Fuel choices for short sea shipping in the Baltic Sea

Kirsi Spoof-Tuomi,
Project Researcher,
University of Vaasa, School of Technology and Innovations, Energy Technology,
Finland

The climate crisis is one of the greatest environmental, economic and humanitarian challenges facing our society. There is a global understanding that significant reductions in greenhouse gas (GHG) emissions are needed to avoid the worst impacts of climate change, and various laws and regulations have already been implemented to combat global warming. In July 2021, the European Commission (EC) adopted an extensive legislative package, “Fit for 55,” to reduce the economy-wide GHG emissions by 55 % by 2030 compared to 1990 levels. This level of ambition for the next decade is expected to set Europe on a balanced pathway to becoming climate neutral by 2050 – an economy with net-zero GHG emissions.

Climate strategies will inevitably affect the design of maritime energy solutions. The main technology development and deployment must happen by 2030 to prepare for the more rapid change in 2030‒2050. Although internal combustion engines are still undergoing further improvements with, e.g., advances in combustion technologies, improving the energy efficiency of conventional technologies alone is not enough to achieve the targeted emission levels, and a switch from conventional marine fuels to low- and zero-carbon alternatives is imperative. For maritime stakeholders, the EC wants to see renewable and low-carbon fuels account for 6‒9 % of the bunker fuel mix by 2030 and 86‒88 % by 2050.

There is increasing focus on gas as an alternative to traditional marine fuels. So far, there is also a strong economic argument for LNG in shipping. In addition, numerous studies have shown a significant emission benefit of LNG in terms of NOx, SOx, and particulate emissions. However, progress towards decarbonization appears more difficult. This is because the overall GHG impacts of LNG are highly dependent on methane leakage rates within the LNG supply chain and especially on methane slip rates, i.e., unburned methane released from an engine’s combustion process during vessel operation. Approximately 2.5 % methane slip from fuel combustion may cancel out the decreased emissions of CO₂, leading to global warming potential equal to diesel fuel’s. It, therefore, appears that LNG does not offer the significant reductions in CO₂-equivalents needed to sustain EC’s GHG targets.

Indeed, reducing total annual GHG emissions from shipping in line with the EC’s target seems possible only by introducing fuels produced from renewable sources into the fuel palette. For example, liquefied bio-methane (LBG) exhibits, in principle, a neutral recirculation loop for CO₂, which is one of the main causes of global warming. Major CO₂ savings are based on the fact that producing bio-methane from organic waste material results in fuel that contain only biogenic carbon, and combustion of such fuel releases only biogenic CO₂, which is, unlike CO₂ from fossil fuels, not considered to contribute the climate change. The use of LBG produced from organic waste could reduce life cycle GHG emissions from short sea shipping by 60–75 % compared to marine diesel. It would also significantly reduce the impact of ship emissions on local air quality, an important feature for short sea vessels with regional operations near coasts and populated areas.

The major challenge facing LBG today is fuel availability in volumes needed for shipping. However, the production of LBG is steadily increasing to meet growing demand. For example, in November 2020, the Finnish gas major Gasum opened the first plant in Finland (in Turku) to produce LBG for transport, industry, and maritime sectors. In Sweden, the new LBG plant in Nymölla has just started, and the first delivery of liquefied biogas was in May 2021. Gasum and other industry players are also working on LBG projects not yet in the public domain.

Another main barrier to the broader deployment of LBG is the large price cap between LBG and fossil LNG. A major policy push is needed to address this barrier. Eliminating fossil fuel subsidies and implementing carbon pricing are necessary measures to increase the competitiveness of low-carbon renewable fuels. Moreover, specific blending mandates could guarantee the demand for renewable fuels and secure the necessary investments. Adequately high carbon prices, a predictable regulatory framework, and investment certainty are the key enablers in establishing a market for low-carbon marine fuels.

LNG distribution infrastructure can support the gradual shift towards LBG, as LBG can be easily and cost-effectively stored and distributed through precisely the same fuel infrastructure. Introduction of LBG on the market is also possible through blending with LNG. Hence, LNG could be seen as a part of a long-term solution for short sea shipping, providing a bridge technology to lower carbon shipping. Having infrastructure already in place enables a smooth transition to LBG in the long term.

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