Page 5 - EurOil Week 38

EurOil COMMENTARY EurOil

Source: DNV GL.

cost would be significant for shipowners trading will win out in the end. It sees ammonia and
on the spot market, as overall operating costs for methanol dominating the market by 2050. But
an Aframax carrier are approximately $6,700 per hydrogen is not expected to see much use at all.
day. In its Maritime Forecast to 2050, published
What is uncertain is whether the ETS will on September 22, DNV GL conceded that it was
apply to a whole voyage to the EU or just the part difficult to identify clear winners among the
of it in European waters. Uncertainty about how many fuel options shipowners face. However, it
the emissions trading system will be applied to sees fossil fuel-based LNG gaining a significant
shipping has contributed to weaker vessel orders, market share until regulations become stricter in
Clarksons said. 2030 or 2040. By 2050, e-ammonia, blue ammo-
“A wait-and-see attitude has developed in nia and bio-methanol will emerge as the victors.
recent years but the Commission’s plans seem However, DNV GL said there would be
likely to accelerate decision making” on which relatively limited uptake of hydrogen as a ship
propulsion technologies and fuels are adopted, fuel, because of both the fuel cost and the cost
it said. of developing engine and fuel systems. But
hydrogen will have a use in producing other
Future fuels carbon-neutral fuels such as e-ammonia, blue
Shipowners have chosen various ways of meet- ammonia and e-methanol.
ing the new IMO requirements. Some have “The grand challenge of our time is finding
invested in scrubbers, which strip sulphur parti- a pathway towards decarbonisation,” DNV GL
cles from ships’ exhaust smoke, while others have CEO Knut Orbeck-Nilssen said in a statement.
switched from high-sulphur fuel oil (HSFO) to “Reducing GHG emissions is rapidly becom-
low-sulphur fuel oil (LSFO). ing the defining decision-making factor for the
An alternative is using LNG as fuel, whose future of the shipping industry. The pressure to
advocates say not only easily clears IMO stand- act decisively is mounting. Perfect is the enemy
ards but is also cost-competitive. The fuel emits of good, and so we mustn’t wait for an ideal solu-
virtually no SOX or particulate matter, and 85% tion to arrive and risk making no progress at all.”
less NOX than HSFO. It also produces 25% less This said, “picking the wrong solution can
CO2. lead to a significant competitive disadvantage,”
Hydrogen, methanol and ammonia offer the report’s authors warned. “Planning for fuel
other alternatives, especially when they are pro- flexibility could ease the transition and minimise
duced using renewable energy. But they are yet to the risk of investing in stranded assets.”
be proved as commercially viable, available and DNV GL added that the uptake of car-
scalable. bon-neutral fuels will not be possible without
Clarksons sees LNG serving as only a “transi- a “clear and robust regulatory framework,”
tion fuel” over the next decade, while ammonia which is not yet in place. “To drive the develop-
and hydrogen will become increasingly the “real- ment of new technologies, the framework must
istic” options further ahead. ensure global availability of large volumes of
New research by classification society DNV carbon-neutral fuels; enable their safe use; and
GL agrees that while LNG will play a large role in incentivise their uptake while retaining a lev-
reaching nearer-term goals, cleaner alternatives el-playing field,” the report said. ™

Week 38 24•September•2020 www. NEWSBASE .com P5