• 2021 July 25 13:51

    Tackling the fuel conversion conundrum

    LNG solution could resolve headache for shipowners as they wrestle with retrofit options in face of environmental agenda to cut emissions

    The need to upgrade ships in line with new environmental rules represents a billion-dollar dilemma for the industry as it faces a range of commercial and technical risk factors that will determine whether retrofits for alternative fuels will be worth the investment.

    It is estimated that investments of as much as $182 billion will be required on ship machinery and onboard storage for ships to run on low-carbon fuels, both for retrofits and newbuilds, between 2030 and 2050 in order to halve greenhouse gas emissions from global shipping, according to a study by consultancy UMAS and the Energy Transitions Commission for the Getting to Zero Coalition.

    This is about 13% of estimated cumulative investments over the same period of up to $1.4 trillion, of which the remainder would be required for land-based infrastructure and production facilities for low-carbon fuels.

    Doing nothing is not a real option for shipowners, but it would also be foolhardy to throw money at the problem without knowledge of the most optimal alternative fuel that can secure their fleets for the long haul and ensure payback under a green shipping regime.

    A multitude of fuel options are now on the industry’s radar screen to replace more pollutive fossil fuels such as heavy fuel oil (HFO), very low-sulphur fuel oil (VLSFO) and marine gas oil (MGO) currently used by much of the global fleet.

    Among these are low-carbon liquefied natural gas (LNG), as well as carbon-neutral fuels including ammonia, methanol and hydrogen produced from sustainable sources such as biomass, to give biofuels, and renewable electricity, to give electrofuels.

    Price must be right

    These alternative fuels are all at different stages of maturity in terms of availability, cost and performance, with carbon-neutral fuels mostly still at a relatively early stage of development.

    These fuels also presently lack the regulatory framework, production capacity, acceptable safety protocols, and bunkering infrastructure for widespread adoption across deepsea shipping.

    In determining which fuel is most economically viable, shipowners must consider the fuel price and cost of implementing it onboard vessels through retrofits to adapt engine systems and provide onboard storage.

    In addition, the fuel must have sufficient energy content, or calorific value, to power a large vessel such as a VLCC. It must also be available and abundant, as well as technically feasible and safe for storage onboard.

    Planning for fuel flexibility will be a key consideration in upgrading the fleet to ensure it remains competitive as regulations tighten in future and carbon-neutral fuels become available, given an average vessel lifetime of around 20 years.

    Aside from other fossil fuels, LNG already satisfies these criteria given there are abundant natural gas reserves of around 7177 trillion cubic feet - more than 700 times the size of proven oil reserves. There is also an existing bunkering network for this fuel, which is presently available in at least 93 ports, while price-wise LNG can be cheaper than both VLSFO and HFO in certain periods and regions, according to a study by consultancy Ocean Dynamex.

    Reduced emissions

    LNG has a much lower emissions footprint than other fossil fuels as it emits zero SOx and negligible amounts of particulate matter and NOx, cutting emissions by between 20% and 30%.

    There has been concern over methane slip from gas-fuelled engines, whereby unburned methane gas can escape at the exhaust into the atmosphere, but this type of leakage has been drastically reduced with modern high-pressure engines.

    Gas is a much cleaner fuel with excellent combustion and no need for fuel heating, offering technical benefits such as no sludge and less wear-and-tear on engine parts, thereby cutting maintenance costs.

    Furthermore, LNG has sufficient energy content, or calorific value, to power vessels and is technically feasible to carry onboard ships, while LNG fuel systems can be easily adapted for carbon-neutral drop-in fuels such as bio-LNG and synthetic LNG to make this a sustainable solution also in the longer term.

    A DNV case study showed the use of a dual-fuel LNG engine on a Panamax bulk carrier was the most commercially robust solution compared with other alternative fuel technologies due to cost, reduced tank-to-wake emissions and flexibility in regard to future decarbonisation options.

    Transition fuel

    Consequently, DNV sees a significant part of the global fleet adopting LNG as fuel towards 2040, with carbon-neutral fuels gaining ground around mid-century.

    LNG is seen as an important transition fuel towards a net-zero future and such retrofits of existing vessels can be implemented with minimal modifications to the engine system and hull structure, according to Newport Shipping managing director Lianghui Xia.

    “LNG is presently the most expedient and practical solution for the industry to meet immediate emissions targets, as the perfect solution may not be available for some years,” he says.

    The UK-based ship repair and retrofitting group has now gained a key approval-in-principle from DNV for its unique low-cost LNG retrofit concept for VLCCs and Capesize bulkers as it targets this emerging market.

    But Xia believes collective action is also needed to facilitate the shift to LNG through measures such as tax incentives for such conversions, wider bunkering access, and lower production and delivery costs for the fuel from energy companies.

    “Apart from agreeing on the optimum fuel option, the speed of implementation of the environmental agenda will be governed by financial metrics,” he says.

