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Page 1: Maritime Energy & Sustainable Development (MESD) Centre of ...coe.ntu.edu.sg/MESD_CoE/Research/project_showcase/... · 2 In this study, bio-LNG refers to Liquefied Bio-methane (LBM)

Maritime Energy & Sustainable Development (MESD)Centre of Excellence

Supported by

Page 2: Maritime Energy & Sustainable Development (MESD) Centre of ...coe.ntu.edu.sg/MESD_CoE/Research/project_showcase/... · 2 In this study, bio-LNG refers to Liquefied Bio-methane (LBM)

Alternative Fuels for International Shipping

This study is made by the Maritime Energy & Sustainable Development (MESD) Centre of Excellence and has received research funding from the Singapore Maritime Institute (SMI).

Launched in October 2017, Maritime Energy & Sustainable Development (MESD) Centre of Excellence is jointly funded by Singapore Maritime Institute (SMI) and Nanyang Technological University (NTU). As the first maritime research centre supported by SMI, MESD is a continual effort to deepen Singapore’s maritime R&D capability and Maritime Singapore’s position as a global maritime knowledge and innovation hub to support Singapore’s strategic maritime needs. With the focus on future port and shipping applications, MESD CoE aims to develop innovative and sustainable solutions by working closely with all the key stakeholders within the maritime cluster.

Principal Investigator:Associate Professor Lam Siu Lee Jasmine

Author:Dr Prapisala Thepsithar

Contributor:Mr Koh Eng KiongMr Bruno Piga Mr Xiao ZengqiDr Sze Jia YinDr Liu MingMs Peng LiMs Gou XueniMr Milla Kevin Philippe Rosario

External Advisor:Dr Zabi Bazari, Energy and Emissions Solutions (UK) LtdDr Sanjay Kuttan, Singapore Maritime Institute Ms Haniza Bte Mustaffa, Singapore Shipping Association (SSA)Captain Mike Meade, SSA CouncillorMr Alex Brabin, M3 Marine Expertise Pte Ltd Mr Datharam Gambhira Puttheguthu, SSA Technical Committee memberDr Khorshed Alam, the Viswa Group of Companies

With inputs from Maritime and Port Authority of Singapore

Published in 2020

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© Nanyang Technological University, 2020This report and its contents are protected by copyright and other intellectual property rights. The copyright of the contents and materials, except for any third party information available in this report, is owned by the University. No parts of this publication may be reproduced or distributed in any form or by any means or stored in any retrieval system of any nature, without prior written consent of Nanyang Technological University.

The information provided in the report is for general informational purposes only. We have made every attempt to ensure the accuracy and reliability of information provided in this report. However, the information is provided “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained in the report.

List of Abbreviations

AD Anaerobic DigestionAFC Alkaline Fuel CellBAU Business As UsualCCS Carbon Capture and StorageCFPP Cold Filter Plugging PointCP Cloud PointDMFC Direct Methanol Fuel CellDWT Deadweight TonnageECA Emission Control AreaEEDI Energy Efficiency Design IndexEJ ExajouleFAME Fatty Acid Methyl Ester (Also referred to as Biodiesel)FC Fuel CellFFA Free Fatty AcidsGHG Greenhouse GasGT Gross TonnageHFO Heavy Fuel OilHVO Hydrotreated Vegetable OilICE Internal Combustion EngineICAO International Civil Aviation OrganisationIFO Intermediate Fuel OilIMO International Maritime OrganisationL LitresLCA Life Cycle AssessmentLOHCs Liquid Organic Hydrogen CarriersLNG Liquefied Natural GasLPG Liquefied Petroleum GasLSFO/ ULSFO Low Sulphur Fuel Oil/ Ultra Low Sulphur Fuel OilLTPEM FC Low Temperature Proton Exchange Membrane Fuel CellMBM Market-based MechanismsMCFC Molten Carbonate Fuel CellMCR Maximum Continuous RatingMDO Marine Diesel OilMeOH MethanolMEPC Marine Environment Protection CommitteeMGO Marine Gas Oil MJ MegajouleN2O Nitrous OxidePAFC Phosphoric Acid Fuel CellPP Pour PointRCP Representative Concentration PathwaySOFC Solid Oxide Fuel CellSSP Shared Socioeconomic PathwayT&O Technical and Operational MeasuresTHC Total Hydrocarbon ContentTRL Technology Readiness LevelUNFCCC United Nations Framework Convention on Climate ChangeUSEPA United States Environmental Protection Agency

Content

List of Abbreviations 2

Executive Summary 3

1. Introduction 5

2. Global Energy Transition and Shipping Sector 9

3. Potential Alternative Fuels for Shipping Industry 13

4. Characteristics of Alternative Fuels – Comparisons 33

5. GHG Emissions by Alternative Fuels 35

6. Technologies and Alternative Fuel Cost 39

7. Potential Pathway of Alternative Fuels Adoption 42

8. Adequacy of Alternative Fuels for Shipping Sector 45

9. Will Alternative Fuels be Ready for Shipping Sector to Meet GHG Target in 2050? 47

References 51

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Shipping enables the movement of large quantities of cargo in the most fuel-efficient way with lower cost in comparison with other modes of cargo transportation. Throughout the past few centuries, the shipping industry has witnessed changes in primary energy sources led by a continual stream of technological innovation. With a series of modernisation of the diesel engine, heavy fuel oil (HFO) has become a predominant fuel for the shipping industry since 1970 due to its several advantages. However, there is a concern over the sustainability of the current practice using fossil fuels. Under business-as-usual, the emission of greenhouse gases (GHG), especially CO2, is anticipated to increase by 50% to 250% in 2050. With calls especially to make them aligned with Paris Agreement, MEPC 72 adopted the “Initial IMO Strategy on Reduction of GHG Emissions from Ships” in 2018 to reduce the total annual GHG emission by at least 50% by 2050 relative to the GHG level in 2008. The radical reduction in CO2 emissions to meet IMO’s target in 2050 cannot be achieved without the adoption of alternative fuels. For shipping sector, there are several potential alternative fuels. The assessment of individual type of alternative fuels on whether it can genuinely support shipping industry must consider not only its application onboard ships but also the whole value chain, including its supply with competing use in other sectors, its logistics and readiness levels of technologies involved. In this study, the state of the art of alternative fuels throughout their value chain has been reviewed in order to address existing technological barriers and to identify realistic timeframe to facilitate GHG emission reduction for shipping industry.

The study categorises the alternative fuels into three major groups, i.e. fossil-based (containing less carbon1), biomass-based (containing biogenic

carbon) and non-bio renewable energy-based (mainly electricity and resulting hydrogen). In comparison with conventional fuels, the assessment mainly focuses on fossil-based LNG, bio-LNG2, fossil-based methanol, bio-methanol, biodiesel, fossil-based hydrogen and non-bio renewable energy-based hydrogen3. Within the scope of this study, the main findings reveal that none of alternative fuels today possesses performances comparable with those of conventional fuels, except environmental performance. However, the industry will not be able to meet IMO’s target in 2050 by using fossil fuels (i.e. conventional fuel oils and fossil-based LNG) solely without relying on spending the revenues from market-based mechanisms (e.g. bunker levy) for out-sector offset. In other words, the adoption of either biofuels or renewable H2 is unavoidable. For short- and medium-term from now to 2030, fossil-based LNG and biodiesel from the 1st and the 2nd generation feedstocks are foreseen to be potential measures contributing around 5-20% to onboard GHG emission reduction. Biodiesel can be blended with marine distillate and it is applicable with existing ships and bunkering infrastructure with minor modifications. Between these energy sources, LNG could play a significant role due to its adequacy (i.e. reliable supply) to support the shipping industry. For long-term, especially for the sector to meet IMO GHG emission reduction target in 2050, bio-LNG as a drop-in fuel with fossil-based LNG, bio-methanol, biodiesel from the 3rd generation feedstocks, and hydrogen from non-bio renewable energy are anticipated to be potential measures to contribute to a significant GHG emission reduction.

Although biodiesel is the readiest alternative fuel for actual application in the shipping industry, biodiesel produced from the 1st and the 2nd

Executive Summary

generation feedstock (i.e. edible vegetable oils and inedible oils) will not be sufficient to support the shipping industry to achieve 2050’s target, especially when considering from life cycle perspective. Fossil-based LNG as a clean fuel is recommended to be used in conjunction with bio-LNG to reduce the GHG emission further. The application of bio-LNG can leverage the mature technology of LNG with the establishment of LNG infrastructure and LNG-propulsion ships. Although hydrogen is the cleanest fuel providing zero-emission onboard ships, hydrogen produced from fossil fuels without carbon capture technology is not the sustainable approach due to its minimal GHG emission reduction from a life cycle perspective. Instead, hydrogen produced from renewable energy is recommended as an ideal option. However, the technology necessary for hydrogen application onboard ships is not mature. The potential of NH3 as a form of hydrogen storage for the onboard application should be explored for the shipping industry. In addition, methanol has potential to be used as a form of hydrogen storage for the onboard application. However, fossil-based methanol does not facilitate overall GHG emission reduction from a life cycle perspective. Instead, the shipping industry should consider the application of bio-methanol produced from sustainable feedstocks. To enable the availability of alternative fuels at ports, the establishment of bunkering infrastructure is of importance. The alternative fuel’s characteristics, such as physical state, boiling point, flashpoint and storage condition determines the requirement of storage facility at terminals and bunkering ships and ultimately costs. Prior to the adoption of alternative fuels, the emission factors, especially of biofuels and of fuels derived from non-bio renewable energy, will need to be discussed to reach an agreement to include GHG emission from a life cycle perspective. Harmonisation of emission factors might also be required for the fuels having the same properties but produced from different feedstock and production pathways.

1 In comparison with carbon contained in conventional fuels2 In this study, bio-LNG refers to Liquefied Bio-methane (LBM).3 The study has covered a wide range of alternative fuels, except Hydrotreated vegetable oil (HVO), ammonia, battery

and nuclear. This is due to a competing use of HVO by aviation sector. As for ammonia, there are uncertainty about safe handling and operation, emission of nitrous oxide (N2O) and estimated cost of technology. For battery-propulsion ships, the Improvement of energy density of battery is required in order to enable its application for large vessels and deep sea shipping. The application of nuclear-propulsion ships is controversial.

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1 Introduction

reduction target in 2030. In contrast, it is most likely that the radical reduction in CO2 emissions to meet IMO’s goal in 2050 cannot be achieved without the adoption of alternative fuels. Towards sustainable operations, worldwide research and development have been focusing on alternative sources of energy and the options include the consideration of the application of alternative fuels containing lower carbons, biogenic carbons, recycled carbons from carbon capture technology and ultimately zero carbons. To reduce GHG emission, the aviation sector has also identified liquid biofuels, for example, hydrotreated vegetable oils and Fisher-Tropsch jet fuel as drop-in fuels for fossil-derived jet fuels.

For shipping sector, there are several potential alternative fuels. These include (but not limited to) LNG, bio-LNG, biodiesel, methanol, bio-methanol and hydrogen. For the assessment of each type of alternative fuels whether it can genuinely support shipping industry to achieve GHG emission reduction target, it is necessary to consider not only its application onboard ships but also the whole value chain.

• Its generation, i.e. potential feedstocks, their availability, production pathways and technologies, current production capacity, the status of their usage and supply chain in well-established sectors and any surplus to support shipping sector

• Its logistics, involving its properties, storage requirement, safety and regulation as well as the requirement of bunkering infrastructure

• Its application onboard ships, involving technologies required for the application of alternative fuels (energy conversion system and fuel storage system) and cost

Throughout the value chain, the state of the art of alternative fuels’ technologies must also be addressed to understand existing technological barriers and realistic timeframe of their readiness in actual applications. Ultimately, this study aims to identify potential candidates with their practicality and their impact on GHG emission mitigation.

