Low-carbon fuels could power Europe’s bulk cargo-carrying ships

The results show that technologies support this transition but would increase total ownership costs (the purchase price of an asset plus the costs of operation). Public policy measures are needed to foster and accelerate the change.

Shipping plays a crucial role for international trade, transporting 72% of all freight via a global fleet of approximately 95 000 ships. However, the industry is almost exclusively powered by fossil fuels and has been described as ’difficult-to-decarbonise’¹. While various emission-reduction strategies have been implemented, many would require large-scale retrofits and none have yet brought the industry’s greenhouse gas emissions in line with climate targets. This suggests that more disruptive measures are required, especially as international shipping demand continues to grow.

While low-carbon fuels have the potential to significantly reduce emissions in the shipping industry, a deeper understanding of their technological and economic suitability is needed. Until recently, research tended to focus on assessing the impact of low-carbon fuels on the cargo-carrying capacity of individual ships. However, while evaluating the impact of low-carbon fuels on individual ships is relevant to ship owners and operators, assessing effects on entire fleets is more relevant to policymakers.

To fill this gap, a techno-economic analysis of climate-neutral fuels for ships carrying bulk cargo in Europe was conducted. To provide a fleet-level perspective, the researchers used tracking data from 3 974 ships covered by the EC’s Monitoring, Reporting and Verification  scheme to account for all voyages in 2018 carrying bulk cargo in the EEA and UK. The low-carbon fuels considered were hydrogen, ammonia, methane, methanol and diesel, all produced from renewable electricity.

First, the technological suitability of fuels (or attainment rate) was assessed by modelling whether the same ships could still carry the same cargo weight over the same distances compared to fossil fuels. The researchers considered changes to energy density of carriers and electricity demand for fuel production. Next, they assessed economic suitability by estimating the total cost of ownership (representing the complete cost through the ship’s entire lifecycle) associated with powering Europe’s fleet with low-carbon fuels.

The findings show that low-carbon fuels could substantially reduce emissions on ships that carry bulk cargo in Europe. Over 93% of transport work can be covered by all fuel options when a reduced cargo capacity of less than 3% is allowed for. This would require an additional 4–8% of Europe’s annual electricity consumption (from all sources, not only renewable) within the EEA and the UK, without relying on sustainable biomass, say the researchers. Of the fuels considered by the researchers, ammonia and methanol emerged as the most balanced (i.e. the balance between the study’s three indicators – attainment rate, electricity demand and total cost of ownership).

Powering shipping fleets with low-carbon fuels would bring economic costs. The researchers estimate it would increase the total cost of ownership by a factor of 2–6 in 2030, compared with continued use of fossil fuels². An industry shift to climate-neutral fuels would, therefore, have to be supported by public policies designed to even the playing field between (currently tax-exempted) fossil marine fuels and low-carbon options. An example of such a policy is the FuelEU Maritime Initiative, currently being proposed as part of the European Green Deal.

The analysis was limited to ships carrying bulk cargo in Europe, which currently account for 21% of operational emissions in European shipping. However, the researchers note that their techno-economic assessment provides a universal approach that could be expanded to other ship categories and regions. The detailed data provided in EU Monitoring, Reporting and Verification emission reports could serve as a valuable data source for Europe, say the researchers.

Footnotes

1. Davis, S. J. et al. (2018) Net-zero emissions energy systems. Science 360 (6396): 9793.
2. The researchers say that benchmarks for this vary depending on factors such as future electricity costs. For more information, see the following studies:

Horvath, S., Fasihi, M. and Breyer, C (2018) Techno-economic analysis of a decarbonized shipping sector: technology suggestions for a fleet in 2030 and 2040. Energy Convers. Manag, 164: 230–241.

Korberg, A. D., Brynolf, S., Grahn, M. and Skov, I. R. (2021) Techno-economic assessment of advanced fuels and propulsion systems in future fossil-free ships. Renew. Sustain. Energy Rev, 142: 110861.

Techno-economic Assessment of Zero-Carbon Fuels (Lloyd’s Register and UMAS, 2020); https://www.lr.org/en/insights/global-marine-trends-2030/techno-economic-assessment-of-zero-carbon-fuels/

Source

Stolz, B., Held, M. and Georges, G. and Boulouchos, K. (2022) Techno-economic analysis of renewable fuels for ships carrying bulk cargo in Europe. Nature Energy, 7: 203–212.

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“Science for Environment Policy”: European Commission DG Environment News Alert Service, edited by SCU, The University of the West of England, Bristol.

Notes on content:

The contents and views included in Science for Environment Policy are based on independent, peer reviewed research and do not necessarily reflect the position of the European Commission. Please note that this article is a summary of only one study. Other studies may come to other conclusions.