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SEA LNG: Compare ‘apples with apples’ to cut emissions and costs

Ship owners will lock in higher emissions and cost decarbonisation pathways if they choose alternative fuels which will not be available at commercial scale in near future.

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Global multi-sector industry coalition SEA-LNG on Thursday (7 July) released a framework for comparing the emissions and cost implications of adopting future fuel pathways and urges the industry to make like-for-like comparisons when discussing alternative marine fuels. It believes LNG as a marine fuel delivers immediate GHG benefits and a lower risk, lower cost, incremental pathway to zero emissions:

The industry is making newbuild investment decisions now that will impact greenhouse gas emissions today and for the next 25-30 years, the typical lifetime of a vessel. It is essential their assessments of alternative marine fuel pathways are made on a like-for-like, or “apples with apples” basis. Discussion of alternative fuels too often compares the green versions of ammonia and methanol with fossil, or grey, LNG. The reality is that all fuels share a common pathway from fossil-based versions, produced from natural gas to hydrogen-based, synthetic fuels. These synthetic fuels will only become available as and when sufficient renewable electricity and electrolysis capacity comes online to produce them.

Decarbonisation will not be a “big bang” process where the industry moves in a single step from fossil to zero-emission, renewable fuels. It is likely to take place incrementally as fuels are gradually decarbonised through the addition of low and zero-emission drop-ins.

Shared fossil feedstocks

This transition pathway is illustrated in Figure 1. Almost all alternative fuels today, including LNG, are fossil-based, in fact most are produced from natural gas. LNG is simply natural gas that has been cooled to the point it liquefies. Natural gas, and sometimes coal, is also the feedstock for almost all methanol, ammonia and hydrogen production.

Uniquely, fossil LNG offers significant greenhouse gas emissions reduction when used as a marine fuel compared with VLSFO – up to 23% on a full lifecycle (Well-to-Wake) basis according to an independent study by Sphera . By contrast, the use of fossil methanol, ammonia and (liquid) hydrogen results in emissions far higher than those associated with VLSFO because of the large amounts of energy required for their production.

A biofuel market

Emissions can be significantly reduced through the use of fuels derived from sustainable biomass. BioLNG is already commercially available in Europe as a marine bunker fuel today and has penetrated the heavy-duty vehicle road transportation sector in both Europe and North America. Biomethanol also exists in limited quantities, but mainly as an industrial chemical feedstock.

The ultimate, zero-emissions destination for all alternative fuels is for them to be synthesised from hydrogen produced from renewable electricity. Once this renewable hydrogen building block exists at scale it is possible to produce e-LNG, e-methanol, e-ammonia or e-hydrogen. It is important to note that around 70% to 80% of the cost of producing these e-fuels is associated with hydrogen production

We need to consider the pathway, not simply the destination

The implications for the climate and for shipowners can be best understood by looking at an example of investment decision. In Figure 2 we illustrate the case of a 14,000 TEU container vessel coming into operation in 2025, dual-fuelled with a 25-year lifespan and with renewable fuels becoming available at increasing scale from about 2030 onwards.

SEA LNG: Compare ‘apples with apples’ to cut emissions and costs

Modelling the emissions over the life of the vessel we can see that LNG offers immediate GHG reductions decreasing to zero-emissions by 2050. The bar chart shows an overall emissions reduction for the LNG pathway of more than 50% over the lifetime of the vessel, compared with VLSFO; for methanol and ammonia the corresponding reductions are 37% and 28%.

If we now look at the methanol and ammonia pathways, they also offer lifetime emissions reductions, but the reductions are smaller – 37% and 28% respectively – as they start from a “worse” place. Fossil methanol emissions are 14% higher than VLSFO on a full lifecycle basis; for ammonia the corresponding number is 47%. This is likely to mean owners and operators choosing methanol and ammonia pathways will be forced to continue using VLSFO, postponing emissions reduction for several years.

For methanol and ammonia to achieve emissions parity with LNG they will require blends of approximately 30% renewable methanol and 50% renewable ammonia immediately. The fossil versions of methanol and ammonia are already significantly more expensive than LNG and the renewable versions are likely to cost multiples more than their fossil equivalents. This will make the starting points for these pathways considerably more expensive than beginning with LNG. Note, this ignores any indirect costs associated with creating new bunkering infrastructure, which will be necessary for e-methanol, e-ammonia and e-hydrogen.

Waiting is not an option

In summary, committing to solutions which rely on alternative fuels which will not be available at commercial scale in a renewable form for the foreseeable future, means owners locking in higher emissions and higher cost decarbonisation pathways. LNG as a marine fuel delivers immediate GHG benefits and a lower risk, lower cost, incremental pathway to zero emissions.