Other than the alternative fuels discussed in this report, it should be noted that shipping decarbonisation can be achieved by the adoption of other technologies, especially, the application of nuclear propulsion with merchant ships. It has been discussed intensively for more than four decades. The technology provides zero emissions of GHG and atmospheric pollutants. In comparison with conventional fuels, the fuel cost when using nuclear is likely to be lower (Vergara and McKesson, 2002). There are a number of nuclear-powered merchant ships, including Savannah, Mutsu and Sevmorput (Schøyen and Steger-Jensen, 2017). For all of its advantages, the nuclear-propulsion ship is something of a double-edge sword. Therefore, its commercial application is still a controversial topic. The major barriers include uncontrolled proliferation of nuclear material, decommissioning and storage of radioactive waste, and societal acceptance (Eide, et al., 2013). Since the future is still unknown, it is undeniable that a disruptor in maritime energy sources may arise from technology-based companies in other sectors, such as SpaceX, Amazon, etc.

Shipping plays an indispensable role in the global economy, transporting more than 80% of a total trade volume. Among several modes of cargo transportation, it enables the regional and intercontinental movement of large quantities of cargo in the most fuel-efficient way with lower cost. Currently, there are more than 90,000 commercial vessels worldwide with around 60,000 vessels larger than 500 GT. These ships are responsible for 2-4% of the world’s annual fossil fuel consumption, accounting for approximately 250 million tonnes per year or equivalent to the yearly energy consumption of around 9-10 EJ. Half of this energy is lost due to efficiency of energy converters onboard (i.e. about 50%). Based on the projected growth of the shipping industry using various future scenarios (IMO, 2014), the energy consumption is estimated to be around 12-14 EJ in 2030 and about 15-36 EJ in 2050.

The current operation of using fuel oil results in atmospheric emissions of pollutants, including sulphur oxides (SOx), nitrogen oxides (NOx), particulate matters (PM) and greenhouse gases (GHGs), especially carbon dioxide (CO2). The emissions of atmospheric pollutants from ships are regulated under IMO MARPOL Annex VI (i.e. Regulation 13 for NOx emission and Regulation 14 for SOx emission). To reduce GHG emissions from international shipping, IMO added a new Chapter 4 into MARPOL Annex VI in 2011 to introduce Energy Efficiency Design Index (EEDI) applying to new ships to improve their energy efficiency through ships’ design with the adoption of new technologies. The EEDI reduction factor is regulated, and it specifies the percentage of EEDI reduction with relative to the EEDI baseline of a particular type of ships (IMO, 2016; Tran, 2016).

Under business-as-usual, the emission of GHG, especially CO2, is anticipated to increase by 50% to 250% in 20504. With calls especially to make them aligned with Paris Agreement, MEPC 72 adopted the “Initial IMO Strategy on Reduction of GHG Emissions from Ships” in April 2018 with the level of ambitions as follows:

1 Carbon intensity of the ship: To decline through implementation of further phases of the energy efficiency design index

(EEDI) for new ships to review with the aim to strengthen the energy efficiency design requirements for ships with the percentage improvement for each phase to be determined for each ship type, as appropriate;

2 Carbon intensity of international shipping to decline: To reduce CO2 emissions per transport work, as an average across international shipping,

by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008; and3 GHG emissions from international shipping to peak and decline: To peak GHG emissions from international shipping as soon as possible and to reduce the

total annual GHG emissions by at least 50% by 2050 compared to 2008 whilst pursuing efforts towards phasing them out as called for in the Vision as a point on a pathway of CO2

emissions reduction consistent with the Paris Agreement temperature goals.

The adoption of technical and operational measures (T&O measures) is likely to be the major approach, facilitating the shipping industry to improve ships’ energy efficiency to meet IMO’s GHG

4 The modal shifts from sea to other modes of transport, such as rails (due to The Belt and Road Initiative adopted by Chinese Government) or futuristic transport technology (like Hyperloop) may possibly have an impact on the demand for shipping and, consequently, GHG emission reduction.

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Figure 1 Scope of the study

MBM Bunker levyOut-sector offset

Short-term Long-termMid-term 2030 20502018 2023

Projection

Evaluation

Based on economic performance

Evaluation of the application of alternative energy sources

• Generation (feedstock, production technology, current production capacity, demand & supply, cost, TRL)

• Transportation- Bunkering infrastructure- TRL

• Application onboard ships- Energy converters- Fuel storage- Concerns- CAPEX, OPEX- TRL

Available options and cost (energy and its converter)

Available options and cost (energy and its converter)

Fossil-based:LNG, methanol, hydrogen

Biomass-based:Bio-LNG, biodiesel, bio-methanol

Non-bio renewable:Renewable hydrogen

Evaluation of fuel consumption

• From IHSF database- Number of ships- World fleet information (ship

types, age, installed power, deadweight)

• 3rd IMO GHG Study- Auxiliary and boiler fuel

consumption- Shipping activity data

Energy consumption and ship information

Energy consumption and ship information

Diversification of energy sources

GHG emission reduction potential (absolute amount & intensity)

GHG emission reduction potential (g/kWh) of each option

GHG emission reduction potential (g/kWh) of each option

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An energy transition, according to Arent, et al. (2017), refers to “the time that elapses between the introduction of a new primary energy source, or prime mover, and its rise to claiming a substantial share of the overall energy market”. It is an ongoing process developing over time and results in more diversified energy sources to the energy supply system (World Economic Forum, 2013). The illustration of the historical transition of the global energy mix from 1800-2017 is shown in Figure 2. Over the past 200 years, the dominant primary energy source in the energy mix transitioned from traditional biomass to coal, oil, and gas. The historic time for each primary energy source to increase from 1 to 10 EJ in the global energy mix is considered sluggish (i.e. 52 years for coal, 33 years for crude oil, 39 years for natural gas and 59 years for hydropower) except for nuclear, spending 12 years. In the 1970s and 1980s, nuclear has gained a substantial share rapidly. Presently, the global energy mix continues to evolve, with a noticeably increasing share of renewable sources (such as wind and solar energy) in the last few years (Koppelaar, 2012; Nelson, 2019).

In different eras, the energy transition takes place due to different drivers at different speeds. Fouquet has reviewed and evaluated the lesson learnt from historical energy transition in various sectors, including the shipping sector. The study reveals that emerging technology plays a significant role in energy transition at a starting point when technology maturity and the price of new technology and energy will determine the speed of diffusion to the market. A successful new technology of energy system must provide the same service with superior or additional characteristics (e.g. easier to operate, more flexible to use or higher efficiency) (Fouquet, 2010; Fouquet, 2016). For example, coal enables industrialisation and transportation. Oil facilitates a significant improvement in mobility. Electricity provides a simpler approach for people to access and utilise energy in everyday life (World Economic Forum, 2013). After the emergence of a new energy system technology, there are three major steps of energy transition before it becomes dominant. Firstly, a small group of consumers need to be willing to pay a premium for the energy services attached to the new technology. Secondly, over time, economies of scale should subsequently improve the technology and the price of the energy source, driving down the cost of generating energy services, making it competitive with the incumbent energy technology and source. Finally, the falling price of the energy service is crucial in driving shifts to achieve a full energy transition. If the price of the service falls sufficiently (because the energy efficiency improves or the price of energy declines), full transitions could occur (Fouquet, 2010; Fouquet, 2016).

Under new policy scenario forecasted from 2016 to 2040 by International Energy Agency, the fossil fuels (i.e. coal, oil and natural gas) is anticipated to continue being dominant. The share of renewables is likely to increase gradually (Fouquet, 2010; Fouquet, 2016). The World Energy Outlook 2018 also anticipates the growth of electrification, expansion of renewables and globalisation of natural gas market (International Energy Agency, 2019). BP has launched The Energy Outlook to 2040 with consideration of a range of scenarios to explore different aspects (i.e. evolving transition, more energy, less globalisation and rapid transition). The share of renewables (i.e. solar, wind, biomass and biofuels) in the global energy mix will increase noticeably in all scenarios while the fossil fuels will remain a significant share in the global energy mix in 2040 (BP, 2019).

2 Global Energy Transition and Shipping Sector

Like other sectors, the shipping industry has witnessed the changes in primary energy sources led by a continual stream of technological innovation throughout the past few centuries. With the transition of primary energy sources, the propulsion technology of ocean-going vessels has been transformed significantly from sailing powered by wind until early 19th century and steam engines fueled by coal until the 2nd half of 20th century to diesel engines fueled by oil until now (Stopford, 2010). With a series of innovation of the diesel engine, heavy fuel oil (HFO) has become a fuel of choice for shipping industry since 1970 due to its applicability, its cost-efficiency and its ease of handling. By the start of the 21st century, ships driven by diesel engines accounted for more than 98% of the world fleet.

Against the progressive transformation of other industries and recent developments, there is a concern over the sustainability of the current practice of ship operation using HFO due to three major reasons as follows:

1 Implementation of current and upcoming regulations: to limit the emissions of sulphur oxides (SOx) and nitrogen oxides (NOx) from ships.

2 Introduction of Initial IMO Strategies on Reduction of GHG Emissions from Ships and future potential actions.

3 Uncertainty of fossil fuels reserves and price: Shipping operation relies heavily on the fuel cost, representing 20% to 60% of shipping cost. The fluctuation of oil price will directly affect the business.

In addition, market-based mechanisms (such as carbon tax and bunker levy) have been explored. It is considered as a measure to enhance the adoption of technologies for GHG emission reductions through making use of carbon-based fuels more expensive.

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Traditional biomass

Coal

Crude oil

Natural gas

Nuclear

Hydropower

Other renewables

1800

1807

1814

1821

1828

1835

1842

1849

1856

1863

1870

1877

1884

1891

1898

1905

1912

1919

1926

1933

1940

1947

1954

1961

1968

1975

1982

1989

1996

2003

2010

0

100

200

300

400

500

600

Glo

bal p

rimar

y en

ergy

con

sum

ptio

n (E

xajo

ules

)Energy source for shipping sector:

OilCoalWind

2017

Figure 2 The historical transition of global energy mix and shipping sectorSource: Ritchie and Roser (2018) for the data on global primary energy consumption.

11 Maritime Energy and Sustainable Development (MESD) Centre of Excellence Alternative Fuels for International Shipping 12

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3 Potential Alternative Fuels for Shipping Industry

To achieve GHG emission reduction targets, the shipping industry will need to consider the adoption of new technologies. The technologies can be divided into three major categories, including technical and operational (T&O) measures, carbon capture technology and alternative energy sources. T&O measures facilitate the improvement of ships’ energy efficiency. Although individual T&O measure can provide a possible energy saving of between 1-2% to 10-50%, not all measures are additive nor applicable simultaneously to all types of ships. According to the process modelling and simulation conducted by Luo and Wang (2017), the status of carbon capture technology is unlikely to be practical for ships due to its size, capital cost and energy consumption (Luo and Wang, 2017). The adoption of alternative fuels enables radical GHG emission reduction. In this context, the term “Alternative fuels” for the shipping industry refers to any fuels and/or sources of energy other than conventional fuels for powering ships. To serve the industry as next-generation fuels, i.e. enabling cleaner and greener emissions, alternative fuels must not contain sulphur but contain less carbon, biogenic carbon or zero-carbon in comparison with conventional marine fuels. Alternative fuels can be derived from three major groups of primary energy sources as follows:

1 Fossil fuels: The fossil energy sources are petroleum (oil), natural gas and coal.2 Biomass: The term “biomass” refers to non-fossilised and biodegradable organic materials

originating from plants, animals and microorganisms derived from biological sources. Via photosynthesis (also known as carbon fixation reaction), solar energy has been stored in the biomass in the form of chemical energy (plant materials). The example of biomass includes oilseeds, animal fats, energy crops, algae, organic waste, agricultural waste as well as wastewater.

