As if we had not heard enough about future fuel options, up pops DNV GL with the second of what is to be an annual series of conferences looking at alternative fuels. To be honest, I wondered if there were enough new things to say to justify spending three hours last Thursday (15 October) attending this online event.
I was wrong: there is a lot still to say and I can barely scratch the surface in this 1,650-word summary of the nearly 25,000 words spoken that afternoon. To meet that impossible task, I have distilled out the more important remarks made on each of the fuels and technologies mentioned.
I will take them in alphabetical order – ammonia, batteries, fuel cells, hydrogen, LNG, LPG and methanol – because then I can start with ammonia, about which I have previously expressed concerns but which is attracting growing support, such as an approval in principle for a ULCC powered by the carbon-free fuel, which is its main attraction.
Øyvind Sekkesæter, an environmental consultant at DNV GL Maritime, told us that e-ammonia is well priced compared with e-methanol, if renewable electricity is available, because it is easier to extract nitrogen from the air than carbon. But his colleague and principal researcher Hendrik Brinks made a different comparison.
Most ammonia is made using LNG, he said, so new and green production plants will be needed to achieve significant CO2 benefits; its combustion is challenging; it is toxic and it costs about the same as VLSFO. “That means there are no OPEX benefits of switching from oil to ammonia but there is increased CAPEX … so, at the moment, there are no good reasons to switch to ammonia,” he concluded.
Batteries also have limited application, conference panellists agreed. Christos Chryssakis, business development manager at DNV GL Maritime, said that the class society’s data showed more than 250 vessels have batteries installed on them with another 200 on order. More than half of these are hybrid installations and a little less than a quarter each are plug-in hybrids and pure electric.
These ships are mostly small coastal vessels and mostly in Norway and Europe and that is likely to remain the case going forward, “but this is an exciting technology to follow,” he said.
It was a view shared by panelists in an end-users discussion during the conference, featuring Harry Robertson, technical director of Stena Teknik, Kostas Vlachos, COO of Latsco Marine Management, and Daniel Gent, energy and sustainability manager of UECC.
They were invited to reflect on a prediction by Tesla in May this year that the car maker would develop a ‘million mile’ battery. Could that spell the end of internal combustion engines (ICEs) in ships? Probably not.
Mr Gent does not anticipate a replacement for ICEs within the next 30 years, apart possibly in smaller ships, and Mr Vlachos raised a concern about the risk of fire when using batteries, suggesting that work would have to be done to develop suitable fire-supressing systems for large battery installations.
But Mr Robertson did not completely shut the door on batteries playing a larger role. He believes that ship designs will evolve towards electric propulsion motors “powered by batteries, fuel cells or ordinary gensets running on some kind of fossil-free fuels.” Although not mentioned during the conference, last year’s order by Oldendorff for two electric Azipod-powered bulk carriers may turn out to be the start of that trend.
Fuel cells received a mixed reception during the conference, even though they could be used alongside various alternative fuels – hydrogen, ammonia and LNG were all mentioned. But DNV GL’s latest Maritime Forecast to 2050, which I discussed last month, did not predict they would play a significant role and, speaking during last week’s conference, Mr Sekkesæter said that its analysis showed “a very limited uptake … mostly due to the high investment costs required.”
Hydrogen did not fare much better in its findings, Mr Sekkesæter indicated. “Liquefied hydrogen was [reviewed] … and we did not find a high uptake in the scenarios that we evaluated.” This was in part because of “the high investment cost of storage on board, meaning that most ships had a cheaper fuel and technology option” for complying with IMO’s CO2 target.
However, the study did not look at the effects of any subsidy schemes or at compressed hydrogen, “which may be a cost-efficient carbon-neutral fuel solution for some short sea segments,” he added.
Some operators clearly agree because Mr Chryssakis told the conference that DNV GL is “deeply involved” in some hydrogen ferry projects he said. “There are a lot of challenges with hydrogen,” because hydrogen fuel tanks are large and expensive and because the fuel cell and engine technology needed is “still improving”. In addition, the hydrogen must be produced from green sources, “otherwise it will not help us reduce our GHG emissions.”
