To judge by the headlines, the shipping industry is already set on ammonia as its future fuel of choice. Not so fast, says Gregory Dolan, chief executive of the Methanol Institute.
Post-COP26, post-MEPC 77, shipping faces an inevitable but uncomfortable truth; the journey to a low carbon future has still only just started. The intentions are clearly good, the statements are bold, concrete actions with deadlines attached rather fewer.
What seems likely is that the market – shipowners, charterers, financiers – will move further and faster than the regulators. Using the most recent ship efficiency regulations as the spur, they will make operating inefficient, polluting ships unattractive enough to move the needle.
A focus on energy efficiency is welcome but ignores a central reality in the decarbonisation debate; the future fuels the regulators appear to be banking on are just that, beyond the horizon. But there are fuels here now and can be used to make a tangible difference to carbon emissions in the short and medium term.
There are now 55 dual fuel two stroke methanol engines on the water or on order
To read the maritime headlines is to believe that shipping’s ‘White Knight’ is already here in the form of ammonia. True, ammonia has no carbon emissions when combusted, but there is a problem. Though the technology is emerging; a lack of supply of conventional, let alone renewable product means ammonia will need a support act.
If, as the influential academics would have us believe, there are doubts over the long term viability of LNG due to its contribution to methane emissions, then by extension the same is true for Ammonia, given its harmful emissions of nitrous oxide.
Today or tomorrow?
It is frustrating that when scholarly research is published, the focus tends to be on the future (ammonia) rather than now (methanol). Ammonia may indeed prove to be the industry’s long-term fuel of choice but for now there is only implied demand. There is no supply chain, no engines, no regulation and no business model.
Methanol has a value proposition today. There are now 55 dual fuel two stroke methanol engines on the water or on order and more orders are imminent. Four stroke units are set to follow and all main engine makers are extending their product lines to include methanol. Using methanol provides an immediate benefits by reducing emissions of SOx by 99%, particulate matter by 95%, and NOx by 80% with the use of water injection in MAN Energy Solutions’ third generation dual fuel engines.
Only methanol can stem the tide of maritime emissions in the near-term
The recent position paper from the Maersk McKinney Moller Centre for Zero Carbon Shipping, Fuel Option Scenarios, noted that even though the analysis of different fuel pathways may be largely a technoeconomic assessment, progress towards decarbonisation will only be possible by addressing the challenges associated with each fuel.
The McKinney Moller paper concludes that ammonia will play a central role in shipping’s future, first from carbon capture and later from renewable electricity and assuming its associated safety risks are mitigated. None of these will occur soon or are guaranteed.
It finds that should ammonia fail to overcome the barriers to its implementation, e-methanol (from renewable electricity) is the second least-costly alternative maritime e-fuel. All things considered the report says, e-methanol is likely the more cost-effective option for a larger portion of the fleet.
The recent IRENA report A Pathway to Decarbonise the Shipping Sector by 2050, also finds that the renewable fuels most suited to international shipping are methanol and ammonia primarily in the form of advanced biofuels and e-fuels.
Bio-methanol and renewable e-methanol require little to no engine modification and can provide significant carbon emission reductions in comparison to conventional fuels, IRENA says. Renewable e-methanol is of particular interest in the shipping sector, it says, but the key constraint on the production of renewable e-methanol is the availability and cost of captured carbon.
From the shipowner’s perspective, flexibility is crucial for minimising financial risk and disruption of operations. One of Europe’s largest independent research organisations, SINTEF Ocean found that e-methanol comes at lowest additional CAPEX for vessel operators. The e-ammonia and e-methanol pathways, while requiring higher initial investment offer the highest fuel choice flexibility both in medium and long term.
Researchers at Chalmers University of Technology, Sweden, recently looked at the total cost of ownership for large ferries operating on biofuels, bio-electrofuels, and e-fuels, in terms of fuel production, fuel infrastructure, ship CAPEX, energy storage, and loss of cargo space. The study found that renewable bio-methanol and e-methanol show the lowest cost for each fuel category, beating out biodiesel, bioDME, bioLNG, e-diesel, ammonia and hydrogen.
The longer term
A study by the Getting to Zero Coalition found that the Green Corridors framework announced at COP26 will leverage the conditions for accelerated investment by allowing policy makers to blend a combination of regulatory measures, financial incentives and safety regulations.
The Methanol Institute believes such an initiative creates the case for bio-methanol and e-methanol and begins the process of moving towards low carbon and net carbon neutral fuels.
The weight of evidence suggests that sustainable, renewable ammonia and methanol are the key intermediate and long-term fuels for the shipping industry, but only methanol can stem the tide of maritime emissions in the near-term. The volumes of renewable methanol product set to come onstream in the next decade can help the industry understand the policy, regulation and economics of the net zero carbon economy while the millions of tonnes of renewable ammonia required can be planned for and produced.
We’ve never assumed that net zero shipping is a one fuel solution; markets like choice and carbon is a market too. But when looking at how to make progress quickly beyond simple energy efficiency, the shipping industry needs to swap aspirational appeal for reality. Methanol is a bird in the hand.