3 Non-bio renewable energy: Non-bio renewable energy sources, including hydro, wind and solar power can be harvested and converted into secondary energy sources, particularly electricity. In conjunction with other feedstocks, particularly water (H2O), obtained electricity can lead to the production of hydrogen (H2). H2 can be used either as a fuel by itself or as a feedstock to produce other fuels.

An overview of alternative fuels having the potential for powering ships is illustrated in Figure 3. The diagram provides crucial technological components of each alternative fuel throughout their value chains, ranging from primary energy sources/feedstocks, production pathways, derived alternative fuels and bunkering logistics to its application onboard ships. To adopt certain alternative fuels, all technological components must be in place. The technologies throughout the value chain have to be ready, i.e. reaching Technology Readiness Level of 9 (TRL9). Primary energy sources, feedstocks and production capacities must be sufficient to enable the availability of alternative fuels for the industry. Also, there must be bunkering infrastructure and safe & efficient practice to enable fuel delivery to ships. Ultimately, ship owners and/or operators will adopt the application of alternative fuels when the energy converters, fuel storage and their support systems are suitable for design and operational profile of ships.

From the three major groups of primary energy sources with various production pathways, the derived fuels encompass the following fuels:

1 Alternative fuels containing less carbon: These include liquefied natural gas (LNG), methanol (CH3OH) and its derivatives,

2 Alternative fuels containing biogenic carbon: Typically known as “biofuels”, these include bio-liquefied natural gas (Bio-LNG), bio-methanol, biodiesel, hydrogenated vegetable oil (HVO), bio-oil, pyrolysis oil, etc.

3 Alternative fuels containing no carbon: Mainly consisting of electricity and resulting H2

In this context, “biofuels” refers to liquid or gaseous fuels produced from biomass. The biomass feedstock can be categorised based on their sources into four major groups (Darda, et al., 2019). First-generation feedstock (1G) refers to vegetable oil & animal fats and plants containing sugar & starch. Second-generation feedstock (2G) refers to lignocellulosic biomass and inedible oils. Third-generation feedstock (3G) refers to algae (macro and microalgae). Fourth-generation feedstocks (4G) come from waste and genetically modified algae. Waste includes municipal waste, food processing waste, sewage, plastic, organic waste, etc. Through conversion processes, biofuel products can be produced (Florentinus, et al., 2012). After coal, oil and natural gas, biomass stands as the world’s fourth-largest energy source. In comparison with fossil fuels, biofuels provide several advantages, especially in terms of the nature of their feedstocks i.e. being renewable, being carbon-neutral sources, distribution more evenly over the Earth’s surface than fossil fuel resources, environmentally benign harvesting and ultimately, lower GHG emission throughout their life cycle.

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Conventional FO Tank LNG tanks(cryogenic/compressed)

Other types of storage(liquid, gas or cryogenic liquid)

Primary Source Production Transportation Application

LiqTank-Fuel Oil

CryoTank-LH2

ComTank-LNH3

Metal hydrides-H2

LiqTank-MeOH

LiqTank-DME

LiqTank-Fuel Oil

CryoTank-LNG

IC diesel Engine

Fuel cell-H2 (or NH3)

IC Engine-H2(or NH3)

IC Engine-Dual fuel(NG-fuel oil, MeOH-fuel oil, DME-fuel oil)

IC diesel Engine

Regasification

MembraneSeparation

H2

Thermaldecomposition

Reformer

Regasification

LiqTank-Fuel Oil

CryoTank-LH2

ComTank-LNH3

Metal hydrides-H2

LiqTank-DME

LiqTank-MeOH

LiqTank-Fuel Oil

CryoTank (pipe)-LNG

CompTank (pipe)-NG

Liquefaction

N2

Catalyticconversion Ammonia Compression

Alkaline metal

Hydrogenation

Metal hydrides regeneration

Liquefaction

Extraction/Refineries

Fuel oil

Hydrogen

LNG

FT-diesel

DME

Methanol

Partial oxidation

Water/gas shift/Separation

Mining Gasification Synthetic gas Catalyticconversion

Steam reforming

Extraction/Treatment

Natural gas(methane) Liquefaction

Compression

Crude oil

Coal

Natural gas

LiqTank-Fuel Oil

LiqTank-MeOH

LiqTank-DME

LiqTank-Fuel Oil

CryoTank-LNG

IC Engine-Dual fuel(NG-fuel oil, MeOH-fuel oil, DME-fuel oil)

IC diesel Engine

Reformer

Regasification

LiqTank-Fuel Oil

LiqTank-DME

LiqTank-MeOH

LiqTank-Fuel Oil

CryoTank (pipe)-LNG

CompTank (pipe)-NG Liquefaction

Diesel (CxHy)

Bio-oil

Biodiesel

Methanol

DME

FT-diesel

Bio-LNG

Oil seeds

Microalgae

Animal fats

Lignocellulosic biomass

Animal farming

Anaerobic digestion

Extraction/Treatment

Flash pyrolysis(or Hydrothermal

Liquefaction)

Gasification Synthetic gas Catalyticconversion

Biogas Treatment

Steamreforming

Liquefaction

Compression

Transesterification

Hydrotreating/Refining

Water/gas shift/Separation

Bio-H2

Energy crops

Waste biomass

CryoTank-LH2

ComTank-LNH3

Metal hydrides-H2

LiqTank-MeOH

LiqTank-DME

LiqTank-Fuel Oil

Fuel cell-H2 (or NH3)

IC Engine-H2(or NH3)

IC Engine-Dual fuel(NG-fuel oil, MeOH-fuel oil, DME-fuel oil)

IC diesel Engine

Regasification

MembraneSeparation

H2

Thermaldecomposition

Reformer

CryoTank-LH2

ComTank-LNH3

Metal hydrides-H2

LiqTank-DME

LiqTank-MeOH

LiqTank-Fuel Oil

Liquefaction

N2

Catalyticconversion Ammonia Compression

Alkaline metal

Hydrogenation

Metal hydrides regeneration

Hydrogen

FT-diesel

DME

MethanolCO/CO2Catalytic

conversion

Water electrolysis

H2

Renewableenergy

Fossil-basedAlt Fuel

RenewableEnergy

Biofuels

Figure 3 Overview of alternative fuels from production and logistics to the application onboard ships

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Feedstock and production

Fossil-based LNG is obtained from the extraction of natural gas from the reservoirs, processing of obtained natural gas to remove non-methane hydrocarbons and impurities as well as liquefaction of treated natural gas to convert its state from gas to liquid. Biomethane is produced via anaerobic digestion and landfill degradation of biomass, including agricultural waste, organic waste, manure and sewage sludge. The obtained gas, also known as biogas, consists mainly of CH4 and CO2. Biogas can be upgraded using separation technologies to achieve its final product with the same quality of fossil-based natural gas. These include membrane separation, chemical scrubbing and pressure swing adsorption. The obtained biomethane can be distributed in either gaseous or liquefied forms by leveraging the natural gas infrastructure (Florentinus, et al., 2012; UNIDO and Fachverband Biogas, 2017). Also, there is a third production pathway of biomethane via gasification of lignocellulosic biomass; however, it has not been commercialised yet.

Current supply and demand

Fossil-based natural gas is ranked third for the abundance after coal and oil. As of 2017, the world proven reserves become 193,600 billion m3 with a reserve to production ratio of 52.6 years (BP, 2018). The biggest reserves are located in the Middle East (>30% of the world total reserves), in Europe and the former U.S.S.R. (~40% of the total world reserves). Other significant reserves exist in North America, Asia Pacific and Africa. The majority of fossil-based natural gas today is used mainly as a source of energy for electricity generation, heating and cooking. It is also utilised as a fuel for vehicles and as a chemical feedstock in the manufacture of plastic and chemicals. In 2014, the production of biogas is estimated to be around 352,780 TOE worldwide (Sapp, 2017) or equivalent to 50 billion m3 (assuming 60% CH4 content) with major producers in Europe, USA, China and Russia. Typically, biogas is used in local power plants. After upgrading to biomethane, it can be injected into the gas grid for further use in heat, power and transport sectors (Florentinus, et al., 2012). According to the World Bioenergy Association, the technical potential of biogas is estimated to be 1,000 billion m3 of CH4 annually.

“Liquefied Natural Gas (LNG)” generally refers to natural gas, also known as methane (CH4), having been converted to liquid form and stored at -160°C. Natural gas is colourless and lighter than air with a relative density at 15°C of 0.72-0.81 (Mokhata and Poe, 2012). Fossil-based LNG contains less carbon than that of conventional marine fuels while Bio-LNG contains biogenic carbons. The interest in fossil-based LNG stems from its abundance, its competitive price in comparison with conventional marine fuels and its performance of emission reduction. Bio-LNG has a similar nature to that of LNG and, therefore, its application can leverage LNG infrastructure. The interest in LNG as marine fuel opens an opportunity for Bio-LNG in the shipping sector. Bio-LNG is present as biofuel, containing biogenic carbons. Along with the abundant fossil-based LNG, Bio-LNG could offer further GHG emission reduction to up to 80%.

Liquefied Natural Gas3.1

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Application of LNG in the Shipping Sector

Bunkering infrastructure

Typically, there are three major types of LNG bunkering approaches, including LNG bunkering by trucks (Truck-to-Ship), LNG bunkering by ships (Ship-to-Ship or Barge-to-Ship) and LNG bunkering from fixed stations (Shore-to-Ship). Truck-to-Ship is currently the most widely used bunkering method due to uncertain demand for LNG and relatively low investment cost. However, this method can provide a limited capacity and its operation interrupts other quayside activities. Ship-to-Ship is the most common bunkering method used for bunkering ocean-going vessels of conventional marine fuels (HFO and MGO). This method can take place at different locations, e.g. along the quayside, at anchor or sea. Hence, it can avoid the interruption in the operation of other quayside activities. However, the investment cost is high. LNG can be bunkered directly either from an intermediary tank or small station or from an import/export terminal via pipelines. LNG fuelled ships will need to visit fixed stations and therefore, it is suitable for ships with less strict and regular timetable (CCD TT and Herbert Engineering Corp, 2013; World Ports Climate Initiative, 2018). Although LNG is currently available as bunker fuel for maritime and inland shipping at many ports, lack of bunkering infrastructure is still one of the main barriers for the use of LNG.

Application onboard ships

The application of LNG onboard ships requires two major components, the LNG fuel propulsion system and the LNG fuel tank with support systems.

• Among available LNG fuel propulsion options5, the medium-speed dual-fuel diesel engine is the most popular for onboard ship application due to (1) its in-use technology with good service history, (2) its being safer than using high pressure required in the low-speed diesel engine and (3) its wide range of available power size.

• The available IMO tank types include Type A and B (i.e. structural tank built into the hull with the requirement of low pressure and constant consumption of boil-off gas (BOG) as well as Type C (i.e. most widely used due to its allowance of BOG retention leading to less wasted fuel). Fuel tanks are expensive because they require special materials for cryogenic temperature, pressurized vessels and gas control equipment. Fuel tanks can also result in loss of vessel cargo capacity due to its large volume tank to achieve a specific desired total energy content of bunkered fuel.

