In shipping, the year 2020 will remain synonymous with the global shift to a fuel having lower sulfur content, dictated by the need to preserve the environment and public health. Due to its new properties, running on this fuel requires a lot more effort from crew and purifiers on board, and from the shipowners to pay a lot of money for the compliance.
VLSFO arrived as a whole new product with its own price, which as expected was much higher than HFO but still dependent on Brent value that has shaped for years the price variation of HFO and LSMGO. This extra cost had to be covered by the shipowners, and this had a tremendous impact on the market. Sadly, in the past only the fuel properties and availability were the focal point of discussions, leaving the market distortion aside.
Since we are just at the dawn of more and more stringent environmental regulations, we need to always bear in mind the cost impact of the new measures and the required solutions.
This is very important, because although several measures can add to meeting the IMO targets for the reduction of CO2, the adoption of a new fuel seems ultimately inevitable. It is therefore imperative to study which fuel comes as the optimum solution both in terms of CO2 reduction, and of the cost involved.
In Project Forward we believe that LNG is the right selection.
There are various studies which suggest that the main barriers for the adoption of LNG as fuel, are the infrastructure and the extra cost of building an LNG fueled ship. Both are closely related to the size of LNG tank. On top, we need to add the position of charterers and the expected cost benefit from the use of LNG.
The infrastructure develops very fast, and the announced FID’s for new bunker stations are very encouraging. If one orders an LNG fueled ship today by the time that the ship will be delivered from the yard, LNG will be available in locations that are strategically located along all shipping lines. This will certainly reduce the volume of required tank. Only the bunker station in South Africa allows the tank volume required for global tramp trade of a bulk carrier vessel to be reduced by approximately 30%. And this will certainly have a very positive impact on the price of new building ships.
The price of the LNG fueled kamsarmax design that we have adopted in Project Forward has changed considerably throughout the years. Our first contact was with S.Korean yards, and to our great astonishment, the extra cost we received was double to what we had initially expected.
But even in China after the first round of contacts with yards, the prices were still very high.
We made a closer approach to the Chinese yards, which resulted at improved prices but also made us realize that the huge extra cost was from the membrane tank that the yards had not mastered yet.
So we changed type and position of tank, and delivered a design offering a universal concept which can work for all types and most sizes of ships, by positioning the LNG tank in engine room in the free space available above the low height, four stroke engines we have selected. This reduced the cost, while at same time yards finally realized they can reduce their price by removing exaggerated risk factors, which elevated unreasonably their cost estimation.
Without the bunker station in South Africa our LNG should have a volume of 2.500 cubic meters. If we consider the addition of S.Africa in the bunkering infrastructure, the volume can be reduced to 1,500 c.m, with a proportional impact on ship’s price
According to Maersk, the best positioned fuels for research and development into net zero fuels for shipping are:
- Methanol, which is the easiest to build energy carrier. However, the transition of the industry towards alcohol-based solutions is yet to be defined.
- Biomethane has a potential smooth transition given existing technology and infrastructure. The challenge however is ‘methane slip’ – the emission of unburned methane in the air which amplifies the greenhouse problem
Ammonia is highly toxic and even small leaks can create major risks to the crew and the environment. The transition from current to future applications is also a huge challenge for ammonia.
- The methane slip is a very challenging problem for engineers. Since the amount of unburnt methane highly depends on a complex relationship between the reaction kinetic of the fuel and the engine design, it is a problem that can be handled with technological advancements and engine makers are already working very hard to minimize the methane slip.
With ultra-modern technologies, Wartsila who is our selected engine maker in Project Forward, has achieved to reduce the methane slip very close to 1.0 g/kWh which is even lower than the rival two stroke low pressure engines.
The methane slip in the first DF engines was quite high, but very soon, even with the most stringent criteria, and no matter what is the time horizon assumed for the calculation of warming potential, methane will offer a clear and very notable reduction of CO2.
Ammonia has started to receive a lot of interest as fuel. Although the combustion of ammonia does not produce CO2, its production today generates 1.8 tons of CO2 per ton of ammonia. The production of ammonia accounts for 1% of global CO2 emissions, but if ammonia would become the new global fuel for shipping, its production alone would account for almost 5% of global emissions when today shipping stands for only 2.1%.
An ammonia fueled car would involve the production of about 800kg of CO2 per year more than a gasoline driven one. And it costs less to produce synthetic gasoline than ammonia.
Therefore, in order to consider ammonia as a green fuel, new methods of productions must to be found and even when this happens it will still be questionable whether ammonia is the optimum solution, for the reasons mentioned below :
Ammonia as fuel has :
•Very high auto-ignition temperature (651 °C)
•Low flame speed
•High heat of vaporization
•Narrow flammability limits (16-25% by volume in air)
Therefore, as fuel in diesel engines it requires extremely high compression ratios, practically prohibitive for the strength of the engines. And for Otto engines, there is no experience running with today’s state of the art design standards.
To burn effectively, ammonia has to be mixed with another fuel, meaning we will need two fuel tanks onboard. Furthermore, ammonia has to be stored at approximately 17 bar to keep it in the liquid phase when the ambient temperature increases. The fuel supply pressure will be approximately 70 bar and the injection pressure 600 to 700 bar.
