Future maritime fuels: LR sees two paths ahead
Written by Nick Blenkey
Image: LR
A report from the Lloyd’s Register Maritime Decarbonization Hub says that the shipping industry faces two alternative decarbonization paths with hydrogen-based fuels and biofuels vying for prominence. Its analysis of future maritime fuel choices shows that e-ammonia could emerge as the most highly adopted maritime fuel amongst hydrogen-based fuels, while liquefied bio-methane dominates amongst biofuels.
The report, “The Future of Maritime Fuels,” presents a review of a wide range of fuel mix projections and identifies two alternative paths that will steer shipping’s course – hydrogen-based fuels scenarios and biofuels scenarios. The report analyzes the dynamics of the energy supply system within these scenarios, accounting for the expected supply as well as demands from other sectors for these fuels.
In the hydrogen-based fuels scenarios, e-ammonia is projected to emerge as the most highly adopted future maritime fuel in the long-term, with an average share of 35% of the shipping fuels market by 2050. Such adoption yields significant energy demands, which will potentially drive the shipping industry to be the largest user of ammonia worldwide. It is projected that blue and e-ammonia will capture between 20% to 60% of total shipping fuels by 2050, with total consumption by shipping increasing on average from 0.79 exajoules (EJ) in 2030 to 6.06 EJ in 2050.
In the biofuels scenarios, liquefied bio-methane is projected to capture on average 34% of total shipping fuels by 2050, with total consumption by shipping increasing from 0.5 EJ in 2030 to 4.58 EJ in 2050. However, the expected supply of bio-methane needed for shipping is projected to vary between 0.3 EJ to 2 EJ during the time period under review, which will fall short of demand. This demonstrates that production will be insufficient to supply the total shipping demand for bio-methane.
The report also finds that methanol is projected to have a lower market share of the shipping fuels market than ammonia and bio-methane, which runs counter to the current trend of ordering dual-fuel methanol vessels in today’s shipping market. Combined bio- and e-methanol fuels are projected to capture on average a market share of 13.4% of total shipping fuels by 2050.
These fuel mix projections underscore the industry’s pivotal role in driving alternative fuel adoption while grappling with unique challenges in balancing demand, supply, and investment in alternative fuel pathways.
“Our scrutiny of fuel mix projections shows that investors and shipowners will face the dilemma of choosing from different alternative fuel pathways,” says Carlo Raucci, a decarbonization consultant at the LR Maritime Decarbonization Hub. “It is uncertain if one category of fuel will dominate the maritime fuel mix in the short and long-term, and investors face risks, such as stranded assets, which have limited the investment readiness level of low to zero-carbon fuels. Therefore, first movers’ initiatives such as green shipping corridors, will be pivotal in reducing the uncertainty by scoping out multi-sector fuel supply projections that could potentially help to aggregate demand and lower risks.”
Charles Haskell, director, LR Maritime Decarbonization Hub, said: “For meaningful progress, stakeholders across the maritime supply chain need to take on leadership in shaping alternative multi-fuel strategies and catalyse investment cases through strategic partnerships and collaborations. The uncertain dominance of a single fuel category underscores the importance of exploring the potential future interaction of the shipping industry with the broader energy demand system.”
Categories: Environment, News, Shipping
