Shipping sector’s future fuel mix will be led by green ammonia - LR

Lloyd's Register (LR) predicted that shipping's green future will be a combination of hydrogen-based and biofuels and green ammonia will be the “most highly adopted maritime fuel in the long-term.”

PHOTO: Concept design of an ammonia-fuelled bunker tanker. Twitter of SeaTech Solution

A new report by classification society LR underscored industry consensus that the shipping sector's green transition will depend on a combination of low- and zero-emission fuels rather than one.

“Our scrutiny of fuel mix projections shows that investors and shipowners will face the dilemma of choosing from different alternative fuel pathways,” Carlo Raucci, decarbonisation consultant at LR Maritime Decarbonisation Hub said.

This mix will mainly consist of hydrogen-based fuels and bio-feedstock-based fuels, LR explained.

E-ammonia, or green ammonia, will dominate the hydrogen-based fuel market and make up for 35% of the total marine fuel consumption by 2050, according to Lloyd's Register. Green ammonia is produced by mixing green hydrogen with airborne nitrogen and emits no carbon dioxide (CO2).

“Such adoption yields significant energy demands, which will potentially drive the shipping industry to be the largest user of ammonia worldwide,” LR estimated.

Among biofuel sources, liquefied biomethane (LBM) is expected to dominate with 34% of total shipping fuel consumption by 2050. LBM or bio-LNG is a biofuel produced by processing organic wastes from households and industries, manure and sewage sludge.

The LR report, however, predicted fuel supply would not be sufficient to meet shipping sector's expected demand because of insufficient production.

Furthermore, the study predicted that methanol would have a lower market share than ammonia, “which runs counter to current trend of ordering dual-fuel methanol vessels in today’s shipping market,” the study found. “Combined bio- and e-methanol fuels are projected to capture on average a market share of 13.4% of total shipping fuels by 2050.”

This forecast is also contrary to industry predictions that e-methanol would be the most efficient and economical fuel to decarbonise shipping.

“It is uncertain if one category of fuel will dominate the maritime fuel mix in the short and long-term, and investors face risks, such as stranded assets, which have limited the investment readiness level of low to zero-carbon fuels,” Carlo Raucci said.

“Therefore, first movers’ initiatives such as green shipping corridors, will be pivotal in reducing the uncertainty by scoping out multi-sector fuel supply projections that could potentially help to aggregate demand and lower risks,” Raucci added.

“The uncertain dominance of a single fuel category underscores the importance of exploring the potential future interaction of the shipping industry with the broader energy demand system,” according to Charles Haskell, director of LR Maritime Decarbonisation Hub.

By Konica Bhatt

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