Cleaner fuels will dominate in 2020

LNG carrier under construction. Photo: Herry Lawford/flickr.com / CC BY

The preferred emission control options for ships trading in emission control areas (ECAs) after 2015 will be low-sulphur distillate fuel oil and liquefied natural gas (LNG), according to a study by DNV.

In its Shipping 2020 report, Det Norske Veritas (DNV) analyses several different scenarios, taking into account varying driving forces, such as the world economy and demand for seaborne transport; environmental regulations; trends in technology and energy efficiency; and fuel trends.

The model used by DNV predicts technology uptake in the world fleet¹ by simulating investment decisions of individual ship owners given different scenarios on regulatory requirements, world economic growth and fuel prices.
When the 0.1 per cent sulphur limit is enforced in the North American and northern European sulphur emission control areas in 2015, about 40 per cent of the world shipping fleet will be affected, and DNV expects that most vessels spending time inside these sulphur emission control areas will use distillate fuels, such as marine gas oil (MGO), to comply with the ECA sulphur limit.

On top of this, DNV concludes that if LNG prices remain competitive relative to fuel oil, LNG would become a cost-effective compliance option for ships spending more than 20–30 per cent of their sailing time inside the ECAs. Environmental advantages of using LNG as fuel include near to zero emissions of SO₂ and particulate matter (PM), an 80–90 per cent reduction in NOx emissions, and somewhat lower emissions of greenhouse gases.

Exhaust gas cleaning (scrubbers) for controlling emissions of sulphur dioxide (SO₂) is not expected to be a significant option before 2020. But after that date, when the global sulphur limit of 0.5 per cent is foreseen to enter into force, scrubbers may be fitted to thousands of ships.

Key findings of the study with relevance to ship emissions of air pollutants and greenhouse gases:

By 2020, the demand for marine distillates will increase to around 200–250 million tonnes per year. The current global annual MGO demand is about 30 million tonnes, expected to increase to 45–50 million tonnes/year in 2015 as result of the ECA sulphur standard. But the really big increase in distillate fuel demand will be in 2020, following the introduction of the global sulphur limit of 0.5 per cent. Consequently, annual ship consumption of high-sulphur heavy fuel oil (HFO) is expected to fall dramatically from about 290 million tonnes in 2019 to 80–110 million tonnes in 2020. DNV estimates that the demand for LNG as a ship fuel will be 8–33 million tonnes in 2020.

Around thirty per cent of newly built ships in 2020 will be equipped with engines capable of running on gas. In the coming eight years up to 2020, around 1,000 newly built ships, i.e. more than 1 in 10 new builds, will be delivered with either pure gas engines or dual-fuel engines, according to DNV. Dual-fuel engines have the flexibility to run on liquid fuel as well as on gas. Such an increase in LNG use by ships is however dependent on new investments in infrastructure for gas supply in ports and terminals.

Newly built ships in 2020 will emit 10–35 per cent less carbon dioxide (CO2) than today’s ships. The global Energy Efficiency Design Index (EEDI) regulation, adopted by the International Maritime Organization (IMO) last year, is driving more than half of this improvement. The remaining CO2 reduction is motivated by cost-efficiency alone and would be implemented regardless of the EEDI requirements.

Scrubbers will become a significant option after 2020. DNV expects that there will be only a limited uptake – a few hundred installations per year – of scrubbers up to 2020. The main reason for this is said to be that only a limited number of ships spend enough time in ECAs to justify the costs of retrofitting scrubbers. After the entry into force of the global 0.5 per cent sulphur limit in 2020, however, the picture changes and scrubbers may then be fitted to several thousands of ships. A delay in implementation of the 0.5 per cent sulphur limit until 2025 would also delay scrubber uptake.

By 2016, at least 30–40 per cent of newly built ships will be fitted with efficient nitrogen oxides (NOx) emission control. The Tier III NOx standards of the International Maritime Organization (IMO) require an 80-per-cent reduction in NOx emissions from new ships trading in NOx ECAs as from 2016 – a reduction that is expected to be met by techniques such as exhaust gas recirculation (EGR) or selective catalytic reduction (SCR). Ships propelled by LNG may achieve the Tier III standards without applying such techniques.

It is added that the full effect of the regulatory requirements on technology uptake will come only after 2020 when the IMO’s global sulphur limit and Phase 2 of the EEDI areimplemented. According to DNV, these two regulations are by far the strongest drivers and may lead to fundamental changes in the shipping industry.

Christer Ågren

¹ The DNV study has looked at the world fleet of around 50,000 ships, including all cargo-carrying ships but excluding passenger ships and service vessels.

Source: Shipping 2020 (August 2012). By Det Norske Veritas (DNV), Norway. www.dnv.com

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