2021 September 27

16:00 TransContainer launches regular multimodal service from Asia-Pacific Region to Europe via Russian Far East and Kaliningrad
14:48 DP World Stuttgart celebrates 25-year anniversary as business will invest €35m
14:33 Average spot market price for Russian M100 product rose to RUB 26,034 pmt as of September 24
14:12 Registration is underway for webinar on impressed-current protection against corrosion and corrosion monitoring of sea and harbor facilities
13:45 Gazprombank to finance creation of multifunctional cargo complex on Sakhalin
13:20 The Switch sweeps past milestone of 100 in-line PMM shaft generators sold
12:01 The fourth Russian supertrawler for the RFC was launched in St. Petersburg
11:26 Aqaba container Terminal invests in new customised machinery
10:56 DNV and Altera Infrastructure pilot new ABATE notation to reduce GHG emissions on offshore installations
09:54 MABUX: Upward evolution continues on Global Bunker Market on Sept 27
09:30 Crude oil prices continue rising
09:14 Baltic Dry Index as of September 24

2021 September 26

17:45 USCG, Japanese navy conduct exercise near Dutch Harbor
14:51 Hidden Gem’ arrives in Rotterdam to be transformed into nodule collection vessel for The Metals Company
13:21 LR projects win funding to accelerate research into maritime decarbonisation
12:28 ESVAGT takes delivery of third newbuilt SOV vessel
11:07 ABS Awards AIP to Ned Project’s wind turbine installation vessel design

2021 September 25

15:03 Rolls-Royce and Sanlorenzo add new dimension to partnership with mtu engines and integrated bridge solutions
13:27 JAX LNG and TOTE complete first renewable LNG bunkering in the United States
12:41 Babcock cuts steel for Royal Navy’s Type 31 frigate HMS VENTURER at Rosyth
11:37 Höegh LNG Partners LP announces a new long-term FSRU contract for the Höegh Gallant
10:52 MYCRANE set to launch in four more countries as franchisees are appointed

2021 September 24

18:16 ABS and HHI design optimized LNG carriers
17:59 Admiralteyskie Verfi shipyard launches the Kapitan Martynov freezer trawler
17:55 Italian terminal operator orders two Konecranes Gottwald Mobile Harbor Cranes
16:12 Three Finnish icebreakers return to service after being repaired at Turku Repair Yard
15:03 Maersk invests in electrofuels startup company
14:40 International conference “Inland waterways: strategic potential for growth” focused on INFUTURE project was held on September 20
14:13 Dredge spoil disposal system planned for fairway deepening project
13:57 LAS Vice Admiral Kulakov went to the Atlantic
13:33 Wärtsilä ensures optimal performance and minimal carbon footprint for world’s most environmentally friendly ferry
13:09 Wan Hai Lines holds online ship naming ceremony for new vessels
12:38 Sredne-Nevsky Shipyard launched unmanned research ship Pioner-M
12:10 Record mid-year cargo volumes through the Port of Vancouver in 2021
11:46 SCF Group wins sci-tech award for development in Arctic exploration
11:02 Rolls-Royce and Overmarine continue cooperation with future-oriented mtu technologies
10:07 Tallink Grupp secures another short-term charter deal for vessel Silja Europa
09:59 MPA, SSA and GCNS sign MoU to raise carbon accounting capabilities amongst maritime companies in Singapore
09:41 MABUX: Global Bunker Market may continue firm upward trend on Sept 24
09:24 Crude oil prices continue increasing
09:09 Baltic Dry Index as of September 23

2021 September 23

18:05 Maersk calls Jafza home for its first Warehousing & Distribution facility in the UAE
17:25 GTT and Deltamarin receive AiP from American Bureau of Shipping for their new design applied for LNG fueled tanker
17:05 LR grows fleet optimisation offering with GreenSteam acquisition
16:25 The Port of Rotterdam Authority helps German DeltaPort to be a regional hydrogen hub
16:15 Panama Canal joins to the Call to Action for Shipping Decarbonization
15:39 Dry cargo vessel of RSD59 design, Alexander Ivanov, leaves for sea trials
15:21 ABS grants AIP for next generation liquified CO2 carrier JDP designs
15:05 Synergy Group to take over Maersk Tankers’ technical management business
14:37 DNV and LISCR award AiP to HHI for 40,000 CBM liquefied CO2 carrier design
14:17 Kaliningrad region and FESCO to cooperate in the field of logistics
13:48 Damen can build icebreaking ships for Russia’s Arctic projects within short timeframes
13:25 Sweden’s largest port solar cell system inaugurated at Stockholm Norvik Port
13:15 MABUX: Bunker Weekly Outlook, Week 38, 2021
12:56 Keel-laying of Damen tug series for Atomflot held in Saint-Petersburg
12:51 MSC invests in new efficiency solution to reduce emissions from fleet
11:00 13th Annual Capital Link Shipping & Marine Services Forum took place with great success on September 13, 2021
11:00 Rolls-Royce and Sea Machines sign partnership to cooperate on smart ship and autonomous ship control solutions
10:34 APM Terminals partners with Siemens for energy optimisation and emission reduction at terminals
09:58 Torqeedo and Fassmer Shipyard announce the CIT-E Ferry - a passenger ferry for public transport