Steve Esau, Chief Operating Officer, SEA-LNG said: “When looking at the advantages and disadvantages of alternative fuels, we should be assessing the characteristics of each fuel type on a like-for-like basis. Greenhouse gases in the atmosphere are a stock problem as well as a flow problem. The industry needs to consider the pathway to decarbonisation, not just the destination. Waiting is not an option.

“The consequences of delaying the shift away from fuel oils, which will cause faster rising cumulative emissions, meaning the challenge to reduce atmospheric greenhouse gases will be harder. Shipping needs to assess fuel pathways based on how they can deliver decarbonisation benefits now, and in the future, and also the likely cost to society of these pathways”.

 

Photo credit: SEA LNG
Published: 8 July, 2022

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Alternative Fuels

WEF: South Africa has great potential as a production and bunkering hub for zero-emission bunker fuels

Report highlighted a clear demand signal for bunkering ZEF in selected South African ports will be needed to realise the country’s opportunity to become a global hotspot for zero-emission shipping.

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WEF: South Africa has great potential as a production and bunkering hub for zero-emission bunker fuels

South Africa has great potential as a production and bunkering hub for zero-emission shipping fuels – but it needs global demand to get the ball rolling, according to a report by the World Economic Forum recently.

The white paper, titled Decarbonising South Africa’s Shipping and Trucking Sectors, presented the findings and recommendations from a First Movers Coalition workshop held in South Africa in March 2024, which focused on decarbonising the country’s shipping and trucking sectors and developing its potential to produce green hydrogen.

The report said more than 200 dual-fuel methanol vessels have been ordered globally, requiring over 20 Mt of e-methanol fuel per annum to achieve 100% zero-emission operability.

However, fuel availability at that scale is expected to be challenged until at least 2030-35. This demand creates an opportunity for South African producers to secure early customers and sign advance offtake agreements, providing certainty for new projects and improving investment prospects.

The study noted that ammonia also brings advantages as a zero-emission fuel (ZEF), such as high carbon-emission savings, unlimited feedstock (nitrogen) availability and existing logistical infrastructure around the globe. 

While ammonia engines will reach the market from 2025 at the earliest, major carriers like Trafigura and BHP are already placing orders for dual-fuel ammonia vessels.

The World Bank has conducted a pre-feasibility study on establishing green shipping fuel value chains at the ports of Boegoebaai and Saldanha Bay. The study identifies ammonia as the preferred ZEF production choice for South Africa, due to the scarcity of biogenic carbon dioxide to produce methanol. 

“Most of the fuel’s cost comes from hydrogen feedstock – but by leveraging abundant wind and solar supply, the two ports will be able to generate renewable electricity at scale to produce competitive green hydrogen for local industry use (e.g. green steel) and to produce green ammonia for export to the global shipping industry,” the report said.

On bunkering, the report stated political disturbance and security risks in the Red Sea during 2023 to 24 forced many shipping operators to abandon the Suez Canal and re-route their cargo around the Cape of Good Hope. 

Even without those risks, operators shipping lower value or less time-critical cargo may use the Cape route rather than the more expensive Suez Canal, adding two weeks to a ship’s voyage time from Asia to Europe.

“This extra travel time – plus the lower density of zero-emission fuels – could compel vessels running on ZEF to bunker in South Africa before reaching Europe,” it said. 

“Access to zero-emission fuels therefore opens up the possibility of South African ports positioning themselves as bunkering hubs to supply passing shipping traffic.”

“Furthermore, the potential for South Africa to produce e-methanol and e-ammonia has triggered plans to develop ‘green corridors’ – effectively routes connecting ports for vessels to sail on ZEF.

However, the report highlighted a clear demand signal for bunkering ZEF in selected South African ports will be needed to realise the country’s opportunity to become a global hotspot for zero-emission shipping.

“As local demand may take some years to build up, certainty from global demand will play a key role. It is also important to assess different uses for hydrogen beyond maritime fuel, to determine how multi-sectoral offtake can improve the business case for potential project developers,” it said.

Note: The full white paper, titled ‘Decarbonising South Africa’s Shipping and Trucking Sectors’, can be viewed here.

 

Photo credit: World Economic Forum
Published: 24 June, 2024

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Biofuel

DB Schenker to ship Avolta cargo between Europe and US with bio bunker fuel

All containers that Avolta will move on the Barcelona – Miami route, using biofuel, will be shipped on low emission through application of waste-based marine biofuels and additional units of sustainable marine biofuel.

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DB Schenker

Travel retailer Avolta recently said it entered an agreement in Spain with logistics service provider DB Schenker for the transport of goods using marine biofuel between Europe and the United States.

From now on, all containers that Avolta will move on the Barcelona - Miami route, using biofuel, will be shipped on low emission through the application of waste-based marine biofuels and additional units of sustainable marine biofuel, to achieve additional compensation of the biofuel’s upstream emissions.