In addition to the aforementioned components, there is a need for a specific safety system. These include double wall piping with the space between inner and outer pipes vented to atmosphere to allow natural gas pipes to run through machinery space without creating hazardous areas and vent rise mast with the height of one-third of the beam above weather deck to provide a hazardous outlet (CCD TT and Herbert Engineering Corp, 2013). Due to the complexity of the fuel and machinery systems and the need for more safety features, LNG fuelled ships are more expensive as compared

to conventional ships by as much as 30%. In terms of the operation of LNG fuelled ships, it requires special crew training for the onboard service and during the bunkering process. Its complex system might lead to an increase in maintenance cost. There are also some operation issues when using a medium-speed diesel engine and these include 10% higher fuel consumption when operating on diesel oil, possible methane slip and manoeuvring issue when operating on gas at low power (<15%MCR).

Emissions onboard ships

Both fossil-based LNG and bio-LNG are cleaner fuels and their combustion emits less amount of pollutants (i.e. SOx, NOx and PM) in comparison with those emitted by the combustion of conventional fuels. Typically, LNG provides negligible emissions of SOx and PM with more than 80% of NOx emission reduction. However, the use of fossil-based LNG might not reduce the emission of GHG significantly due to methane slip from its operation. The reduction of GHG emission by LNG could be around 8% to up to 20% because a small leakage of CH4 can cancel out its beneficial effect of GHG emission reduction. All engine manufacturers have been putting continual R&D efforts to minimise methane slip. It is important to note that methane slip could be solved by improvement of combustion process and using catalytic converter (Salem, et al., 2014). According to MAN Diesel & Turbo, low-speed diesel engines with high-pressure injection have found to have almost no methane slip (0.1% of SFOC) (Gingell, 2016). However, there are trade-offs, including cost of the complex fuel gas supply system and emission of NOx (Sharafian, et al., 2019). Bio-LNG contains biogenic carbon and hence, the combustion of Bio-LNG results in the emission of biogenic CO2 (Florentinus, et al., 2012).

5 Steam boiler and turbine, medium-speed diesel engine, low-speed diesel engine and gas turbine with waste heat boiler

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Feedstock and production

The feedstock ranges from vegetable oils (edible and inedible oils), waste cooking oil and animal fats to other oleaginous sources such as microalgae (Lin, 2013). The most widely used feedstock are currently rapeseed oil, palm oil, soybean oil, used cooking oil and animal fats. Due to the geographical location and climate, the available feedstock is different in different regions. Although the aforementioned feedstock contains triglyceride, their fatty acid profiles (i.e. components of triglyceride) are different. These result in observable differences in the properties of biodiesel obtained. The transesterification process is used when the feedstock contains FFA of less than 0.5%. Approximately, one tonne of biodiesel can be produced from one tonne of oil reacting with around 0.1 tonnes of methanol. The reaction also leads to the production of glycerine as a by-product of 0.1 tonnes (Gerpen, 2005; Florentinus, et al., 2012). Since, FFA reacts with alkali catalyst undesirably to form soap instead of FAME, the feedstock containing higher FFA will need to undergo esterification instead. In the esterification process, the acid catalyst is used for the conversion of FFA to FAME.

Current supply and demand

Global production of biodiesel is estimated to be around more than 36 billion litres (or equivalent to 31.5 million tonnes) in 2017 (OECD and FAO, 2018). The major feedstock consists of edible vegetable oils (i.e. palm oil, soya oil and rapeseed oil) with minor feedstocks including animal fats and used cooking oil. The global biodiesel production is anticipated to reach 39.3 billion litres (or equivalent to 34.4 million tonnes) in 2027 (9% increase in comparison with 2017’s production). Vegetable oil continues as the major feedstock of choice for biodiesel production. Due to the issue of sustainable feedstock for biodiesel production, there is an effort to increase the production of biodiesel from inedible oil, animal fats and other biomass such as microalgae. The European Union is by far the first major producer of biodiesel. The second and third biodiesel producers are the United States and Brazil, respectively. Other major producers of biodiesel are Germany, Argentina, China, Indonesia, Thailand, Canada, Netherlands, Spain, Poland, India and Columbia (OECD and FAO, 2018; Dutton, 2018; Oil World, 2019).

Currently, biodiesel is used for blending with fossil-based diesel for road transportation to meet domestic mandates in many countries, including the US, European Union, Japan, China and Southeast Asian countries. Out of 31.5 million tonnes of biodiesel production in 2017, only a small portion (3.5 million tonnes) was traded. This results from internal fulfilling to the domestic consumption to achieve biodiesel mandates in producer countries. In the future, European and the United States biodiesel use is envisaged to decrease due to a substantial decrease in diesel use (OECD and FAO, 2018).

“Biodiesel” typically refers to Fatty Acid Methyl Esters (FAME) produced from the transesterification of triglycerides or esterification of free fatty acids (FFA). It is present in a liquid phase at room temperature. It is not flammable liquid with a high flash point (ranging from 150°C to 160°C). Depending on the feedstock used in FAME production, its colour varies from crystal-clear to deep dark brown but the colour does not reflect its quality (Bello, 2016). Biodiesel contains biogenic carbon and, consequently, its combustion onboard ships emits biogenic CO2, being considered no contribution to global warming. Due to its compatibility, it can be used as a drop-in fuel with marine distillate and it is applicable with existing marine engines, possibly with minor modification.

Biodiesel3.2

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Application of Biodiesel in the Shipping Sector

Bunkering infrastructure

Due to its compatibility nature with fossil-based diesel, biodiesel is applicable with existing bunkering infrastructure. For biodiesel-blended marine distillate (such as B2, B10 and B20), its preparation, pre-mixing process, can be performed at the refineries as appropriate before distribution for bunkering at ports. However, biodiesel is biodegradable. The quality of biodiesel, especially its oxidative stability must be attended to before its long-term storage.

Application onboard ships

Biodiesel is compatible with internal combustion engines and their fuel systems. It can be used as an alternative marine fuel in any proportion without requiring any major modification of internal combustion engines and their support systems. Although many marine engine manufacturers have certified their engines for operation using biodiesel or a blend of biodiesel with fossil-based diesel, the engine manufacturer should be consulted to ensure the blending ratio acceptable for their engines before its application due to the following concerns:

• Biodiesel with a relatively high cold flow plugging point (CFPP) may cause engine breakdown, particularly when vessels sail in low-temperature regions or cold seasons. The feedstock used for biodiesel production has a strong influence on biodiesel fluidity at low temperatures. Different types of vegetable oils contain different fatty acid profiles ranging from saturated, mono-saturated and poly-saturated fatty acids with carbon-chain of C14 to C22. A saturated fatty acid and long carbon-chain fatty acid content higher than C20 in biodiesel results in a higher CFPP. Additives can be used to lower the cloud point (McGill, et al., 2013; Lin, 2013).

• Biodiesel can degrade over time due to its susceptibility to oxidation of fatty acids’ double bonds (such as esters of oleic and linolenic). Degradation of biodiesel is caused by three major mechanisms, i.e. autoxidation, photo-oxidation and hydrolytic oxidation. The rate of oxidation can vary substantially but it is mainly dependent on the numbers and positions of double bonds. The species formed during the oxidation process include peroxides, acids and other insoluble eventually causing the fuel to deteriorate. The deterioration of biodiesel can be solved by using antioxidant to increase its oxidative stability.

• There is a concern over the compatibility of the fuel supply system and storage materials with biodiesel. Biodiesel can dissolve certain non-metallic materials (i.e. elastomer rubbers and plastic materials) in the fuel supply system, leading to material softening, degrading and ultimately leaking. Biodiesel can also interact with certain metallic materials used for fuel storage tanks because of the oxidation reaction of these materials with biodiesel chemical compounds. The metallic materials susceptible to biodiesel include copper, brass, tin, bronze and zinc. The actual degradation rate of the aforementioned materials depends on the exact fatty acid profiles contained in biodiesel. (McGill, et al., 2013; Lin, 2013).

To overcome the aforementioned concerns, there is a need to develop a marine-grade biodiesel specification before the actual application of biodiesel in the shipping industry.

Emissions onboard ships

Biodiesel does not contain sulphur and; therefore, its combustion does not emit sulphur oxides (SOx). Also, the emissions produced from biodiesel combustion does not contain polycyclic aromatic hydrocarbons (PAH). For the blended fuels, the emissions of particulate matters (PM), hydrocarbon (HC) and carbon monoxide (CO) are reduced as the amount of biodiesel in the blended fuel increases. However, the operation of internal combustion engines using biodiesel seems to emit 10% more nitrogen oxides (NOx) than using conventional diesel (Shay, 1993; Lin, 2013).

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Feedstock and production

Methanol can be produced from any carbon-containing feedstocks, ranging from fossil fuels (i.e. natural gas, coal and crude oil), biomass (e.g. energy crops, agricultural residues, etc.) and non-bio renewable energy in conjunction with CO2 emitted from industrial sectors. By far, the majority of methanol is currently produced from natural gas (~90% of methanol produced worldwide) and the rest is from coal. All kinds of biomass, such as waste wood, forest residues and even municipal solid waste can be used as feedstock for methanol production. In Sweden, black liquor produced from a pulp and paper mill has been used (Andersson and Salazar, 2015; Dalena, et al., 2017). Typically, the production of methanol takes place via three basic steps: (1) production of synthesis gas6 via steam reforming or partial oxidation of heavy hydrocarbon and gasification of biomass; (2) conversion of synthesis gas into methanol in the presence of catalyst at 200-300°C and 40-100atm; and (3) distillation of crude methanol to achieve 99.5% purity. Alternatively, CO2 emitted from industrial sectors, particularly power plants can be utilised in conjunction with hydrogen preferably from the electrolysis of water using non-bio renewable energy for the production of methanol. The CO2 hydrogenation takes place in the presence of a catalyst. The cost of the process of CO2 hydrogenation is much higher than the cost of the process using CO obtained from gasification of biomass (Kulawska and Madej-Lachowska, 2013).

Current supply and demand

Global production of methanol is estimated to be 110 million tonnes in 2015 and to reach 130 million tonnes in 2018 (Andersson and Salazar, 2015; HIS, 2016). The major producers include China, Saudi Arabia, Trinidad, Eastern Europe, Western Europe, South America, Southeast Asia, Iran, Oman, Africa, New Zealand, Qatar, the United States and India (Yang and Jackson, 2012). Methanol is used for many purposes, mainly in the chemical industry for the production of formaldehyde, ethanoic acid, ethers, biodiesel, dimethyl ether, methylamines, ethane, propane and others. Its use as a fuel accounts only for around 10%, mostly used as a blend in gasoline. The global commercial production of bio-methanol is still limited due to technological development and commercial availability. Increasingly, it has gained great attention in the current decade. In Netherland, there is one bio-methanol plant (450,000 tonnes per year) using crude glycerine as a feedstock. Canada produces bio-methanol (and bio-ethanol) from non-recyclable municipal solid waste and utilises in chemical and transportation sectors. In Iceland, Carbon Recycling International has set up a methanol plant using CO2 as a feedstock. Also, Mitsubishi Heavy Industries has developed Carbon Dioxide Recovery (CDR) technology and operates successfully to generate renewable methanol in Bahrain and Qatar. The Azerbaijan Methanol Company (AzMeCo) is planning to operate similar CDR technology at its Baku-based methanol production facility.

