Funding and technology dominate gas fuel discussion

Paul Gunton
Paul Gunton
ShipInsight

26 February 2019


Achieving zero-emissions from future fuels will require financial incentives and novel technologies, according to panellists and delegates at the ShipInsight conference earlier this month.

Called ‘An uncertain future’, the conference was designed to allow attendees to control the direction for discussion and a session that was due to consider which gas would emerge as the fuel of the future was steered towards debate about how shipowners might be incentivised to plan for their long-term fuel choices and how those fuels might be produced.

Shipinsight_conf

But first, conference participants heard from Hayato Suga, director of ClassNK’s Plan Approval and Technical Solution Division. He saw the transition from coal in the 19th century to renewable energy sources in the future as a continuous journey that has so far reached natural gas as an interim fuel, with gasses such as LPG, ethane, methane and hydrogen to follow. Beyond that, he predicted a future in which sources such as solar, wind, wave and geothermal energy, along with biomass, could supply renewable energy.

In discussion, he was asked to comment about how the carbon content of most of the gasses he had mentioned will fit into a low-carbon future, but he argued that hydrocarbons could have a long-term role to play: carbon capture and storage technologies are already being suggested for installation on board ships, he said. As for hydrogen, he warned that it will only be an environment-friendly option if its production method does not create CO2.

Panos Koutsourakis, global technology leader at class society Bureau Veritas, reminded delegates that it has been IMO regulations that have driven the move towards more environmental shipping: first NOx, then SOx and now carbon emissions have come under its scrutiny. But addressing each new requirement has required a more complex approach, he suggested. Dealing with NOx, for example, required engine design changes and was phased in over a long period, making it relatively simple to address.

“Now, the industry is changing,” he said, with environmental requirements emerging from IMO in greater numbers and with more demanding goal-based requirements. To meets its 2050 carbon goal, for example, “we need to think out of the box,” he said, “to transform our industry one more time.”

That transformation will require more than new fuels, he said. There must also be a focus on new technologies that will help meet IMO’s emissions targets, coupled with financial incentives for owners to invest. Otherwise, he wondered, “how are we going to afford the new technology?”

Another panellist who considered the financial implications of a low-carbon future was Sophie Parker, principal consultant at the University Maritime Advisory Services (UMAS). That organisation combines research with the UCL Energy Institute and consultancy work for the shipping industry and policy makers. She described some work in which the ‘carbon intensity’ of a ship can be calculated and plotted onto a graph showing how it compares with the predicted trend of how the carbon intensity of ships of the same type will fall as IMO’s 2050 deadline approaches. This gives an indication of when action must be taken for a particular ship to match that aspiration.

As to what action to take, various options exist, she indicated. For example, if an owner is operating with LNG, will it convert the ship to use an alternative fuel, such as bio LNG or e-methane or possibly hydrogen? she asked. Or “do you buy a ship with space and flexibility to ensure compatibility with fuels that need more space on board?” Whatever solution is chosen it will have a cost and UMAS is exploring how best to incentivise this work, perhaps through a carbon tax.

In discussion, both she and Mr Koutsourakis were asked whether financial engineering would be as important as technical engineering in planning a strategy for future fuels. Mr Koutsourakis was certain that it would be and named some countries where tax incentives are available for such spending. Ms Parker said that regulation and carbon pricing were needed to encourage investment. It is not certain how costs will evolve, she said, and the technology needed for a zero-carbon future “isn’t viable at the moment”.

One technical topic the delegates focused on was whether production capacity for suitable future fuels could be scaled up to provide sufficient quantities. Claudia Beumer, sales manager for processing solutions at Wärtsilä Marine, was confident that it could be. Speaking from the floor, she said it was “just a matter of increasing demand. No one will build a biogas or liquefying production plant if there’s no demand.”

So if the industry “starts to ask for biogas, production capacity will go up,” she said, revealing that Wärtsilä is considering investing in suitable technology; “we won’t get to zero emissions [overnight] so we have to take it step by step,” she said.

Conference chairman Paul Gunton asked MAN Energy Solutions mechanical engineer René Laursen whether the company had similar plans. Also speaking from the floor, he said he did not know of any corresponding investments but said that the group supports cooperation with other companies on a range of projects so if it were approached with a proposal to support a project to produce carbon-free fuel, it might consider backing it.