“This biofuel switch could prevent over 150 tons of CO2e Well-to-Wake emissions per year, based on Avolta’s 2023 container volume on this route, reducing up to 84% of the CO2 emissions,” the firm said.

The fuel used is Used Cooking oil methyl ester (UCOME) and is based on renewable and sustainable sources, mainly waste cooking oil. 

The application will be guided by the Book & Claim System, a set of principles that have been developed through a global, multi-stakeholder process with third-party validation to ensure that the use of this chain of custody model has full traceability and credibility, as well as a demonstrable climate impact.

Camillo Rossotto, Chief Public Affairs & ESG Officer Avolta, said: “We are taking a significant step forward towards decarbonising our shipments and route transportations.”

“This agreement represents the starting point of the transitioning to biofuel for ocean freight which will contribute to decarbonising our logistic emission. Our company's commitment to sustainability is firm and long-term and, as proof of this, we are planning to increase the volume of containers transported using biofuel, advancing in the sustainable and low-emission transportation industry."

Miguel Ángel de la Torre, director of maritime transport at DB Schenker in Iberia, said: "Our mission is to help, facilitate, and guide our customers in the sustainable transformation, and on this occasion, we are doing so by offering this biofuel so that they can convert their freight transport into low-emission transport.”

“In this way, our customer Avolta is not only pioneering and helping to reduce emissions but is also ahead of the new regulations and associated benefits that will be tightened in the coming years.”

 

Photo credit: DB Schenker
Published: 24 June, 2024

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LNG Bunkering

MAN Energy Solutions rejoins SEA-LNG coalition

‘MAN ES, alongside other members of the SEA-LNG coalition, are making great strides in tackling methane slip in engine technologies where it still exists,’ says Peter Keller, SEA-LNG chairman.

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MAN Energy Solutions rejoins SEA-LNG

Global multi-sector industry coalition SEA LNG on Thursday (20 June) announced that MAN Energy Solutions (MAN ES) will rejoin its coalition.  

As a provider of flexible and powerful propulsion solutions for LNG marine applications, SEA LNG said MAN ES caters to the growing demands of the shipping industry for LNG propulsion and equipment across dual fuel LNG-powered ships, LNG carriers, FRSUs, LNG feeder and bunker vessels, as well as for gas supply infrastructure. All MAN ES technology is fully compatible with net-zero biomethane and e-methane.

“MAN ES’s technical expertise adds to the technical skills and experience of SEA-LNG members, already achieving reductions in greenhouse gas (GHG) emissions. MAN ES’s two-stroke high-pressure engine technology is one of those delivering virtually no methane slip in the LNG combustion process today,” it said.

In addition, MAN ES is making significant progress in eradicating methane slip in its four-stroke engines. Over the last ten years, MAN ES has already been able to halve methane slip in its four-stroke gas engines and is aiming for a further 20% reduction by continuously improving the combustion process.

MAN ES's IMOKAT II project has secured investment from the German Federal Ministry for Economics and Climate Action to develop an after-treatment technology to further reduce methane slip from its four-stroke engines, ultimately aiming for a 70% reduction of methane emissions at 100% load.  

Stefan Eefting, Senior Vice President and Head of MAN PrimeServ Germany at MAN Energy Solutions, said: “While shipping remains the most environmentally-friendly form of transport, the many vessels powered by our technology means that MAN Energy Solutions has a special responsibility to help move the industry to net-zero; we are very happy to work with like-minded partners in achieving this.”

“Our unique ability to assess the future-fuel mix is, in great part, based on our dual-fuel engine development, which promotes LNG and other alternative green fuels that have a key role to play on the path to decarbonisation.” 

Peter Keller, SEA-LNG chairman, said: “The shipping industry’s decarbonisation drive is at a tipping point as global and regional regulations begin to impact shipowners financially.”

“As these regulatory changes continue to be felt, LNG as a marine fuel, and its decarbonisation pathway through liquified biomethane and e-methane, offers the most practical and realistic solution. The LNG solution is playing a critical role in enabling emissions reductions, starting today.”

“If we want to continue to unlock this pathway’s potential, we need the right expertise and MAN ES’s experience and insights will be critical to ensuring LNG, biomethane and e-methane firmly take their place in the basket of alternative marine fuels.”

Keller continued: “We are proud to represent the entire LNG value chain, and the addition of MAN ES only adds to our roster of industry-leading first movers to promote the LNG pathway. In particular, MAN ES, alongside other members of the SEA-LNG coalition, are making great strides in tackling methane slip in engine technologies where it still exists. With constant advances in technology, we are confident the issue of methane slip can be solved within this decade.” 

 

Photo credit: MAN Energy Solutions
Published: 24 June, 2024

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