When carrying out engine maintenance the crew will have to wear gas masks, while similar to methane slip we need to address the serious issue of ammonia slip.
Apparently, the selection of fuel is a very critical decision and in the same line with what we discussed earlier, recent studies show that the biggest challenge with the new fuels is on the fuel cost side and the huge transformation needed to produce and distribute new fuels. And sooner rather than later, we will have to go carbon negative, which means that carbon capture will play an important role.
We have seen how closely the fuel price is related to Brent and a very good reason to talk about LNG is that today its price has decoupled from Brent and is available not only at an oil index price but has its own spot price as well.
Today this is valid in Rotterdam but as market develops rapidly, same option will be available very soon in other major bunkering hubs as well.
Apart from the synthesis of recycled carbon with hydrogen from electrolysis of water, less amounts of renewable energy can be used in a very elegant manner for the electrochemical conversion of captured CO2 to methane.
This process doesn’t need so much energy for the electrolysis of water but can integrate the renewable energy in shipping industry and offers a long term, large-scale storage in methane as an energy carrier.
Studies attribute a cost of carbon neutral methane produced this way to 800 $ per ton, when the green ammonia comes at 1,500 $ for the same energy content.
Spot LNG has a very low price and offers much better cost savings than HFO, and as it is decoupled from Brent, the savings from spot LNG are more guaranteed from those of HFO.
Assuming a moderate carbon tax of 30 $ per ton CO2, when studies attribute it up to 80 dollars per ton, our studies show that, inclusive the carbon tax :
- The use of fossil LNG offers a cost saving of about 2 million $ per year compared to VLSFO
- We can meet the IMO emission targets for 2050 by running on a fuel mix of biomethane and fossil natural gas. The cost of running on this fuel mix is the same with the cost of running on VLSFO, in which case obviously the target of emission reduction is not met.
- The methane from electrochemical conversion of CO2 is still very expensive, but the potential to become less expensive is very big.
These conclusions clearly prove that methane is a truly sustainable path and not a bridge fuel.
Setting efficiency targets for existing ships is another challenge we will soon encounter through the EEXI. We expect that for meeting this goal, and depending on the original energy efficiency of a ship design, the speed will have to be reduced between 1.0 and 2.0 knots.
In such case, the shipowner will have the option to either invest in technology and make a ship more competitive, or sail at lower speeds. This will definitely stratify the market.
But investing to LNG makes a lot of sense as : the conversion cost for the low pressure ME-GA engine will be reasonable, the volume of needed tank moderate, and as we have seen the fuel cost benefit very rewarding.
We always need to remember that all the discussions about new fuels are made on the basis to protect the environment, and that there is a substantial cost involved with the required changes.
Apparently, one would not expect that these costs will be paid only from the shipowners. Besides the environment is everybody’s garden and everybody has a share in this cost.
Until now, the position of charterers was that they receive the biggest part of the fuel cost benefit. This leaves no incentive for a shipowner to invest and of course, it delays very much all green projects.
To counteract this, we suggested to charterers to hire the LNG fueled vessels at the same price with an ordinary liquid fueled ship, render to us the cost they would normally pay for fuel oil, while we would be responsible for the supply of LNG and receive the costs benefits, if any. And when this cost benefit would become important, we would be happy to share with the charterers.
For this we had come to an agreement with Eniram for the transparent calculation of fuel consumption which will be based on extensive model testing with waves of various height, so that the performance of the vessel can be predicted very accurately under all sailing conditions, but this was not accepted.
- The developments in LNG bunkering infrastructure, allow to engage on global trade with medium sized tanks, of moderate cost
- Shipyards realized they need to rationalize their cost estimation for building an LNG fueled ship
- The technological advances will soon minimize the Methane slip
- Methane is a global fuel and shipping cannot be hold responsible for losses of methane in the production and distribution chain; this is a problem that can be easily tackled, but from other involved industries
- In all forms (fossil or CN) , Methane provides the optimum solution for meeting current and future environmental targets at the lowest cost, and the transition is the smoothest it can be
- Adoption of any fuel other than Methane, will introduce a disruption and discontinuity in the shipping industry, will change drastically the way we build and operate ships and this will only make the effort to reach targets more difficult, while it is far from being guaranteed that other fuels can offer a sustainable path as LNG does
- Low and Zero Carbon shipping require investments for the production of a low cost fuel, and due commitment has to be demonstrated by policy makers and other stakeholders
Above article is an edited version of Mr. Trakakis presentation during the last GREEN4SEA Athens Forum.
You may view his video presenation herebelow
The views expressed in this article are solely those of the author and do not necessarily represent those of SAFETY4SEA and are for information sharing and discussion purposes only.
Antonis Trakakis, Technical Manager, Arista Shipping
Antonis Trakakis has graduated from Mechanical Engineering dept of NTUA and carried out graduate studies at von Karman Institute for Fluid Dynamics in the field of Turbomachinery. Currently he holds the position of Technical Manager at Arista Shipping where he joined in 2010. As Technical and Environmental Manager of Superfast Ferries he has successfully addressed all issues relevant to operation of ships in sensitive areas like the Baltic sea. Antonis has worked with all kinds of internal combustion engines, ranging from gas turbines, to all sizes of four stroke, and two stroke engines, and one of his special concerns has been the formation and control of emissions, and engine efficiency.