back in in January 2001 – more than 20 years ago.
Since then, we have gained considerable experience, and comprehensive efforts have been put into the development of the regulatory framework for gas-fuelled ships, including the development of the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code).
So, what is the trend for newbuild ships like over the next few years?
We see an increase in deep-sea LNG-fuelled ships globally, and in batteries for full-electric or part-electric operations in the short-sea segment.
The technical applicability and commercial viability of alternative fuels will, however, vary greatly for different ship types and trades. Deep-sea vessels have fewer choices compared with the short-sea segment.
Deep-sea shipping involves large ocean-going ships that need to store very huge amounts of energy, where the main proportion of energy consumption relates to propulsion of the ship at steady speed over long distances.
Hence, options for the deep-sea trade are still limited to LNG and LPG, or to biofuels which are not yet prevalent and are more costly than LNG and LPG.
LNG is not the end game, but it is the starting point to carbon zero. With the IMO GHG reduction targets knocking at our doors, we cannot afford to wait. The industry must take a proactive stance and ensure that the potential of cleaner fuels is well harnessed.
Published: 10 March, 2022
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