“Methanol (MeOH)” refers to methyl alcohol (CH3OH) – the simplest form of alcohols. Methanol is colourless liquid at room temperature. It is light and volatile liquid (vapour pressure 0.128 bar) with a distinctive odour similar to that of ethanol. It is flammable at room temperature (flashpoint 12°C) and burns with an almost invisible blue smokeless flame. In comparison with conventional marine fuels, fossil-based methanol contains less carbon while biomass-based methanol contains biogenic carbon. The interest in methanol stems from two major aspects. For the shipping industry, it has gained increasing attention as a cleaner fuel for the shipping industry, i.e. reduction of SOx, NOx and PM emissions. Also, it is in a liquid form present as a current commodity. Therefore, it can leverage the existing distribution infrastructure for bunkering.

6 Mainly consisting of H2 and CO

Methanol3.3

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Application of Methanol in the Shipping Sector

Bunkering infrastructure

Methanol is available worldwide in all major shipping hubs as a commodity for the chemical industry. The distribution of methanol from the hubs to end-users is performed by either 1,200-tonne barges, rails or tank trucks. Now, truck-to-ship is the approach for bunkering methanol-fuelled ships. The trucks deliver methanol to a bunkering facility with pumps built-in containers on the quay next to the ferry. The first of these fuelling facilities has been in service since April 2015.

Application onboard ships

Existing marine engines can be modified to burn methanol (using either dual-fuel engine or spark-ignition engine). However, the application of methanol onboard ships has three major concerns as follows:

• The energy density of methanol (15.7 MJ/L) is less than half of the energy density of conventional fossil fuels (~40 MJ/L), leading to the requirement of bigger fuel storage space onboard a vessel as compared to conventional fuels. This leads to the requirement of a larger space for methanol storage if the vessel needs to travel the same distance as when travelling using conventional fuels. If otherwise, there is a need for more frequent bunkering.

• Methanol can also be corrosive to various materials. Therefore, the compatibility of materials for tank coatings, piping, seals and other components must be considered carefully. In general, stainless steel is compatible with methanol (Ellis and Tanneberger, 2015).

• Methanol is considered as a hazardous chemical due to its low flash point (<60°C) and toxicity. Therefore, it requires additional considerations during its usage as a fuel onboard ships. When burning, it generates a clear flame, which is difficult to observe in daylight. It has a low vapour pressure of 0.12 atm at 20°C with its vapour relative density of 1.1 in comparison to air. Its flammability limit is much wider than that of conventional fuels. Besides, methanol is toxic to humans; thus, it is necessary to have a measure to prevent the possibility of ingestion, inhalation exposure and skin contact during its usage. IMO regulation for its application for the maritime industry is under development. In the case of methanol spill into the sea, methanol is fully miscible with water and dissolved readily. It is biodegradable and does not bioaccumulate. According to GEMSAMP rating system (Joint Group of Expert on the Scientific Aspects of Marine Environmental Protection), methanol is not rated as toxic to aquatic organisms for both acute and chronic toxicity measures (Ellis and Tanneberger, 2015).

Emissions onboard ships

Methanol is considered as a cleaner fuel since it does not contain sulphur. As for other atmospheric pollutants, a series of tests have been conducted on Wärtsilä Vasa 32 engine and a Wärtsilä Sulzer Z40SMD (i.e. the same engine type that was retrofitted for the Stena Germanica) and the results have been reported as follows:

• NOx emission ranges from 3 to 5 g/kWh when using methanol in comparison with 11.8 g/kWh when using MGO. This is due to a lower combustion temperature of methanol due to the dual-fuel engine combustion principle.

• CO and THC emissions were reported to be less than 1 g/kWh when burning methanol. There was no methane slip and formaldehyde was below TA Luft (Technical Instructions on Air Quality Control) levels.

• PM emission: Methanol combustion can achieve 95% PM emission reduction in comparison with that produced from the combustion of HFO380.

In addition, a Japanese study in the early 1990s measured emissions from laboratory testing of a high-speed 4-stroke diesel engine operating on methanol with pilot fuel. NOx emissions were reported as half of those for operation on marine gas oil under the same load conditions (Ellis and Tanneberger, 2015).

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Feedstock and production

Hydrogen can be produced from a wide range of primary energy sources, including fossil fuels (coal, oil and natural gas either with or without zero emissions using carbon capture technology), biomass, as well as non-bio renewable electricity (e.g. wind and solar energy) in conjunction with water electrolysis. With the aforementioned primary energy sources, it can be produced via several production pathways. Typically, hydrogen production takes place via synthesis gas production process, i.e. steam reforming, partial oxidation and gasification. Alternatively, the hydrogen production can be performed via electrolysis of water.

Current supply and demand

Currently, the production of hydrogen worldwide is about 70 million tonnes per year and the amount is just to cover the present needs of hydrogen (IEA, 2019). In the market, hydrogen supply comprises two segments, i.e. merchant hydrogen and captive hydrogen. The merchant hydrogen refers to hydrogen generated on-site or in a central production facility and delivered to end-users via pipeline, bulk tanks and cryogenic trucks. The captive hydrogen refers to hydrogen produced at the point of usage to supply to the end-users for internal use. Industrial facilities often build their hydrogen production unit to ensure secure supply & safety and to avoid transportation difficulties (Valladares, 2017). Hydrogen is presently used on a large-scale as a feedstock in the chemical and petrochemical industries for producing principally ammonia and fertiliser (51%), for hydrocracking and desulphurisation to obtain refined petroleum products (35%), and producing a wide variety of chemicals, including methanol (8%). It is also used in metallurgic, electronic and pharmaceutical industries. Although hydrogen has already been used as a fuel, the majority is still used as a propellant for rockets and space shuttles. Regardless of its present application, the current annual production of 70 million tonnes of hydrogen represents only less than 2% of the world’s primary energy demand. Using hydrogen as the main energy source implies enormous investment to increase the production capacity and to establish the necessary infrastructure for storage and distribution. The existing hydrogen industry and its supply chain are expected to serve as a platform for future uses of hydrogen (Olah, 2009; Valladares, 2017; IEA, 2019).

“Hydrogen (H2)” – the simplest and lightest element, is one of the most abundant elements in nature. However, hydrogen is present commonly in its compound forms (such as H2O) rather than its pure form of H2 (Biert, et al., 2016). Hydrogen has been advocated as an ideal energy carrier for the future due to three major unique advantages. Firstly, it can be produced from a variety of primary energy sources, including fossil fuels, biomass and non-bio renewable energy. Secondly, it has the highest energy content in terms of weight. Thirdly, the main by-products generated from its combustion are water with a minor amount of NOx. If the fuel cell is used instead of ICE, the by-product will only be water. However, hydrogen is colourless and odourless gas. Hydrogen gas is highly flammable. It can burn in air at a wide range of its concentrations (4%-75% by volume). Pure hydrogen-oxygen flames emit ultraviolet light, invisible to naked eyes. Therefore, the detection of burning hydrogen leak is difficult and requires a flame detector. Safe handling of hydrogen is of utmost importance.

Hydrogen3.4

Although hydrogen production from fossil fuels is relatively inexpensive, the process relies on the separation of hydrogen from fossil fuels and emits large amounts of CO2. At present, water electrolysis is much more expensive. It is preferential when high-purity hydrogen is needed. The cost of hydrogen produced by this approach could become acceptable if electricity were to become cheap or if a novel high-efficient process were to be developed (e.g. high-temperature electrolysis). Non-bio renewable energy, such as wind and solar energy can lead to the sustainability of hydrogen production without CO2 emission. Currently, the world’s hydrogen supply is mostly supplied using fossil fuels as feedstock (96% of the world’s hydrogen supply) with almost half being produced by the steam reforming of natural gas (48%). Around 30% and 18% of hydrogen supply are from oil and coal, respectively. Only 4% of the hydrogen produced worldwide is from water electrolysis. The production of hydrogen from fossil fuels could be considered as “technology bridge” towards novel high efficient processes and ultimately to achieve CO2-free production technologies (Conte, et al., 2001).

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Application of Hydrogen in the Shipping Sector

Bunkering infrastructure

Currently, the logistic of hydrogen has been performed using special tanks to transport and distribute hydrogen in gaseous or liquid form as well as using a dedicated pipeline to deliver hydrogen in gaseous form at high pressure. However, most hydrogen is produced in the place of demand as described previously. The development of hydrogen-based infrastructures is still encountering technological and economic constraints and they need to be overcome before moving towards widespread application of hydrogen as a fuel. The lack of safe, efficient and cost-effective storage system is one of the major obstacles.

Application onboard ships

For the potential application of hydrogen as the main fuel onboard ships, there are two major options of energy converter systems i.e. hydrogen-fueled internal combustion engines and fuel cells. Between these two options, hydrogen-fuel cells have gained more attention due to their clean by-product (H2O) and energy efficiency. Among fuel cell types7, low temperature proton exchange membrane fuel cell (LTPEM FC) has achieved rapid development in the last decades and it now becomes a mature technology with the efficiency of around 60%. The technology has been tested onboard ships, including naval ships and passenger ships. Due to its low operating temperature (65°C-80°C), LTPEM FC requires a platinum catalyst to enable electrochemical reactions. The necessity of wet membrane, while the gas-diffusion pores have to remain dry requires a complex

water-management system. LTPEM FC has a limited tolerance to fuel impurities, particularly CO2. At low temperature, CO2 will be strongly absorbed on the surface of catalyst leading to catalyst deactivation. In addition to fuel cells, auxiliary components, also known as balance of plant (BoP) are required to generate electrical power with fuel cell stacks. These include, for example, pump, blower compressors, heat exchangers, and system controls (Biert, et al., 2016).

Hydrogen storage is considered as one of the main obstacles against the adoption of hydrogen as a fuel onboard ships due to its low energy density and its safety. Hydrogen can be stored in several forms, such as compressed hydrogen, liquefied hydrogen, metal hydride, high-surface-area adsorbents and chemical H2 storage materials like methanol and ammonia. The storage in solid media is safer and more efficient than compression and liquefaction due to leak-proof status, higher charging efficiency and lower self-discharge (Conte, et al., 2001). One of the important criteria for hydrogen storage technologies to enable actual application onboard ships is the energy content. It is important to note that the energy content of compressed and liquefied hydrogen tanks is still very low for the same tank volume when compared with conventional marine fuels. Although hydrogen can also be stored in chemical H2 storage material, such as methanol, ammonia or natural gas, their applications require onboard conversion system, i.e. reforming, CO removal and others (e.g. desulphurisation) to convert the mentioned fuels to hydrogen. These result in a significant impact on the overall performance of the system, (for example, efficiency, size, weight and cost). It should be noted that methanol can be used directly with fuel cell technology (Direct Methanol Fuel Cell (DMFC)) but its efficiency is still low (as low as 20%) (Biert, et al., 2016).

In comparison with other fuels, the flammability range of hydrogen is very wide, from 4%-75% by volume in the air. Hydrogen is colourless and odourless. It is also the lightest and smallest element. Currently, there is no known odorant, which is light enough to travel with hydrogen at the same dispersion rate. Besides, odorants might contaminate fuel cells, which are important applications for hydrogen. Hydrogen burns with a pale blue flame but it is invisible during daylight hours. It is almost impossible to see with the naked eyes. Therefore, safe handling of hydrogen is of crucial importance. Bureau Veritas (BV) Classification Society has initiated the development of guidelines for the use of hydrogen as a fuel onboard commercial ships. The guidelines adopt existing regulations for gas-fuelled ships with regulations for terrestrial fuel cell power system adapted for the application onboard ships. The trial application of the guidelines has been performed with several pilot projects, including hydrogen-powered hybrid electric harbour tug (Seddiek, et al., 2015).

