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Call for regulators to step up on fuels conundrum

Panellists on the Lloyd’s List future fuels webinar hear that several fuels were in contention, although none stands out. Regulators must offer guidance or the industry will continue to drift

Much needs to be done to understand the carbon footprint of fuels, including liquefied natural gas, methanol, hydrogen, ammonia, biofuel, electric vessels or batteries

BUYERS and suppliers will have to collaborate if a solution to the future fuels conundrum is to be found, according to expert opinion.

DNV GL business development manager Christos Chryssakis told the Lloyd’s List Future Fuels webinar that although delays to the search for fuels to meet the requirement for decarbonisation were inevitable, “zero carbon won’t be delayed and might even be accelerated”.

Chris Chatterton, chief operations officer at the Methanol Institute, said the overarching theme of investments in cleaner fuels would continue, and in the meantime, many organisations would become more energy-efficient and focused.

Both Mr Chatterton and International Bunker Industry Association director Unni Einemo, said the fall-out from the International Maritime Organization’s sulphur cap, which took effect on January 1, had been limited.

“The supply industry has done itself proud over IMO 2020,” said Ms Einemo. A lack of availability had been “much less than anticipated”. 

She said what made the introduction of the sulphur rules unique was the very clear cut-off date. The move towards decarbonisation would not be so time constrained.

All three panellists confirmed that the solution that plays out up to 2030, and ultimately to 2050, would involve more than a single fuel. It will be years before the industry moves away from fossil fuels. According to Mr Chryssakis this was partly because regulators have yet to provide that incentive.

“Although liquefied natural gas and liquefied petroleum gas are now available, I do not see any alternatives in volume and at reasonable prices [to fossil fuels] in the next five or 10 years,” he said.

And while many owners are thinking about LNG, the final decision will be influenced by ship type and requirements.

Batteries will only be used on small ships operating over short distances, electric solutions only when there is frequent plugging-in. Mr Chryssakis did not believe methanol and biofuel would be available in sufficient quantities.

Mr Chatterton said that regulations are set to tighten within the next five years, and in the meantime much effort would be focused on design efficiencies, carbon intensity, and infrastructure investment.

Methanol has been used on Stena Line’s Germanica since January 2015. At the time, Stena had trialled the clear, colourless biodegradable fuel because it had the capacity to reduce SOx emissions by about 99%, NOx by 60%, and CO2 by 25% compared with traditional fuels.

Methanol is now available at more than 100 ports worldwide, it can be easily delivered to the ship, and conversion does not require huge capital expense. It even has a price advantage over marine gasoil.

Nevertheless, the take-up of methanol has been slow because there has been no incentive. Stena trialled methanol in response to the creation of a Baltic Sea ECA zone because conversion to methanol was cheaper than a conversion to LNG, said Ms Einemo, however further conversions are unlikely by that operator.

Incentive is also missing to convert to LNG, for which the huge cost of infrastructure is a concern. The global sulphur cap did prompt owners to investigate LNG, and some big-name operators went for it, however the big change from small ships to ocean-going vessels has not been great.

Nor were panellists enthused about hydrogen, thought by Mr Chryssakis to be “no clear solution”, one which, Mr Chatterton agreed, “has its challenges”.

There is no single future fuels solution, nor is there as yet any consensus as to which fuels will be on the final short-list. However, there was consensus among panellists on the need for new vessels to be readied for “fuel flexibility”. Operators of existing ships would need to explore “drop-in fuels”, possibly biofuel, which would offer availability and ease of conversion.

Panellists also agreed that more work is required on the “well-to-wake” discussion, which will make its way back to the IMO.

“In future,” added Mr Chryssakis, “we will need to understand where our fuel comes from and how it is produced. We will need to know the cost of the infrastructure. Maybe,” he suggested, “a certificate to show the carbon footprint of the fuel you use.”

The Methanol Institute currently only looks at emissions on board, Mr Chatterton acknowledged, although he said studies had intimated that the biofuel pathway is more expensive than the renewable power pathway.

The industry must have “clear regulation to guide us,” said Mr Chryssakis, “otherwise we’ll stay at the exploratory phase”.

Missed the webinar, or just need a refresher on what was discussed? It’s now available to listen on demand. Pre-registered people can listen to it here, otherwise register here first and you will be emailed a link.

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