Low-carbon fuel life-cycle evaluation for shipping

Shipping can use several fuels types, and the industry is exploring alternatives to conventional heavy fuels that can help the sector decarbonise. The assessment method of fuels significantly impacts whether they are considered “low carbon”. Life-cycle assessment accounts for greenhouse gas (GHG) emissions at all stages of the fuels’ production and consumption, including the emissions of the energy used to produce and deliver the fuel, in addition to the direct emissions from the vehicle or vessel and end-of-life disposal.

Comparing fuels based solely on direct CO2 emissions - currently the norm - can lead to misleading conclusions about the climate impacts of fuels. Fuels such as Liquefied Natural Gas (LNG) or methanol produced using fossil fuels have lower direct CO2 emissions than conventional maritime fuel. However, a life-cycle-based evaluation that includes other greenhouse gases like methane and upstream fuel production emissions suggests their GHG benefits are marginal at best. 

Equally, the life-cycle approach highlights that several new alternatives can only be considered low-carbon if they are produced sustainably. Some new fuels, if produced using fossil-fuels or fossil-based energy, are in fact worse than what they are intended to replace. Fuels that can have low life-cycle emissions when produced sustainably are: biofuels, hydrogen, synthetic hydrocarbons, ammonia and electricity.

Biofuels are primarily produced from biomass. They can be blended into petroleum-based shipping fuels and used in existing infrastructure. There are three main production pathways: biochemical, oleochemical/lipid, and thermochemical (see ITF, 2020 for a detailed explanation).

Hydrogen has potential appeal for shipping, either as hydrogen fuel cells to power electric motors or as a liquid fuel in combustion engines (alone or in a dual fuel combination). However, hydrogen produced from fossil fuels has a significant upstream GHG footprint. So on a life-cycle basis, hydrogen can only be considered low-carbon if generated using more sustainable processes. Water electrolysis is the most promising of these as, if renewable electricity is used, almost all GHG could be eliminated from the process. But it is more expensive. Applying carbon capture and storage (CCS) to fossil fuel-based hydrogen can reduce the life-cycle emission intensity by 60-70%. Methane pyrolysis (anaerobic decomposition of natural gas) is in the early stages of investigation, but could theoretically reduce GHG emissions by 90% compared to conventional methane reformation based hydrogen.

Synthetic hydrocarbons (or electrofuels where the hydrogen is derived from the electrolysis of water) are produced by combining hydrogen with carbon building blocks. They can be produced as a gaseous or liquid and blended with petroleum-based fuels or used in substitution. The carbon footprint inherent in producing the hydrogen and carbon elements used dictates the carbon intensity of the resulting synthetic fuel. These fuels become more attractive as the cost of renewable electricity used in production falls.

Ammonia, like hydrogen, has zero direct CO2 emissions. It has some advantages over hydrogen, including easier storage, greater energy density, and it is not explosive. Safety protections are needed, however, as it is toxic. Ammonia is also more difficult to ignite than pure hydrogen. It needs to be used in conjunction with a starter (pilot) fuel. If a fossil fuel (such as diesel) is used, it reduces the emission-reduction potential of ammonia. However, sustainably produced hydrogen, biofuels or synthetic fuels could be used as the starter fuel to keep emissions low. Whichever method of hydrogen production is used impacts the life-cycle emissions of the ammonia and the energy efficiency of the ammonia production itself. Currently, most ammonia is produced using fossil fuel-based hydrogen.

Electricity also has zero direct emissions. The way electricity is generated impacts its life-cycle emissions. For it to be considered low-carbon, it must be produced from low carbon energy sources. Life-cycle emissions from the use of electricity in ships are also affected by batteries and other component manufacture emissions, which must be reduced.