SEA-LNG shared its overview of LNG as a marine fuel in 2022-2024, highlighting that during 2023 attitudes towards decarbonisation shifted from theoretical discussions about what might work tomorrow to what works today and how much does it cost.
At the IMO in July, the Marine Environment Protection Committee (MEPC 80) adopted a revised GHG Strategy which aims to significantly curb GHG (greenhouse gas) emissions from international shipping. The new targets include a 20% reduction in emissions by 2030, a 70% reduction by 2040 (compared to 2008 levels), and the ultimate goal of achieving net-zero emissions by 2050. It aligns shipping with the Paris Accords and keeps the 1.5C target alive. Last month at COP 28, five shipping CEOs joined forces to accelerate the decarbonisation of the global maritime transport. They called for an end date for fossil-only powered newbuilds and urged the International Maritime Organization (IMO), the global regulator, to create the regulatory conditions to accelerate the transition to green fuels.
Their joint declaration called for the establishment of four regulatory ‘cornerstones’:
- An end date for new building of fossil fuel-only vessels and a clear GHG Intensity Standard timeline to inspire investment confidence, both for new ships and the fuel supply infrastructure needed to accelerate the energy transition.
- An effective GHG pricing mechanism to make green fuel competitive with black fuel during the transition phase when both are used.
- A vessel pooling option for GHG regulatory compliance where the performance of a group of vessels could count instead of only that of individual ships, ensuring investments are made where they achieve the greatest GHG reduction and thereby accelerating decarbonisation across the global fleet.
- A Well-to-Wake or lifecycle GHG regulatory basis to align investment decisions with climate interests and mitigate the risk of stranded assets.
Shipping is at the forefront of technological innovation when it comes to decarbonisation and at MSC our fleet renewal strategy includes 100 dual fuel vessels.
..Soren Toft, Chief Executive Officer, MSC Mediterranean Shipping Company said.
According to the report, LNG remains the leader when it comes to the alternatively fuelled newbuild orderbook. At the moment the only other alternative fuel for which there are significant numbers of commercial orders is methanol. LNG orders remained strong in the first quarter of 2023.
We saw a surge in dual-fuel methanol orders in the container sector in the middle of the year with LNG numbers picking up strongly again in the final quarter. Of particular note was CMA-CGM’s decision in November to switch its order for eight methanol dual-fuelled, 9,200-teu box ships to LNG dual-fuelled.
..the report noted.
According to DNV, as of December 2023, there are 469 LNG-fuelled ships – excluding LNG carriers – in operation, with a further 537 on order. DNV predicts that by the end of 2027, over 1,000 LNG fuelled ships will be carrying goods around the world with reduced emissions. This compares to only 36 LNG-fuelled vessels in operation a decade ago.
Green fuel supply
The need to use truly green fuels to improve current GHG emissions brings us to the question of availability. For ammonia and hydrogen, which face major technology and safety hurdles, the answer to this question can be postponed for a decade or more as there are few newbuild orders. It will take at least that long to develop safe and sustainable supplies. For methanol, this is a more immediate issue. Methanol demand from shipping for vessels currently operating and on order will amount to almost 14 Mtpa (million tonnes per annum) by 2028.
To reduce GHG emissions, this existing methanol fleet will need to use green methanol, however global green methanol production (almost all bio-methanol) is currently just 0.75 Mtpa;. This represents only about 6% of the energy consumption of the methanol-fuelled vessels in operation and on order. The Methanol Institute estimates a potential green methanol production of about 8 Mtpa by 2028. The question is: how much of this fuel will make its way to shipping when it is also needed by the chemicals industry who use existing grey methanol supplies where there are no obvious substitutes? The chemicals Industry also has ambitious decarbonisation goals.
Future marine fuels