Emissions onboard ships

Among potential alternative fuels, H2-FC, especially when using pure hydrogen as a fuel is the only approach capable of achieving zero-emission onboard ships. The by-product obtained from the H2-FC is only water without any emissions of atmospheric pollutants and GHG. If the fuel cells use other fuels instead of pure hydrogen, there will still be GHG and probably other atmospheric pollutants generated due to the content of carbon and other impurities in the fuels. The mentioned fuels include, for example, diesel, LNG and methanol. As for H2-ICE, the combustion of hydrogen in the presence of excess oxygen generates water (H2O) and nitrogen oxides (NOx). In addition, a trace amount of carbon dioxide and carbon monoxide would be present in the exhaust gas due to the application of the lubrication oil in the ICE system.7 Alkaline Fuel Cell (AFC), Molten Carbonate Fuel Cell (MCFC), Phosphoric Acid Fuel Cell (PAFC), Low

Temperature Proton Exchange Membrane Fuel Cell (LTPEM FC), Solid Oxide Fuel Cell (SOFC) and Direct Methanol Fuel Cell (DMFC)

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4 Characteristics of Alternative Fuels – Comparisons

The characteristics of alternative fuels play an important role in their onboard application. The characteristics of alternative fuels can reflect their applicability and practicality, for example:

1 The physical state of a fuel indicates its ease of handling, i.e. whether the fuel is liquid or gas at room temperature.

2 Space requirement for fuel storage depends on the energy density of the fuel (expressed in the unit of MJ/L fuel). For hydrogen in particular, the fuel storage space is also governed mainly by the storage approach, i.e. compressed gas, liquefied H2, metal hydride, carbon nanostructure or organic liquid H2 carrier.

3 Parameters, including specific energy (expressed in MJ/kg fuel) and specific fuel consumption (expressed in g/kWh), also indicate the required fuel amount to be stored onboard ships leading affordable distance between bunkering and also operating cost.

4 The precautions needed for safe handling and use of each alternative fuel can be considered from parameters, including flash point, vapour density, vapour flammability limit as well as the number indicated in NFPA diamond (National Fire Protection Association Hazard Identification system).• Blue diamond: Blue represents a health hazard, i.e. 0=Normal material, 1=Slightly

hazardous, 2=Hazardous, 3=Extremely danger and 4=Deadly.• Red diamond: Red represents fire hazard (flash point and flammability), i.e. 0=Will

not burn, 1=Above 93°C, 2=Above 37°C and not exceeding 93°C, 3=Below 37°C and 4=Below 22°C.

• Yellow diamond: Yellow represents reactivity, i.e. 0=Stable, 1=Unstable if heated, 2=Violent chemical change, 3=Shock and heat (may detonate) and 4=May detonate.

• White diamond: White represents special hazard, i.e. W=Use no water, =Radioactive, OXY=Oxidiser, COR=Corrosive, ALK=Alkali and ACID=Acid.

The aforementioned characteristics of various alternative fuels are provided in Table 1. Technically, the attention has been drawn to energy density and specific energy of the fuels since they have a significant impact on the size and weight of fuel storage. Generally, the higher the energy density, the smaller the size of the tank; and the higher the specific energy, the less the amount of fuel required. Fuels with an energy density of below those of conventional marine fuel oils will require bigger storage space to contain the amount of fuel required to travel for the same distance to that when using conventional marine fuel oil. Although hydrogen seems to be superior to other fuels in terms of specific energy, meaning that with the same weight of fuels, hydrogen provides much higher energy. With the inclusion of weight of its storage (e.g. metal hydrides, etc.), other fuels have, in fact, the advantage over hydrogen. As discussed earlier, hydrogen storage is still the main challenge for its application onboard ships. In addition to the energy contents of fuels, the dimension and weight of the overall system are also indispensable criteria crucial for the adoption of alternative fuels. The overall system includes (but not limited to) energy converters with their auxiliary systems, energy storage system, the energy content in the fuels as well as overall system efficiency and/or specific fuel consumption of particular power system technology.

CHARACTERISTICS CONVENTIONAL FUELS LNG METHANOL BIODIESEL HYDROGEN

HFO/LSFO MGO

Primary energy source Petroleum oil Petroleum oil Natural gas, Biomass-based

Fossil-based, Biomass-based and CO2 with

non-bio-renewable H2

Biomass-based (feedstock containing

triglyceride)

Fossil-based, Biomass-based and CO2 with

non-bio-renewable H2

Major component Heavy hydrocarbon

Light hydrocarbon

CH4 CH3OH FAME H2

Physical State Liquid Liquid Cryogenic liquid Liquid Liquid Gas

Energy density (MJ/L) 38.2 36.6 20.8 (liquefied) 15.8 33.3 8.49 (liquefied)

Specific energy (MJ/kg) 39 42.8 48.6 19.9 35-37 120

Specific fuel consumption(g/kWh)

195 185 166 381 185 57

Boiling point @1 atm (°C) - 175-650 -160 65 - -253

Density @15°C (kg/m3) 989 900 (max) 448 @-160°C, 1atm

796 887 70.8 @-253°C, 1atm

Kinematic viscosity @40°C (mm2/s)

- 2.5-4.5 - 0.6 4-5 -

Vapour pressure @20°C (atm) - ~0.03 - 0.13 - -

Vapour density (air=1) >1 >5 0.55 1.1 - 0.07

Flashpoint (°C) >60 >52 -175 12 150-160 -

Auto ignition temperature (°C) >300 250-500 450-560 464 370-450 571

Vapour flammability limit (vol%)

- 0.3-10 5-15 6-36 - 4-75

NFPA diamond:

21 0

20 0

43 0

31 0

10 0

40 0

Fire hazard,

Reactivity,

Health,

Specific hazard

Table 1 Characteristics of various alternative fuels in comparison with conventional marine fuels

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Before the discussion on GHG emission by conventional marine fuels and alternative fuels, it is important to understand the terms “fossil carbon” and “biogenic carbon”. The global carbon cycles describe the carbon pools and fluxes at a global scale as shown in Figure 4. It also describes where carbon can be stored in pools or where it is released as fluxes. There are six main pools holding varying amounts of carbon, including the earth’s crust, the ocean, fossil fuels, soil, the atmosphere and biomass.

Carbon moves from one pool to another through a variety of mechanisms. For example, the loss of carbon from the soil through degradation causes the increase in carbon either in the atmosphere leading to global warming or in the ocean leading to acidification. In the 21st century, an imbalance in the global cycle (i.e. the increase in CO2 in the atmosphere) is mainly influenced by the combustion

5 GHG Emissions by Alternative Fuelsof fossil carbon also typically known as fossil fuels to produce energy. Fossil carbon has been accumulated over millions of years to its present forms (i.e. fossil carbon within petroleum oil, coal and natural gas). The accumulation of biogenic carbon in biomass takes place via photosynthesis of plants and other organisms to convert light energy in conjunction with carbon dioxide and water into chemical energy stored in carbohydrate molecules in biomass. In contrast to fossil carbon, biogenic carbon-containing in biomass has a much shorter time scale for carbon cycling (Harris, et al., 2018). Burning fossil fuels releases carbon that has been fixed in the ground for millions of years while burning biomass emits carbon that is part of the biogenic carbon cycle.

IPCC differentiates between the “slow domain” of the carbon cycle, where turnover times exceed 10,000 years, and the “fast domain” (the atmosphere, ocean, vegetation and soil), vegetation and soil carbon have turnover times in the magnitude of 1-100 and 10-500 years, respectively. Fossil fuel transfers carbon from the slow domain to the fast domain, while bioenergy systems operate within the fast domain. In other words, fossil fuel use increases the total amount of carbon in the atmosphere while bioenergy system operates within its system, i.e. biomass combustion simply returns to the atmosphere the carbon that was absorbed as the plants grew.

Carbon dioxide is the most common GHG emitted by human activities in terms of the quantity released and the total impact on global warming. However, the major GHGs include not only CO2 but also methane (CH4), nitrous oxide (N2O), ozone and so on. Different GHGs last in the atmosphere for varying lengths of time, and also they absorb different amounts of heat. The “global warming potential” (GWP) of GHG indicates the amount of warming a gas causes over a given period (normally 100 years). GWP is an index, with CO2 having the index value of one. For all other GHGs, GWP is the number of times more warming caused by them relative to CO2. The term “carbon dioxide equivalent (CO2e)” is generally used for describing different GHGs in a common unit. For any quantity and type of GHG, CO2e signifies the amount of CO2, which would have the equivalent global warming impact. A quantity of GHG can be expressed as CO2e by multiplying the amount of GHG by its Global Warming Potential (GWP) (Brander and Davis, 2012).

From the above explanation, it can be seen that the net GHG emission of using alternative fuels, particularly biofuels for energy cannot be evaluated using the comparison of emissions at the point of combustion (i.e. emissions onboard ships). More appropriately, the evaluation should be performed based on the biogenic carbon flows together with any fossil GHG emission associated with the application of biofuels (IEA Bioenergy, 2019). Typically, it is known as “Life Cycle Assessment (LCA)”, a more complete evaluation of the GHG emissions associated with not only the use of the fuel, but also its production.

The specific fuel consumptions of different energy converters and fuels used are also reviewed from literatures (IMO, 2014; Lloyd’s Register and UCL, 2014). According to the United Nations Framework Convention on Climate Change (UNFCCC), the emission factor is defined as the average emission rate of a given GHG for a given source, relative to units of activity. The emission factors for different alternative fuels obtained from different sources have been consolidated from various literatures (Ruether, et al., 2005; IPCC, 2006; IMO, 2010; O’Connor, 2011; IREA, 2013; Urja, 2013; Bhandari, et al., 2014; Siregar, et al., 2015; Tran, 2016; Ricardo Energy & Environment, 2016; Bicer and Dincer, 2017; Li, et al., 2018). From the consolidated data and calculation, GHG emission per unit energy output from energy converters with various alternative fuels can be calculated and shown in Figure 5.

Figure 4 The global carbon cycle

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Well-to-Tank Tank-to-Propeller Well-to-Propeller (LCA)

GH

G E

mis

sion

(gC

O2e

/kW

h en

gine

out

put)

0

100

200

300

400

500

1,200

600

700

800

900

1,000

1,100

HFOMGO

LNG

Methan

ol (N

G)

Methan

ol (C

oal)

H 2 (N

G w/o

CCS)

H 2 (N

G w C

CS)

H 2 (C

oal w

/o CCS)

H 2 (C

oal w

CCS)

Bio-LN

G (AD)

Bio-LN

G (Lan

dfill)

Bio-meth

anol

Biodies

el (C

anola

)

Biodies

el (S

oybe

an)

Biodies

el (P

alm)

H 2 (W

indElec

t)

H 2 (N

uclea

rElec

t)

Biodies

el (A

lgae)

Biodies

el (U

CO)

NH 3 (B

iomas

s)

NH 3 (M

unici

pal W

aste)

NH 3 (W

indElec

t w S

CR)

NH 3 (H

ydrop

ower

w SCR)

NH 3 (N

uclea

r w S

CR)

-72%

-85%

-65%

-82%

-68%

-21%

-102%

-82%

-49%

-79%-91%

-75% -76%

-95%

-50%

-83%

-2%

-61%

-30%

-15%-15%-10% to-20%

No emission onboardfor H2 with FC

Containing Biogenic CarbonBiogenic CO2 emissions = emissions related to fast-domain carbon cycle.The CO2 emissions released from the combustion of biogenic carbon are not considered to contribute to climate change.

