By Gregory Dolan, Chief Executive Officer, Methanol Institute
The recent announcement that the United States, Denmark, and Norway, along with the Global Maritime Forum and the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping will lead a Zero-Emission Shipping Mission is significant on two related fronts.
First, the initiative calls for decarbonising the entire maritime value chain with ships capable of running on hydrogen-based fuels such as green hydrogen, green ammonia, green methanol, and advanced biofuels. Second, the announcement prioritises these as well-to-wake zero-emission marine fuels.
Alternative fuels are evolving at different time intervals – first LNG, now methanol, next ammonia, then hydrogen – and all will have some role to play. It is vital that shipping’s policy-makers include all fuels in its regulatory process and there needs to be a transparent and equal playing field so that implications, costs and practicalities of each are understood. Zero is a big number for any fuel or industrial process.
Reality requires that we assess methanol and other fuels on the basis of CO2 equivalent emissions across the total value chain and also consider fuel production and infrastructure, vessel storage, delivered prices and incentives.
These are the questions that will be foremost in operators’ minds. They need certainty of regulation, enforcement and benefit. The time to understand the interplay of these elements is short and running out. In advance of the IMO’s 7th Intersessional Working Group on Reduction of GHG Emissions from Ships held last autumn, the European Commission submitted a paper discussing whether maritime emissions should be measured from ‘tank-to-wake’ or from ‘well-to-wake.’
The EU argues – and now by extension so does the US administration – that by taking into account emissions related to the production cycle of fuels, a well-to-wake approach could enable a more complete picture of the environmental performance of alternative fuels. It could also incentivise the uptake of existing technologies with a lower GHG footprint than conventional fossil fuels and start reducing emissions immediately using existing technologies and “drop-in” alternative fuels. The well-to-wake measurement of emissions from marine fuel is a position that makes sense for the shipping industry to ensure the widest range of options are available, including low-carbon and net carbon neutral fuels like methanol. It cannot be in the interests of shipowners or their customers to have the burden of carbon emissions reduction placed on the shipping industry alone.
As with IMO2020, the energy industry should take a share of the burden in finding sustainable solutions that spread the investment risk and don’t slow down the progress towards reducing the total carbon impact of shipping. Owners can already reduce their ‘in sector’ carbon emissions using conventional low-carbon methanol. In renewable form, made from biomass/ biogas (bio-methanol) or by combining green hydrogen with CO2 from biogenic sources, unavoidable industrial flue gases or direct air capture (e-methanol), methanol would offer a carbon-neutral fuel that would enable the industry to sail more cleanly with MGO and MDO needed only as pilot fuel (just 3-5%).
Bio-methanol in particular can be cost-competitive to other biofuels today and offers an immediate renewable option. If methanol seems like an exotic solution then think again. This is the only alternative fuel other than LNG with operational experience, and does not share LNG’s issues with methane slip across its supply chain.
Methanol has three-to-five critical years’ of head start of experience building and applicability as an alternative fuel, enabling vessel operators to move forward with emissions reduction in a phased way at low cost to OPEX and CAPEX. Eleven Methanol powered ships are already in operation and another 11 are on order, with more selected for retrofits and newbuildings, including AP Moller-Maersk, which has announced that its first carbon neutral feeder-ship would be sailing by 2023. To support this, IMO member states should be working to frame the long-term energy challenge across the transportation supply chain so as to balance the impact of decarbonisation on shipping, its customers and the wider stakeholder community.