Shipowners need better information on which alternative fuels represent practical choices and fully account for lifecycle emissions, writes Matthias Ólafsson, The Methanol Institute
The maritime industry is at the start of a transition to an era of lower carbon operations, a process that will require the sourcing of new fuels and development of new technologies. Among the challenges facing shipowners is knowing which lower carbon fuel suits their operations now and in the future.
The bigger challenge for the industry at large is how the total carbon intensity of all alternative fuels is measured. Understanding this is key to a sustainable long term strategy that enables vessel operators to fully assess the impact of their choices in terms of the fuel’s carbon impact across its lifecycle.
The International Maritime Organization (IMO) has traditionally applied a process of measuring GHG emissions from international shipping on a tank-to-wake basis, meaning solely the emissions derived from on-board fuel combustion.
The organisation looks set to update this approach, following the recent intersessional working group which decided to develop lifecycle GHG emissions guidelines for marine fuels. If formalised and adopted, these guidelines would provide a baseline to be further developed and ultimately be formulated into regulation that would transform shipping’s decarbonization process.
Tank-to-wake drawbacks
The clear limitation of the tank-to-wake approach is that all emissions associated with fuel extraction, production, processing, transport, purification, or liquefaction, refining, transporting and bunkering are left out of the equation. Emissions from upstream processes – before the fuel gets to the ship – in case of the top contenders for the title of maritime fuel of the future, including hydrogen, ammonia, and methanol, often represent a significant share of overall emissions determined on a well-to-wake basis.
Furthermore, fuels produced using electricity derived from fossil sources are deemed carbon neutral, despite requiring the continued extraction of new fossil uptake for their production. Persisting with a tank-to-wake approach is likely to stimulate the uptake of fuels such as hydrogen and ammonia which have zero operational emissions simply because there is no carbon in the final product molecule, but are produced using pathways with significant upstream emissions, creating a false impression of GHG reduction in maritime transport.
The alternative, more comprehensive approach, is the well-to-wake method of measuring maritime emissions. By considering emissions related to the full production cycle of fuels, policymakers can have a more complete picture of the environmental profile of marine fuels and in doing so determine a path to true, net carbon neutrality.
Uptake of low carbon and net carbon neutral fuels can only occur in a market environment where upstream emissions are factored into a well-to-wake analysis which is also incorporated into carbon credits, energy policy, and suitable incentives to encourage ship owners to make a switch. In fact, the scope of IMO regulation clearly affects fuel uptake from production to distribution. By placing the sole emphasis of instruments aimed at GHG reduction on emissions from combustion, only the propulsion of fuels with low operational emissions – often labelled ’zero-propulsion’ – is rewarded.
Making progress
It is not yet widely recognized that such fuels, when produced from natural gas, may well consist of higher carbon intensity than fossil alternatives, due to upstream inputs. Thus, maritime regulations could perversely serve not to decarbonize maritime transport, but to shift emissions to other industrial sectors. A key benefit of the well-to-wake approach is that it incentivizes vessel owners and operators to begin using existing fuel alternatives such as methanol, already confirmed by the IMO to deliver immediate climate benefits in the form of reduced SOx, NOx, PM and carbon intensity, in the period leading up to the IMO’s first major emissions reduction date of 2030.
The industry may adopt existing alternative fuels gradually or partially into their value chains, enabling vessel operators to optimize procurement to reflect sustainability requirements. For methanol, the molecule – CH3OH – is the same whether produced conventionally from natural gas, as bio-methanol from biogas or biomass gasification, or e-methanol from green hydrogen plus C02, so that the transition to low carbon and net carbon neutral fuels can grow from bunker to bunker.
Once supply of carbon neutral feedstock is more developed, vessel owners could adopt a full share of carbon neutral fuel. This would serve as a more realistic and economically viable approach to decarbonization, compared to the proposals for retrofitting many vessels to use fuels which currently either do not yet exist, are not economically viable, or both. And, again, in the case of methanol, the technology is here today for newbuilds and vessel retrofits allowing ship owners to act now.
The approach for calculating well-to-wake emissions based on fuel consumption is well established, as LCA is frequently applied across different sectors to assess the environmental impact associated with all stages of commercial products, processes, or services. In fact, the EU Directive 2018/2001 already has in place an LCA-based GHG emission saving criteria and a GHG methodology for bio-based renewable fuels. A similar threshold exists for synthetic e-fuels.
No time to wait
With IMO’s 40% CO2 reduction target of 2030 fast approaching, shipping doesn’t have the luxury of waiting for as yet unavailable fuel technologies to reach technical readiness, regulatory approval, and availability when clean fuels are already available now in existing vessels as well as newbuilds, are readily traded on digital fuel platforms, and are available in low carbon formats.
The increased integration of low carbon and net carbon neutral fuels at an accelerated rate is fundamental to attain the targets laid out by the IMO. To effectively stimulate the uptake of fuels that will drive the maritime industry’s energy transition, policymakers must employ mechanisms that account for the GHG emissions of the fuel’s entire lifecycle. The arguments laid out by the Methanol Institute call for application a well-to-wake approach in GHG accounting of maritime transport on the basis of four key implications:
First, the imminent threat of climate change and the associated fast-approaching targets require a mechanism that supports the uptake of sustainable fuels without delay. Second, policy should present investment signals to foster innovation and renewable power generation at scale to address the reduction of GHG emissions based on the entire environmental profile of fuels to avoid incentivizing the large-scale reallocation of GHG emissions to upstream fuel production processes.
Third, the burden of decarbonization should belong to the entire maritime sector. Finally, not only should policy present investment signals, it should also incorporate incentives. It is not sufficient that the IMO includes Well-to-Tank emissions only for information purposes and continue to regulate Tank-To-Wake in isolation. The IMO needs to ensure that carbon emissions in the Carbon Intensity Indicator (CII) are reported on a Well-to-Wake basis.
CLICK HERE TO READ THE FULL POLICY PAPER BY MI ON MEASURING WELL TO WAKE EMISSIONS
The views presented hereabove are only those of the author and do not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
