- MO and Regional Policies Key to Bridging Cost Gap for Clean Fuel Adoption in Shipping.
- Dutch Shipping Firm Amasus to Retrofit Vessel with Wind-Assisted Suction Sail.
- ABS Completes Safety Study on Ammonia-Fueled LNG Carrier.
The cost difference for shipping through a new study recently done between the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping and RMI, an institution previously known as Rocky Mountain Institute, has demonstrated the enormous price gap that exists between e-methanol and VLSFO, reports Engine.
Higher Cost of E-Methanol
The study found that the landed cost of e-methanol to the US markets is three to four times higher than that of VLSFO on an energy-equivalent basis. Significant reasons for this include high costs associated with green hydrogen and feedstocks of CO2 as required to produce e-methanol.
E-Methanol Consumption on Long-Distance Voyages
The estimated required e-methanol from Louisiana to Tokyo via the Panama Canal in a one-way for a bulk carrier amounts to approximately 1,400 mt. Comparing that, the same travel will require only 560 mt of VLSFO as VLSFO boasts an energy density about two and a half times that of methanol.
Comparison Cost of Bunkering
The comparison of ENGINE’s prices shows bunkering of e-methanol to be uneconomical for ship owners, in particular, at prevailing rates in the absence of any policy incentive. The highest e-methanol price up to $2,100/mt would prevail if its price is three times that of VLSFO at New Orleans. Considering 1,400 mt is required to finish the voyage, bunkering using e-methanol will be around $3 million. Bunkering of 560 mt VLSFO will be around $300,000.
This means that although e-methanol per metric ton has a price only 3-4 times that of VLSFO, the bunkering cost is up to 10 times higher because the energy content in the methanol is low.
Policy Interventions Needed to Close the Cost Gap
It will then be supplemented by both the international and regional regulations for bridging this large gap in costs. The mid-term measures that are being developed at the IMO may include imposing penalties on GHG emissions and setting targets for a reduction in GHG intensity in fuels, which should encourage shipowners to go for cleaner fuel options.
These policy interventions from the regional sphere of influence would be instrumental in augmenting demand and supply chains for cleaner fuels. A punitive charge on the Greenhouse gas emissions of Shipping operations and tax relief to enhance low-and zero-emitting fuels such as e-methanol for the same side of the value proposition of the industry may make a difference.
Other Industry Developments
In other news this week, Dutch shipping firm Amasus will retrofit a vessel with a suction sail next year. Bound4blue, a Spanish maker of wind-assisted propulsion systems, will install it.
The ABS classification society has completed a safety evaluation of ammonia dispersion onboard an ammonia-fuelled LNG carrier designed by Hanwha Ocean. The study confirmed that the system met ABS rules for ammonia toxicity and gas accumulation risks. The findings will aid Hanwha Ocean inflation, vent mast placement, gas release speeds, and locations improving venti and air intake to minimise risks during the design stage.
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Source: Engine
