What does the future hold for alternative fuels in shipping? 

By: Sam Jermy Specialist supply chain, procurement writer.

In recent years the shipping industry has recognised its need to significantly reduce fuel emissions, but is there one clear route towards achieving this goal?

Since the United Nations climate change conference in 2015, where the Paris Agreement was formed, there has been an increased urgency across governments and the transportation sector to reduce greenhouse gas emissions worldwide. This includes international container shipping and movement of other sea freight. Not least because environmental policies are no longer optional adoptions to increase CSR goals- the International Marine Organisation implemented its IMO 2020 regulation shortly before the pandemic took hold. Under the directive, ships must reduce sulphur in fuel oil to 0.50 percent mass on mass, down from a previous limit of 3.5 percent. In some designated emission control areas such as the Baltic Sea, the figure was already at a lower 0.10 percent rate to avoid pollution close to shore.

Currently, many ship owners are choosing to use Very Low Sulphur Fuel Oil. This is partly due to it being a “drop-in” fuel, meaning there is no additional cost to update engine capability or completely refit a vessel with new technology. However, there is growing acknowledgement that this is little more than a bridging strategy until it becomes clear there is a viable long-term sustainable alternative. VLSFO does immediately reduce emissions, but it is not a zero emissions alternative. There is also cost consideration to this option. There has been a run on the price of VLFSO in recent years, culminating in the cost breaking the $1,000 per metric tonne barrier in many ports worldwide during Q2 of 2022. Even before the Ukraine War and pandemic, VLFSO was a significantly more costly option than conventional legacy fuel. So what is the correct way forward for ship owners?

Even if we spent all of the R&D resources in the world, we cannot pursue electric, hydrogen, methanol and ammonia at the same time

The short answer to this would be, nobody quite knows yet. There is also understandable nervousness from ship owners about the possibility of ‘betting on a losing horse’ because the issue of stranded assets is very real in an era when transportation is undergoing profound technological change. Climate change demands innovation, but companies do not want sizeable assets becoming obsolete in a few short years- especially in such financially volatile markets. Even so, we are seeing more and more organisations start
to reach out and invest in alternative fuel options. 

Transition to zero emission options

One such firm is Norwegian transport group Torghatten Nord; it has recently signed a deal with PowerCell, a leading hydrogen fuel cell supplier in Europe. In a deal worth €19.2 million, the ferry operator will have two of its vessels electrically installed with 6 MW hydrogen fuel cells, saving 26,500 tonnes of carbon emissions per year. Final delivery will take place in the fourth quarter of 2024. This means the longest route in the country between Lofoten and Bodo in northern Norway will become emission-free, representing a major milestone for the shipping industry’s energy transition. This also represents a wider Norwegian government initiative that aims to increase zero emission ships across the nation.

Richard Berkling, CEO of PowerCell, said: “This is a ground-breaking project not just for PowerCell or Norway, but for the entire marine industry, and one that we are very happy and proud to be part of. Norway led the development in the introduction of liquefied natural gas in the marine industry and now the country is taking an important step to establish green hydrogen as a clean
energy source for our hard to abate sector. Our solutions are perfectly suited for demanding applications where operational reliability, high power density and compact format are important parameters.”

De-carbonisation of the shipping industry is critical and, being readily available today, LNG is a key part of the transition to lower-carbon marine fuels. This offering will not only grow local businesses but also encourage companies to embrace emissions reduction solutions

Large scale investment like this is supported by supranational initiatives such as the EU’s Green Deal and is providing some forward momentum to reach the Paris Agreement. Moreover, starting next year the maritime sector will be included in the EU Emissions Trading System, which is expected to increase the demand for hydrogen-powered solutions. Certainly when it comes to Norway, its government and Torghatten Nord expects to see heightened interest in hydrogen-electric solutions and is working to convert vessels on more of its 800 ferry lines, because they see green hydrogen as the most viable option to supply the power needed for the often long and demanding routes across Norway.

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