Looking beyond 2020, the IMO has set the industry the target of reducing shipping's carbon emissions by 40% from 2030. But what transition choices can vessel owners and operators make now to achieve this?
Christos Chryssakis, business development manager for maritime at DNV GL — Maritime, has this year been involved in a detailed study, Maritime Forecast to 2050, which examines the energy transition outlook for the coming decades.
“I think most likely we will see an even higher diversification of the fuel mix. We will see a lot of experimentation with many different fuels like LPG, LNG and methanol," Chryssakis says, looking to the decade beyond 2020.
“It is hard to say who [which fuel] is going to win. Until recently, we thought LNG was the main alternative but now we see others emerging.”
DNV GL believes LNG fuelling will continue to increase, albeit from a low base. Its figures show 137 vessels running on LNG, with a further 136 LNG-fuelled newbuildings on order.
Chryssakis also notes the emergence of the first large LNG-fuelled vessels this year, such as Carnival’s 183,000-gt cruiseship AIDAnova and Sovcomflot (SCF Group)’s aframax tanker newbuildings.
“If that trend continues, then LNG can become quite an important fuel,” he says.
Chryssakis admits the class society had expected to see a higher uptake of LNG fuelling. The key deterrents, he suggests, are the relatively high cost of installation and LNG pricing.
He cites clients who say they need a charterer to sign up for 10 years to give them a solid business case to invest in LNG fuelling for their vessels.
“I think the main problem is that the payback is not attractive enough and they could not find finance for that,” he says.
Chryssakis adds the recent increase in owners fitting exhaust gas emission scrubbers onboard vessels before 2020 is another factor that has slowed uptake, as scrubbers effectively compete with LNG as a fuel.
He explains that scrubbers for large vessels have a very strong business case, even for those shipowners that do not like them much. A payback time of one year means owners can get finance and sign up charterers.
Shipowners that install scrubbers now are not going to switch to LNG at a later date as it would prove extremely expensive, he says.
From a technical viewpoint, Chryssakis says methanol is one of the simplest alternative lower-emission fuels but adds its high price has been a barrier. Today, the bulk of ships running on methanol are those that carry the product.
"I think energy efficiency is going to be very important and ships with more efficient designs are going to have an advantage in the market"
He takes a more positive view on LPG, which can be carried as bunkers in pressurised tanks. These are cheaper and easier to install than the cryogenic ones required for LNG, and bunkering would also prove simpler.
For LPG-propulsion systems, there is no problem with methane slip, where the unburned gas is released. This has been an issue previously for some LNG engines, although technology has improved substantially.
With just four retrofits and two newbuildings earmarked to use LPG as a fuel, Chryssakis stresses it will “take some time” to develop.
But he adds: “I think it has the potential. It is a very interesting fuel.”
Looking more broadly, Chryssakis believes one key side-effect of the 2020 sulphur cap is that fuel is going to be more expensive, which will shift the focus onto efficiencies and alternatives.
“We don’t see it yet but in a year from now, fuel prices can be quite different,” he says.
“I think energy efficiency is going to be very important and ships with more efficient designs are going to have an advantage in the market.”
He says this is a good thing, since they will burn less fuel and reduce other emissions — and energy efficiency is one aspect the industry can do something about.
Today’s available fuel alternatives are still fossil fuels and therefore produce carbon emissions. Despite this, Chryssakis says they are useful bridge fuels for reducing emissions towards 2030 and beyond.
But to make a large reduction in greenhouse gas emissions, shipping needs to look to zero-carbon fuels, such as biofuels, ammonia or hydrogen.
He says there has been some early interest in ammonia, although he admits it presents some safety challenges due to its toxic and corrosive nature.
The main problem with hydrogen is cost and the size of the fuel tanks, which would mean more frequent bunkering for deepsea ships.
DNV GL forecasts a fast rise in the number of batteries being installed onboard vessels, most of which are for hybrid-propulsion configurations. But Chryssakis says these are not practical for large ships yet, except for small specific operations.
Today, there is no real zero-carbon fuel available that is practical to use so, he says, owners make their choices on what is required and most cost effective.
Chryssakis adds the IMO's 2030 targets will become more important [to shipowners] over the next few years. But, for a ship ordered five or six years from now, the zero-carbon ambitions for 2050 will be at the end of its lifetime and are likely to remain off the radar for the average shipowner for some time.