ICCT published a report, focusing on ships trading with the European Union, predicts a tripling of demand for LNG as marine fuel between 2019 and 2030, based on trends in fuel consumption.
The report estimated the 2030 demand for LNG used by ships on voyages to, from, and between EU ports, compared it to the potential supply of renewable LNG, and estimated the life-cycle (well-to-wake) GHG emissions of using various proportions of renewable LNG.
It projects that demand for LNG will triple between 2019 and 2030. The supply of renewable LNG is a function of the price users are willing to pay, and it is estimated that renewable LNG is likely to be at least seven times more expensive than fossil LNG in 2030. Therefore, policy support would be needed to create an incentive for its use.
ICCT also modeled three policy scenarios whereby the European Union offers a subsidy to use renewable LNG. Each scenario resulted in a different mix of fossil and renewable LNG and therefore different well-to-wake CO2e emissions. Offering no subsidy meant that 2030 LNG demand would be met using 100% fossil LNG, and with a €25/ GJ subsidy, only 4% of LNG demand could be met with renewable LNG.
Only LNG made using inexpensive landfill gas would be cost-competitive with fossil LNG and, unfortunately, this feedstock is in limited supply. Doubling the subsidy to €50/GJ (€2,400/t LNG) would enable the use of 100% renewable LNG because it would create price parity between more expensive bioLNG fuels made from agricultural residues as well as e-LNG. However, this level of price support would require annual public expenditures of €17.8 billion in 2030.
Using 100% renewable LNG would reduce 2030 WTW CO2e emissions from LNG-fueled ships by 79% on a GWP100 basis, and 65% on a GWP 20 basis, compared to using 100% fossil LNG in 2030.
Compared to 2019, 2030 WTW CO2e emissions using renewable LNG are 38% lower on a GWP100 basis but 6% higher on a GWP20 basis, given growth in the LNG-fueled fleet.
EU law requires reducing economy-wide GHG emissions at least 55% below 1990 levels by 2030, which would require a 41% reduction in GHG emissions from a 2019 baseline.
This underscores the importance of evaluating CO2e emissions using both GWP100 and GWP20, especially when near-term climate impacts are important to policymakers, and especially for fuels consisting of short-lived climate pollutants such as methane.
Because of upstream methane leakage and downstream methane slip, even when using 100% renewable LNG, absolute methane emissions from LNG-fueled ships would double from 2019 to 2030.
The only way that using renewable LNG could be compatible with the spirit of the reductions called for in the Global Methane Pledge would be to reduce total 2030 methane emissions from LNG-fueled ships by at least 65%.
Doing this would require using the best-in-class engine technology (HPDF) and reducing upstream methane leakage by at least 30%. These reductions would need to deepen each year to counteract growing demand for LNG.
We also found that the FuelEU Maritime proposal could help shift ships to renewable LNG, but only by 2050 when ships must emit at least 75% less WTW CO2e100 than a 2020 baseline. We identified ways that FuelEU Maritime could be improved, including regulating based on CO2e20 and setting a minimum GHG reduction threshold for all fuel pathways
Other fuels could offer low life-cycle emissions without the methane problem. Synthetic diesel and green methanol have similar production costs and technical constraints as producing renewable LNG, but these liquid fuels are easier to store onboard than LNG and could be supplied via existing distribution networks.
Synthetic diesel can be used in conventional marine engines or dual fuel engines without modification, including those on existing LNG-fueled ships, and methanol can be used in new or modified dual fuel engines.
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