Liquefied natural gas may not be the ‘fuel of the future’ it purports to be and hydrogen may take on a more significant role in fuel choices in the future, according to a comprehensive modelling report from Lloyd’s Register.
LR Marine Fuels Trend Report
Lloyd’s Register’s latest crystal ball gazing report has modelled the fuel trends of the future and makes interesting reading: for example, it found that LNG may not be the ‘fix-all’ we have all come to believe; hydrogen will become more commonplace by 2030; and CO2 emissions will remain static.
In Global Marine Fuel Trends 2030, Lloyd’s Register, in collaboration with the Energy Institute at the University College London, has attempted to “explore the driving forces and conditions influencing the future marine fuel mix”. The study employs scenario planning methodologies using three scenarios – Status Quo, Global Commons and Competing Nations – that represent alternative futures for the world and shipping in 2030.The report examined the containership, bulk carrier/general cargo and tanker (crude and chemical/products) sectors, representing approximately 70% of the shipping industry’s fuel demand in 2007. On the fuel side, the report included fuels ranging from the liquid fuels used today (heavy fuel oil (HFO), marine diesel oil (MDO), and marine gas oil (MGO)) to their bio-alternatives (bio-diesel, straight vegetable oil) and from LNG and biogas to methanol and hydrogen (derived both from methane or wood biomass). The modelling also included a wide range of energy efficiency technologies and abatement solutions, including sulphur scrubbers and Selective Catalytic Reduction for NOx emissions abatement.LR has two words for its description of the marine fuel mix for containers, bulk carriers and tankers by 2030: “decreasingly conventional”. “HFO will still be very much around in 2030, but in different proportions for each scenario: 47% in Status Quo, to a higher 66% in Competing Nations and a 58% in Global Commons. A high share of HFO means a high uptake of emissions abatement technology.” The drop off in the share of HFO will be offset by a rise in low sulphur alternatives and by LNG, and hydrogen becomes an emerging shipping fuel by 2030 in the Global Commons scenario.
In shipping today, the alternative fuels debate has been dominated by the potential of LNG. But will there be other, potentially viable, options?
“We often talk about tipping points but what we anticipate is an evolutionary process rather than any instant shift,” said the report. “16 years is less than a ship’s lifetime and a dramatic overturn of the marine fuel landscape may not be realistic. On the other hand, it is also a matter of perspective: we may not see an immediate revolution but we will certainly experience some changing trends.” The findings on LNG are somewhat surprising given the current excitement surrounding the use of the gas in the shipping industry. “From a non-existent share of the marine market in 2010, LNG will have 5%-10% share in 20 years,” says LR. “We are not saying that LNG will not be the fuel of the future. But that seeing new ships built with LNG today (many of which in niche markets/short-sea shipping) and overturning the marine fuel landscape in less than a ship’s lifetime are two entirely different discussions.” Tom Boardley, marine director, Lloyd’s Register Group Limited, added: “In shipping today, the alternative fuels debate has been dominated by the potential of LNG. But will there be other, potentially viable, options? If we extrapolate the past experience (single engine combusting fossil fuel for the last century) to the future, then perhaps it is not a surprise to anticipate that ships built in 2030 may not be dramatically different than the ships of today. “If, however, this steady technological progress was to be, somehow, accelerated or overturned, then some amazing technology could be around the corner. How long will it take for a new technology/ fuel to be assimilated and to become ‘business as usual’ or even to replace the current mainstream options?” While LNG at least has a supporting role, methanol does not appear in the fuel mix in any considerable quantities by 2030. “It may be that this timeframe is too short or that it is not a cost-effective solution making it, again, appropriate for a niche market not represented by the four main ship types we examined,” said the report. While the fuel mix indicates a declining share of HFO, in 2030 the demand for HFO will be at least the same (In Status Quo) if not 23% higher (in Global Commons) compared with its 2010 levels. But, with the overall fuel demand doubling by 2030, other fuels will see a higher rate of growth to meet this demand.
The modelling employed for the report also examined shipping emissions and found that despite improvements in design and operational efficiency and current/future policies, CO2 emissions from shipping will not decrease in 2030. “Status Quo will see its emissions doubling, due to the increase in trade volume combined with the moderate carbon policy and the low uptake of low carbon fuels. Global Commons is following a similar trend but then decreasing post 2025, thanks to carbon policy and the uptake of Hydrogen. Competing nations will see the smallest growth in emissions. “Furthermore, in 2030, in Competing Nations and Status Quo, emissions remain on an upwards trajectory and the global fleet remains similar to the fleet in 2010 with the industry poorly positioned to weather any policy or macroeconomic storms in the period 2030-2050. “In contrast, in Global Commons the sector’s emissions peak (in 2025) and are starting a downwards trajectory that should assist in a more stable and sustainable long-term growth in shipping, trade growth and global economic development.” Read more Lloyd’s Register’s Global Marine Fuel Trends 2030 can be downloaded for free here