Ships are regularly required to take in fuels for their propulsion. This process is called bunkering. Bunkering takes place in ports either from on-site facilities to the ship, from ship to ship (via bunkering vessels) or from truck to ship. Low greenhouse gas (GHG) emission fuels, or alternative fuels, are transport fuels or energy vectors with a low well-to-wheel GHG emission balance compared to traditional fuels. As various ports have bunker facilities for traditional fuels, a transition to alternative fuels requires additional bunkering facilities or the conversion of existing facilities.
Legislation is already in place in the European Union to enable the transition to alternative fuels bunkering and drive the demand. The EU Renewable Energy Directive III revision requires fuel suppliers to provide alternative fuels, while the Alternative Fuels Infrastructure Regulation revision requires ports to make relevant bunkering infrastructure in ports available. The FuelEU Maritime regulation proposed by the European Commission (EC) will require ships to progressively switch to alternative fuels to meet increasingly stringent fuel-GHG-intensity targets. Any green fuel supplies in ports will need to be accompanied by mandates on ships to use those green fuels on the journeys.
Some bunkering infrastructure can be converted for alternative fuels:
A seeming contradiction, hydrogen requires higher storage volumes than oil fuels due to its low density. Storing hydrogen gas (GH2) requires high-pressure tanks, while storing liquid hydrogen (LH2) requires cryogenic temperatures in order to attain the boiling point of −252.9°C (Ryste and Wold, 2019). GH2 should be transferred to ships by direct compression or pressure differential, while LH2 should be bunkered using cryogenic pumps similar to those used for LNG bunkering. The direct exchange of container racks can be an alternative for hydrogen bunkering. None of these infrastructures has been developed yet (Dispert and Chase, 2021).
In order to select the priority positions for appropriate bunkering infrastructure, several factors should be considered:
Action plans for port development and bunkering infrastructure need to include measures that support the Sustainable Development Goals. The UNESCAP has developed a summary of actions needed to attain each Goal, taking into consideration the users’ wellbeing and biodiversity preservation (UNESCAP, 2020). Another TCAD measure on “Support on-shore power and electric charging facilities in ports” advocates for connecting vessels to electricity supply from the shore in order to reduce mainland GHG emissions and improve users’ wellbeing.
The share of shipping emissions in global anthropogenic emissions has increased from 2.76% in 2012 to 2.89% in 2018. Emissions are projected to increase from about 90% of 2008 emissions in 2018 to a maximum of 130% of 2008 emissions by 2050 for a range of plausible long-term economic and energy scenarios (IMO, 2020). If the shipping sector is to reach the IMO’s ambitions of at least a 50% reduction of absolute GHG emissions by 2050 compared to 2008 (IMO, 2018), fuel options for bunkering must be selected.
When bunkering infrastructure is put in place, a decrease in emissions can be achieved from various alternative fuels such as ethanol, hydrogen, ammonia or other biofuels. These effects have been documented in the TCAD’s “Adopting life-cycle evaluations for low carbon fuels in shipping” measure. Special attention needs to be given to LNG and ammonia usage as a bunker fuel. Over the 20-year and 100-year time horizons, methane is respectively 86 times and 36 times more potent a GHG than CO2 (Englert et al., 2021a). Methane has the potential to offer important reductions in GHG emissions from sulfur oxides (SOx), nitrogen oxides (NOx), and particulate matter (PM) (Englert et al., 2021a). However, methane leakages represent a considerable risk to increasing climate change, and every effort should be made to avoid such leaks (ibid.).
The capital expenditure (CAPEX) and cost of capital related to on-shore storage systems and bunker vessels account for up to 50% of bunkering suppliers’ non-fuel costs (IMO, 2020). Total bunkering infrastructure costs vary depending on the alternative fuel chosen. Some pilot projects estimate the costs for alternative bunkering infrastructure.
Ammonia and methanol: Given the technical challenges described in the overview, a medium-sized project for the production of these fuels would amount to USD 600 000 per year for methanol in comparison to USD 3.5 million per year for ammonia. This discrepancy can be explained on several levels (IMO, 2020):
Different cost-lowering mechanisms can be put in place to reduce spending and limit financial risks:
Hydrogen: Cost estimations are more complex for hydrogen due to the various infrastructure needs. Developing the required infrastructure for hydrogen could involve considerable investment risks. However, economies of scale can be achieved for small-scale generation when hydrogen is produced by ammonia cracking, generating some economies of costs (Cheddie, 2012). Public institutions could help stakeholders plan and budget for the development of adequate bunkering infrastructure, mitigating financial risk, strengthening public-private partnerships, and favouring cross-border initiatives and international co‑operation (IEA, 2021).
The Getting to Zero Coalition and the World Bank have identified many developed countries and 19 middle- and lower-income countries that have the potential to produce ammonia and hydrogen. The same countries could also develop bunkering facilities for the fuels. The opportunity of bunkering fuels could also lead to an opportunity to export alternative fuels as a commodity. (Englert et al., 2021b)
Timing and scale is of the utmost importance for the roll-out of bunkering facilities for alternative fuels. If not done in time, the lack of bunkering facilities could block the uptake of alternative fuels. However, there is also the risk that investments are made in bunkering facilities for fuels that shipping companies do not actually use.
Though bunkering infrastructure is key to a green transition of the shipping sector, it needs to be followed by a transition of the vessels. However, in 2020, two-thirds of oceangoing vessels such as container ships and bulk carriers still had at least ten years of service, as a marine freight vessel usually has a 20- to 35-year lifespan. Taking this into account, vessels’ propulsion systems need to be renewed by 2030 and reliable bunkering infrastructure in place accordingly if the shipping industry is to reach the IMO’s target by 2050 (IEA, 2020). In the case of the use of LNG as a temporary fuel before the uptake of ammonia or hydrogen, the fleet should be immediately retrofitted with no return on investments (Englert, Smith, 2021).
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Links
[1] https://www.itf-oecd.org/policy/support-bunkering-infrastructure-alternative-fuels
[2] https://www.itf-oecd.org/node/26469
[3] https://www.itf-oecd.org/node/26611
[4] https://www.itf-oecd.org/node/25183
[5] https://www.itf-oecd.org/node/25134