A new study commissioned by SEA-LNG has found that liquified bio-methane (bio-LNG) can make a major contribution to maritime decarbonisation, and will be among the cheapest sustainable alternative marine fuels.
According to the report, Bio-LNG is a robust alternative fuel solution for the decarbonisation of the shipping sector thanks to:
- Significant global supply potential as a marine fuel;
- Competitive cost compared to other sustainable biofuels and electrofuels;
- Mature and commercially available technologies for fuel production and use on-board ships;
- Existing and developing infrastructure for transport and bunkering.
onducted by the Maritime Energy and Sustainable Development Centre of Excellence (MESD CoE) at Nanyang Technological University, Singapore (NTU Singapore), the study explored questions around fuel availability, cost, lifecycle emissions and logistics, providing an overview of the applicability of bio-LNG as marine fuel. It also investigated the feasibility of LNG and bio-LNG as a realistic pathway for the shipping industry to achieve greenhouse gas emission reduction targets in a sustainable manner.
The findings suggest that pure bio-LNG could cover up to 3% of the total energy demand for shipping fuels in 2030 and 13% in 2050. If it is considered as a drop-in fuel blended with fossil LNG, bio-LNG could cover up to 16% and 63% of the total energy demand in 2030 and 2050, respectively, assuming a 20% blending ratio. In the long term, shipowners who have invested in the LNG pathway will need to shift to renewable synthetic LNG (e-LNG).
This latest study from the Maritime Energy and Sustainable Development Centre of Excellence at Nanyang Technological University, Singapore, confirms that bio-LNG is a solution for the decarbonisation of the shipping sector thanks to the mature and commercially available technologies for fuel production and use on-board, existing delivery infrastructure plus the competitive cost compared to other sustainable biofuels and electro-fuels
Peter Keller, Chairman, SEA-LNG said.
More specifically, the report found the following:
#1 Bio-LNG can make a major contribution to maritime decarbonisation
- Liquefied biomethane, or bio-LNG, produced from sustainable biomass resources has the potential to meet a significant proportion of future shipping energy demand, even when taking into account growing demand for biomass from other sectors such as wood and paper production, industrial feedstocks, heat and, power generation, aviation and heavy-duty road transportation.
- Bio-LNG has the potential to meet up to 3% of the total energy demand for shipping fuels in 2030 and up to 13% in 2050.
- If it is considered as a drop-in fuel, blended with fossil LNG, bio-LNG could cover up to 16% and 63% of the total energy demand in 2030 and 2050, respectively, assuming a 20% blending ratio.
- Consequently, bio-LNG has the potential to be a viable drop-in biofuel that can be blended with fossil LNG to comply with IMO decarbonisation targets for 2030 and 2050.
#2 Bio-LNG is among the cheapest sustainable alternative marine fuels by 2050
- The average cost for delivered bio-LNG is around 30 $/GJ today and is forecast to decline by 30% to approximately 20 $/GJ by 2050 driven mainly by the reduced cost of producing biomethane in largescale anaerobic digestion plants.
- Biomethane production accounts for around 70% of the overall cost of bio-LNG to shipowners, liquefaction and transport accountable for another 20%, while bunkering and port fees add up to the final 10%.
- Bio-LNG is among the most cost-effective alternative marine fuels, cheaper than biomethanol and electrofuels, including e-ammonia and e-methanol.
#3 Bio-LNG reduces GHG emissions by up to 80% compared to marine diesel
- In general bio-LNG can reduce GHG emissions by up to 80% compared to marine diesel if methane leakage in the production process and on-board methane slip are minimised.
- In the specific case of bio-LNG produced from anaerobic digestion of manure, if avoided emissions are considered, then bio-LNG can achieve negative emissions ranging from ranging from minus 121% to 188% compared with marine diesel.
#4 Bio-LNG benefits from existing LNG infrastructure, reducing logistics costs
- The use of fossil LNG as a marine fuel is an established, mature technology, with many LNG-fueled ships in operation.
- Bio-LNG can be used as drop-in fuel in existing LNG-fueled engines and can also be transported, stored and bunkered in ports using the existing LNG infrastructure.
- The lowest costs are achieved when biomethane is injected into the gas grid and virtually transported to liquefaction plants and LNG terminals using the existing infrastructure and Green Gas Certificates or Biomethane Guarantees of Origin for trading.
#5 Bio-LNG and e-LNG are among the most viable options to decarbonise shipping
- Bio-LNG is competitive in terms of costs and GHG emissions savings when compared to other potential alternatives such as biomethanol and electrofuels like e-ammonia, e-methanol and e-LNG.
- Bio-LNG from anaerobic digestion of waste biomass represents an attractive choice for shipowners.
- As e-LNG appears to have similar cost and emission performance to other electrofuels it could gradually replace bio-LNG in the long term as the demand for alternative low carbon fuels grows and the price of hydrogen decreases.
#6 The adoption of bio-LNG in shipping will be linked to the widespread use of biomethane across other sectors
The large-scale development and usage of biomethane and bio-LNG for the shipping industry and other sectors will require regulation in two key areas:
- First, national and international standards for biomethane injection into gas grids.
- Second, a commonly accepted, and preferably legally binding, certificate of origin scheme to facilitate efficient trading in biomethane in its gaseous and liquefied forms and reduce transportation costs.