Nonetheless, Shell LNG’s marine LNG business development team lead, Krishna Achuthanandam, is positive about hydrogen, although his interest extends beyond shipping to areas such as land transport, power generation and industry. Hydrogen is also is the raw material for other future fuels, such as ammonia and synthetic fields, he pointed out, so Shell is confident that it will be part of future energy solutions. “For this reason, we are focusing on hydrogen,” he said.
LNG for now; LPG for later
As far as LNG is concerned, DNV GL’s speakers reiterated the society’s view that LNG is the optimum transition fuel. As its maritime CEO Knut Ørbeck-Nilssen put it in an introductory message to conference attendees, “we mustn’t wait for the ideal fuel to arrive before taking action. Our research shows that installing a dual-fuel LNG engine is a robust choice for today … enabling a 20-25% reduction in tank-to-wake CO2 emissions.”
In his presentation, Mr Chryssakis moved the discussion forward, saying that DNV GL already has a lot of data on LNG, so it is now collecting more data on LPG, which is becoming “a fuel of interest”. Not surprisingly, this interest is being seen in the LPG carrier sector. “We recently had the first LPG carrier being retrofitted to run on LPG as fuel,” he said, with 11 more to follow, “and we have 24 orders for [LPG carrier] newbuildings” that will use cargo as fuel.
To use LPG in this way is not simply a matter of substituting ‘LPG’ for ‘LNG’ in the operating manuals. Latsco Shipping – which operates 18 product tankers and 11 gas carriers – has begun a project to use LPG as fuel but, as Mr Vlachos explained, “we have found a lot of obstacles in this decision.”
Shipbuilders, for example, cannot “give solutions to the various matters of safety that arise during construction” and class societies “don’t have rules to govern LPG as a fuel in an LPG carrier”, although “they may have rules for other types of vessels.” To compensate, Latsco is using the IGC code, although this provides only “a minimum of the requirements,” he said.
I have approached DNV GL for clarification of those remarks, bearing in mind Mr Chryssakis commenbts above and because the class society published class rules for LPG-fuelled vessels in July 2019.
There is also the cost. Latsco is developing an Aframax LPG-fuelled vessel but it estimates the cost could be $12M more than for a conventional vessel. “We have made some good progress to reduce the capital costs” Mr Vlachos said, “but we need the support of charterers” to change the commercial arrangements to be able to use part of the cargo as a fuel.
Methanol: quality, yes. But quantity?
And finally, methanol. The largest operator of methanol-fuelled vessels is Waterfront Shipping, a subsidiary of the methanol producer Methanex. Ayça Yalcin, director of market development for Methanex in the EMEA region, ran through its benefits – it is a clean burning low emission marine fuel that biodegrades rapidly in water; ships using it meet IMO’s SOx and particulate matter emissions regulations and, by blending in water, second generation vessels can meet Tier 3 NOx emission limits.
But is there enough of it for widespread marine use? Not at the moment and its deployment to ports worldwide has been delayed because of the COVID-related delays to IMO’s meeting schedule. It is also a widely used raw material for many industrial processes; “methanol is an essential ingredient of modern life,” Ms Yalcin said. “when you look around you, there’s very little that doesn’t have methanol in it.”
But its use as a fuel has been increasing and now accounts for about 50% of global methanol production, so I asked how quickly production could be ramped up if shipping’s demand for it became significant. “That’s the part I’m least concerned about; the methanol market always catches up with demand,” she replied. Production has increased from 58M tonnes in 2014 to 84M tonnes in 2019 and “we have a lot of … new capacity coming up,” she added.
She did not say how much of that production is green methanol, which she acknowledged is “more interesting for marine.” Mr Chryssakis echoed that point, saying that methanol is “one of the potentially very useful fuels towards 2050, as long as we can produce it as bio methanol or E methanol.”
For me, one of the most significant remarks was almost a throwaway comment by Mr Achuthanandam, of Shell. At the moment, “there are no commercially commercially-viable zero-emission fuels available,” he pointed out. But despite the need for such fuels to meet IMO’s ambitious targets, that does not put shipping at the front of the queue for them. “Considering the investments required and the other hurdles to overcome, our belief is that it is likely that the fuel that emerges as the ultimate solution for shipping will first be developed by other sectors and will then be adapted [for] the global shipping industry.”
At least we know where we stand.