IMO

Bas

elin

ein

3rd

GH

G S

tudy

AlternativeFossil-based Fuel

Biofuels Non-bioRenewable H2

Nuclear

Note:1. H2 with fuel cell, other fuels with internal combustion engines2. AD = Anaerobic digestion, UCO = Used cooking oil, Elect = Electrolysis of water

Figure 5 for GHG emission from different alternative fuels

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6 Technologies and Alternative Fuel Cost

Of at least the same importance as technological and environmental aspects, the economic performance of alternative fuels plays a crucial role in their adoption. This section provides the review of the cost of technology, i.e. energy converters and fuel storage required for the application of alternative fuels as well as the cost of alternative fuels in comparison with the cost for the application of conventional marine fuels.

1 Energy converters: The indicative cost of energy converters required for various alternative fuels are provided in Figure 6. With the current status of technology development, the adoption of fuel cells is around four to six times more expensive than using internal combustion engines. However, it should be noted that cost of fuel cells is anticipated to be lower according to cost reduction aimed by several R&D teams around the world and learning curves of the application of fuel cells (Schoots, et al., 2010; Chick, et al., 2015; Sgroi, et al., 2016; Wei, et al., 2017).

2 Fuel storage: The costs of fuel storage tanks for conventional fuel oils (HFO, MDO and MGO), biodiesel, methanol, LNG and liquefied H2 are provided in Figure 7. It should be noted that the cost of other types of H2 storage is not discussed here since they are still in the fundamental development stages. As discussed previously in Section 3.2, the application of biodiesel can leverage the existing tanks used for the storage of conventional fuel oils with only some precautions. However, the storage of methanol is still more expensive than that of biodiesel due to the flammable characteristics of methanol safety measures and material compatibility. It can be seen that the storage tanks for cryogenic liquid are much higher than that of conventional marine fuels and other liquid alternative fuels, i.e. biodiesel and methanol (Horvath, et al., 2018). Especially liquefied hydrogen, the cost of its storage could be nine times more expensive than that of conventional fuels.

Fuel o

il

FAME

MeOH

LNG

Liquid

H 2

Ene

rgy

conv

erte

r cos

t (U

SD

/kW

h)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Figure 7 Fuel storage cost(Source: own drawn, with reference to data from Horvath, et al., 2018)

FO-ICE

FAME-IC

E

MeOH-IC

E

LNG-IC

E

H 2-IC

E

FO-FC

MeOH-F

C

LNG-F

CH 2

-FC

Ene

rgy

conv

erte

r cos

t (U

SD

/kW

)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Figure 6 Energy converter cost(Source: Horvath, et al., 2018; Dolan and Andersson, 2016; Ellis and Tanneberger, 2015;

Wärtsilä, 2018; Wei, et al., 2017; Schoots, et al., 2010)

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Cos

t (U

SD

/kW

h)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.40

0.45

0.50

1.00

4/1/

2009

7/20

/200

910

/16/

2009

1/19

/201

04/

2/20

107/

12/2

010

10/4

/201

01/

24/2

011

4/1/

2011

7/14

/201

19/

30/2

011

1/13

/201

23/

30/2

012

7/13

/201

29/

28/2

012

1/10

/201

33/

29/2

013

7/12

/201

310

/4/2

013

1/1/

2014

4/1/

2014

7/1/

2014

10/1

/201

41/

1/20

154/

1/20

157/

1/20

1510

/1/2

015

1/1/

2016

4/1/

2016

7/1/

2016

10/1

/201

61/

1/20

174/

1/20

177/

1/20

1710

/1/2

017

1/1/

2018

4/1/

2018

7/1/

2018

10/1

/201

8

7 Potential Pathway of Alternative Fuels Adoption

3 Fuel cost: For the application of alternative fuel onboard ships, its cost must be considered not only from its selling cost per tonne but also specific fuel consumption reflecting the efficiency of energy converter when using a particular fuel. The cost of alternative fuels shown in Figure 8 is calculated from the product of the specific fuel consumption (g fuel/ kWh output from the energy converters) and the fuel cost per tonne of each fuel. Among all options, using LNG is cheaper than using conventional fuel oils and other alternative fuels. The cost of methanol and biodiesel blended diesel (B20) is comparable with that of MGO. In comparison with the price of fossil-based diesel, biodiesel price is higher and this is mainly because of the feedstock cost. The feedstock, i.e. vegetable oil accounts for up to 80% of the total cost of production (Demirbas, 2009). Toward sustainability, second- and third-generation biomass (i.e. inedible oils and algal oil) will need to be considered as feedstocks to increase supply and reduce the cost of biodiesel. The application of ammonia will result in a cost of at least two times higher than that of MGO due to its high specific fuel consumption (600 g/kWh) (Reither, 2009).

Figure 8 Fuel cost per unit energy output from energy converters(Note: Conventional fuel oil: HFO, MDO, MGO, ULSFO; LNG: Japan, China,

Malaysia; Biodiesel: B100, B20; Methanol: Rotterdam, USA, China; Ammonia: Western Europe, Middle East, USA)

The emergence of new technology plays a significant role in the energy transition at a starting point. In contrast, technology maturity and cost of new technology & energy determine the speed of diffusion for the adoption by end-users. A successful new technology or energy source must provide the same service with superior or additional characteristics (i.e. reduction of atmospheric pollutants and GHG emissions). This section provides the potential pathways of alternative fuel adoption based on economic and environmental performances of alternative fuels. The fuel options include conventional fuel oils as well as alternative fuels, i.e. fossil-based fuels (LNG and methanol), biomass-based fuels (bio-LNG, biodiesel and bio-methanol) and non-bio renewable energy (hydrogen). It is important to note that none of the alternative fuels today possesses performances comparable with conventional fuels, except environmental performance. However, new technologies of alternative fuels throughout their value chains are evolving continuously due to R&D activities. With the aforementioned uncertainties, there is no attempt to derive the exact projection of the alternative fuel adoption in 2050. The main aim is to provide potential scenarios as guidance for further analysis of current limitations of using alternative fuels in the shipping industry and practical approaches to overcome (if any). Ultimately, this is to expedite the actual benefits of alternative fuels to be realised in years to come.

To derive potential pathways of alternative fuel adoption and GHG emission reduction, the study is performed with assumptions on different levels of technology evolution as elaborated below:

1 Fossil dominance: With minimal evolution of technologies, the industry still relies mainly on fossil fuels, including conventional fuel oils and LNG

2 No specific dominance with moderate evolution of technologies for advanced biofuels and hydrogen

3 Biofuel dominance with a strong evolution of biofuel technologies 4 Hydrogen dominance with a strong evolution of hydrogen technologies

With the projected growth of the world fleet in the future8 and the implementation of bunker levy (10%), the potential fuel mix for the shipping industry can be derived with the resulting CO2 emissions.

8 Based on RCP 2.6 SSP 4

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PATHWAY AND ENERGY MIX FUEL DEMAND AND CO2 EMISSIONS

Fossil dominance The minimal evolution of technologies results in:-

Energy mix:• In 2030: Conventional fuels (LSFO and

distillates) and LNG (fossil-based)• In 2050: Conventional fuels (LSFO and

distillates) and LNG (fossil-based)

CO2 emissions in 2050:• With the adoption of alternative fuels: 1,025

million tonnes• With the implementation of out-sector offset

(15% of the revenue from bunker levy): 829 million tonnes

• With the adoption of T&O measures (facilitating CO2 emission reduction of ~200 million tonnes), the shipping industry will not be able to meet the target in 2050 without out-sector offsetting.

Pathway 1 No Specific dominance The moderate evolution of technologies results in:-

Energy mix:• In 2030: Conventional fuels (LSFO and

distillates) and LNG (fossil-based)• In 2050: Conventional fuels (LSFO and

distillates), LNG (fossil-based), biodiesel and H2

CO2 emissions in 2050:• With the adoption of alternative fuels: 543

million tonnes• With the implementation of out-sector offset

(15% of the revenue from bunker levy): 493 million tonnes

• With the adoption of T&O measures (further reduce ~200 million tonnes) in conjunction with alternative fuels, the shipping industry will be able to meet the target in 2050 (without out-sector offset).

PATHWAY AND ENERGY MIX FUEL DEMAND AND CO2 EMISSIONS

Pathway 2 Biofuels dominance Strong evolution of biofuels technologies results in:-

Energy mix:• In 2030: Conventional fuels (LSFO and

distillates), LNG (fossil-based and biomass-based (70%:30%) and biodiesel

• In 2050: Conventional fuels (LSFO and distillates), LNG (fossil-based and biomass-based (50%:50%) and biodiesel

CO2 emissions in 2050:• With the adoption of alternative fuels: 503

million tonnes • With the adoption of alternative fuels and T&O

(facilitating CO2 emission reduction of ~200 million tonnes), the shipping industry will be able to meet the target in 2050 (without out-sector offset).

Pathway 3 Hydrogen dominance Strong evolution of hydrogen technologies results in:-

Energy mix:• In 2030: Conventional fuels (LSFO and

distillates) and LNG (fossil-based)• In 2050: Conventional fuels (LSFO and

distillates), LNG (fossil-based) and hydrogen

CO2 emissions in 2050:• Before out-sector offset: 390 million tonnes

The shipping industry will be able to meet the CO2 emission reduction target in 2050 (<450 million tonnes) either with or without T&O adoption and out-sector offset.

Ene

rgy

cons

umpt

ion

(EJ)

0

2

4

6

8

10

12

14

16

18

20

2030

54.1%

45.9%

2050

65.5%

34.5%

Ene

rgy

cons

umpt

ion

(EJ)

0

2

4

6

8

10

12

14

16

18

20

2030

54.2%

45.8%

2050

16.9%

34.6%

41.6%

6.9%

Ene

rgy

cons

umpt

ion

(EJ)

0

2

4

6

8

10

12

14

16

18

20

2030 2050

52.8%

47.2%

16.9%

14.3%

68.8%

Note: LSFO/Distillates, LNG (fossil-based), Biofuels (LNG, biodiesel, methanol), Hydrogen

Ene

rgy

cons

umpt

ion

(EJ)

0

2

4

6

8

10

12

14

16

18

20

2030 2050

53.3%

33%

13.7%

16.2%

22.7%

61.2%

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Availability of alternative fuels is one of the major components enabling full energy transition, leading to sustainability in terms of energy systems as well as meeting the climate action targets as specified under the Initial IMO GHG Strategy. Although the availability of alternative fuels depends on many components (including bunkering infrastructure, fuel standard and safe bunkering operation), the adequacy of alternative fuels is of chief importance. For the shipping sector, the adequacy of alternative fuels refers to the combination of availability of feedstocks and production capacity of alternative fuels with the consideration of competing use in other sectors. This section focuses on the analysis of the adequacy of alternative fuels based on their potential supply and demand in 2050. In addition to potential pathways, the analysis performed in the previous section also provides the demand for conventional marine fuels and alternative fuels in 2050. The requirement of the amount of a certain alternative fuel can be estimated based on their energy content and specific fuel oil consumption. The supply of alternative fuels is considered from the current production capacity globally and the availability of feedstock for each type of alternative fuels. Especially renewable feedstock, the term “technical potential” is used for the evaluation. It represents the estimation of achievable energy or fuel generation of a particular technology given system performance, topographic limitation, environmental and land-use constraints. The “technical potential” referred here represents the total global production potential and thus ignores competition between various

8 Adequacy of Alternative Fuels for Shipping Sector

sectors in the future use of such production potentials. From the technical potential of primary energy sources and feedstocks with the competing use in other sectors, the alternative fuel supply for the shipping sector can be estimated. Table 2 provides a comparison between the demand for alternative fuels in different pathways by the shipping industry and the potential supply.

