A new report from Lloyd’s Register (LR) has found that the total cost of ownership (TCO) for passenger ships retrofitted with methanol dual-fuel engines to be more than double the cost of blended fuel (Blend B30), heavy fuel oil (HFO) and HFO with Onboard Carbon Capture and Storage technologies (oCCS).
‘Fuel for thought: Methanol for Passenger Ships’ examined the TCO for operators over a 15-year period and based results on a calculation that 65% of voyage time would be spent in EU waters.
Overall findings identified in the report, based on analysis by the LR Business Advisory team, show the bunkering price of methanol to be the main commercial barrier for its adoption, with the use of less environmentally friendly fossil based (grey) methanol a more commercially attractive proposition for passenger shipowners than a blend of 50% grey, 25% bio- and 25% e-methanol, even when EU emissions taxes are taken into account.
However, the study highlights that methanol is a technically viable fuel for ship operators looking to reduce the carbon emissions of passenger ship newbuilds, owing to the similar characteristics of methanol to existing fuels. Viable retrofit paths have also been taken to the sector, such as the pioneer LR project for the Stena Germanica back in 2015. This technical viability is reflected in the global orderbook with passenger ships ranging from small inland vessels to the largest cruise ships awaiting delivery.
The report also outlines that greater investment is needed in green and bio-methanol production along with improved bunkering infrastructure to increase fuel availability and reduce costs to a commercially viable level.