For alternative fuels, including fossil-based methanol, fossil-based hydrogen, bio-LNG and bio-methanol, there will be sufficient supply if there is an expansion of production capacity. However, first-generation biodiesel produced from edible oils will not be an ultimate choice due to its insufficient supply of feedstock. If biodiesel will be a preferred choice in the future, third-generation biodiesel from microalgae has to be considered. However, it still requires R&D to enable technology maturity for its production.

It should be noted that there will be impacts of large-scale microalgae cultivation to the environment mainly due to changes in land use and consumption of natural resources. In conjunction with technologies, environmental policies could play a role in ensuring appropriate management to avoid any adverse effect to the environment (Usher, et al., 2014; Yin, et al., 2020).

9 An increase in vegetable oil production is limited by the requirement of land and changes in land use.

TYPE Conventional Fossil-based Biomass-based Non-bio renewable

LSFO/MGO LNG Methanol Bio-LNG Bio-methanol Biodiesel 1st & 2nd gen

Biodiesel3rd gen

Renewable Hydrogen

Production/ Technical potential globally for all industries (MT/year)

4,671 million 3,195 million tonnes Refer to Crude oil and natural gas

900 million tonnes >900 million tonnes Vegetable oil ~180 million tonnes, mainly for food (<20% for biodiesel

production)

Technical potential ~3,780 MT of biodiesel

Able to produce >1,260 million tonnes H2

Pat

hway

1

Demand 57 92 - - - 162 - 11

Adequacy Meeting 50.6 years of global demand

Meeting 52.6 years of global demand

- - - Not sufficient based on vegetable oil production9

~5% of technical potential

~1% of technical potential

Pat

hway

2

Demand 55 68 - 68 - 147 - -

Adequacy Same as Pathway 1 Same as Pathway 1 - ~1% of technical potential - Not sufficient based on vegetable oil production

<5% of technical potential

-

Pat

hway

3

Demand 55 42 - - - - - 80

Adequacy Same as Pathway 1 Same as Pathway 1 - - - - - <7% of technical potential

Requirement Current practice Requirement of bunkering infrastructure worldwide (cryogenic)

Requirement of bunkering infrastructure worldwide

(flammable liquid)

Same as fossil-based LNG

Requirement of bunkering infrastructure worldwide (flammable

liquid)

Applicable with existing infrastructure

Applicable with existing infrastructure

Requirement of R&D for microalgae harvesting and establishment of

bio-refinery

Requirement of the establishment of

renewable hydrogen supply chain and

bunkering infrastructure

Table 2 The demand for alternative fuels by shipping industry versus their supply in 2050Note: Adequacy: Yes, Yes, if a significant expansion of production capacity is realised,

Yes, but require R&D, No

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9 Will Alternative Fuels be Ready for Shipping Sector to Meet GHG Target in 2050?

it is important to note that there are two major challenges, i.e. the competitive use of bio-LNG in the power generation sector and the establishment of bio-LNG chain development despite the mature production technology.

• The readiest alternative fuel for actual application is shown to be biodiesel (FAME). This is due to its similar nature to that of conventional marine fuels (i.e. liquid, a similar range of viscosity and energy contents, etc.). Its application can leverage existing marine engine system, fuel storage and supply system as well as bunkering infrastructure. Since it is inflammable liquid, there is no additional precautionary measure required for safe operation and handling of biodiesel. It can be used as a drop-in fuel with conventional fuel oils. However, the 1st and the 2nd generation feedstock (i.e. edible vegetable oils and inedible oils) will not be sufficient to produce biodiesel to support the shipping industry. Furthermore, the demand of hydrotreated vegetable oil (HVO) for the aviation sector is likely to compete against the usage of feedstock for biodiesel production. Furthermore, an increase in the sustainable supply of vegetable oil is limited by the requirement of land and changes in land use. To support the sustainable usage of biodiesel in the shipping sector, there is a need for research and development for the 3rd generation feedstock (i.e. microalgae) for biodiesel production. Biodiesel produced from the 1st and the 2nd generation feedstocks can be applied during the transition period. Currently, there is a guideline for managing biodiesel-blended marine distillate based on ISO 8217 suggesting the biodiesel blending of up to 7% by volume. If the application of biodiesel becomes one of the selected measures for GHG emission reduction for the shipping industry, biodiesel standards with a higher percentage of biodiesel blending will need to be established, particularly cold flow properties and deterioration of biodiesel.

• Although hydrogen can provide zero-emission onboard ships, hydrogen produced from fossil fuels (coal and natural gas) without carbon capture technology is not the sustainable approach due to its minimal GHG emission reduction from a life cycle perspective. Instead, hydrogen produced from renewable energy is considered as an ideal option. The technical potential of worldwide renewable energy (including wind and solar energy) is around 2,300 EJ. After deduction from projected renewable consumption by other sectors (mainly power generation sector), there are more than 300 EJ surplus from global demand in 2050 and the mentioned amount of energy can be used for the production of hydrogen of >1,260 million tonnes. Based on the energy demand in 2050, this amount is much more than the hydrogen amount required to support the entire sector. However, the technology required for hydrogen application is not mature. There is a requirement in R&D in hydrogen storage, fuel cell for marine application and establishment of renewable hydrogen supply chain and bunkering infrastructure. For the shipping sector, the adoption of hydrogen as a fuel using fuel cell requires further study. The suggested areas include (i) the cradle-to-grave analysis in comparison with conventional marine fuels (or other alternative fuels) using an internal combustion engine, ii) safety practice for hydrogen, as well as iii) potential of NH3 as a form of hydrogen storage for the onboard application.

The lesson learnt from historical energy transitions reveals that there are four crucial steps enabling energy transition:

1 Emergence of new technology: A successful new technology or energy source must provide the same service with superior or “additional characteristics” (e.g. easier to operate, more flexible to use, higher efficiency or cleaner and greener).

2 Prototyping by end-users: A small group of consumers are willing to pay a premium for the energy services attached to the new technology.

3 Reduction in cost of technology and energy: Over time, economies of scale improve the technology and the price of the energy source, driving down the “cost of generating energy services”, making it competitive with the incumbent energy technology and source.

4 Full energy transition: A full energy transition is crucially governed by the price of the energy service.

From the investigation of alternative fuels potentially used to reduce GHG emission from the shipping industry, especially facilitating the industry to achieve IMO GHG emission reduction target in 2050, the study reveals that:

1 Within the scope of this study, none of the alternative fuels today possesses performances comparable with those of conventional fuels, except environmental performance. However, the industry will not be able to halve GHG emission in 2050 (based on GHG emission in 2008) by using fossil fuels (i.e. conventional fuel oils and fossil-based LNG) solely. If the industry still wants to continue their operation using fossil-based fuels (i.e. fuel oils and fossil-based LNG) solely, the industry will need to rely on market-based mechanisms and spending the revenues for out-sector offset to achieve the GHG emission reduction target in 2050. In other words, the adoption of either biofuels or renewable H2 is unavoidable, particularly for the target in 2050.

2 For short- and medium-term from now to 2030, fossil-based LNG, biodiesel from the 1st and the 2nd generation feedstocks as a drop-in fuel with conventional fuel oils and fossil-based methanol are anticipated to be potential measures contributing around 5-20% to onboard GHG emission reduction. Among these three energy sources, LNG could play a major role due to its adequacy (i.e. reliable supply) to support the shipping industry.

3 For long-term, especially for the industry to meet IMO GHG emission reduction target in 2050, bio-LNG as a drop-in fuel with fossil-based LNG, biodiesel from the 3rd generation feedstocks, biomethanol and hydrogen from non-bio renewable energy are anticipated to be potential measures to contribute to a significant GHG emission reduction. • Although fossil-based LNG is a clean fuel, it will not be able to play a significant role

in GHG emission reduction. For further GHG emission reduction, bio-LNG is revealed to be a good candidate for the industry as a drop-in biofuel using with LNG. Bio-LNG is mainly from the fourth-generation biomass feedstocks, i.e. waste and wastewater. The application of bio-LNG can leverage the mature technology of LNG with the establishment of LNG infrastructure and LNG-propulsion ships. From the technical potential of bio-LNG, it will be able to support the entire shipping industry. However,

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• Methanol has a great potential to be used as a form of hydrogen storage for onboard applications. The study reveals that while fossil-based methanol reduces onboard GHG emissions, it does not facilitate overall GHG emission reduction from a life cycle perspective. Instead of methanol produced from fossil fuels, the shipping industry should consider the application of biomethanol produced from sustainable feedstocks, including biomass and even recycled CO2. However, renewable methanol production is currently limited by the high investment cost of production facilities. For shipping sector, the adoption of methanol as a fuel requires further study on clean combustion of methanol, handling of by-products from its combustion, enhancement of bio-methanol production (small-scale modularized plant using biomass feedstock), as well as the availability of biomass feedstocks (regional & global) with higher productivity.

4 To enable the availability of alternative fuels at ports, the establishment of bunkering infrastructure is of importance. The requirement of storage facility at terminals and bunker ships depend on alternative fuel’s characteristics, such as physical state, boiling point, flashpoint and storage condition. Table 3 shows the characteristics of alternative fuels relating to storage condition, storage tank, material compatibility and indicative cost.

5 “Energy Efficiency Design Index” or EEDI is currently used as an indicator for the measurement of the amount of CO2 emitted by the ship per capacity mile (tonne-mile). There are various factors affecting EEDI and the factors directly involving the application of alternative fuels are as follows:

• Specific fuel consumption of engines (SFC): SFC represents the amount of fuel used for an engine in one hour expressed in g/kWh.

• Type of fuel used: The engines and other equipment operating using fuel that produces less CO2 will have lower EEDI value.

Depending on the type of fuel used, emission factors (EF) represent the amount of CO2

generated per mass of fuel burned expressed in the unit of gCO2/g Fuel. Currently, emission factors are derived from carbon content in the fuels used onboard ships (Trans, 2016). Before the adoption of alternative fuels, the emission factors, especially of biofuels and of fuels derived from non-bio renewable energy, will need to be discussed to reach an agreement on whether LCA would be considered. Harmonisation of emission factors might also be required for the fuels having the same properties but produced from different feedstock and production pathways.

Table 3 Storage of alternative fuels at terminal and bunker ships

Fuel Storage Fuel oil LNG and Bio-LNG

Biodiesel Methanol and Bio-methanol

Hydrogen

Physical state Liquid Cryogenic liquid Liquid Liquid Cryogenic liquid

Storage condition

Room temperature and

atmospheric pressure

< -163°C/ 0.1-1.8MPa

Room temperature and

atmospheric pressure

Room temperature/ 0.02-0.1MPa

-253°C/<0.5MPa

Storage tank and materials

Fixed roof cylindrical tank/

Carbon steel

Double-wall vacuum insulated pressure

tank/ Nickel-alloy steel, stainless steel and

aluminium

Similar to that of fuel oil storage

Double-wall fuel storage tank with

leak detector/ Low carbon 300 series stainless

steel

Super-insulated low pressure

tank/ Stainless steel alloy with high levels of

nickel

Gasket and seal materials

Fluoropolymer, fluoroelastomer,

urethane, or Buna-N-Vinyl

Nitrile, neoprene, flexible graphite and

polytetrafluoroethylene (PTFE)

Fluorosilicone, Teflon,

Polypropylene, polyethylene, or

Nylon

Nylon, neoprene, Teflon

Indium or pure graphite sealing

material

Indicative cost* Existing ~3 times Similar to Fuel oil

~1.5 times ~9 times

*In comparison with tanks for fuel oil storage

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Notes

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Maritime Energy & Sustainable Development (MESD)Centre of Excellence

50 Nanyang Avenue, Block N1-B1a-03, Singapore 639798T 6904 7389

[email protected]

coe.ntu.edu.sg/MESD_CoE