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Pathway for a green medium-range tanker towards 2050
Developing a concept for a “green” medium-range tanker
Aiming for net zero carbon by 2050, the project partners looked at the implications of the EU Emissions Trading System (ETS) and the FuelEU Maritime initiative. Then they modelled various fuel price and regulatory scenarios to identify the most cost-effective way to achieve compliance and determine when green fuel must be blended in, if at all. Key criteria included establishing a lifetime and compliance perspective and calculating the cost implications.
The vessel under study – methanol (fossil/tank to wake)
The JIP studied a highly efficient seventh-generation 50,000 dwt medium-range tanker design from HMD which is expected to be in demand in the coming years. Two alternatives are considered, one with methanol and one with LNG as fuel. On the methanol-powered vessel, the fuel tanks are arranged under deck in front of the deckhouse. The N2 generator room can be placed on the aft upper deck. Both versions of the vessel have a design speed of 14.5 knots and may be fitted with various energy- saving devices that can improve performance by about 2%. Optimized operation is supported by the Smartship Solution: CII management by fleet monitoring, analysis and diagnostics reporting; guidance for voyage planning; and optimized hull and propeller maintenance.
The vessel under study – LNG
An LNG fuel system occupies slightly less space below deck because the (smaller) fuel tank is installed on deck. Fuel oil tanks for the pilot fuel are needed for both versions. Independent of the fuel option, shore power is currently not a viable option for tankers since regulations are not comprehensive enough. Because of the fire hazard, the shore power connection would get in the way of loading and discharging operations. However, a wind-assisted propulsion system using rotor sail technology may be added to further improve fuel consumption. Alternatively, the vessel may be prepared at the newbuilding stage for later installation of rotor sails.
The EU Emissions Trading System may inflict high extra costs on shipping
In December 2022 the European Parliament, the EU Council and the Commission reached an inter-institutional agreement on the revision of the EU Emissions Trading System (ETS), a core element of the EU’s Fit For 55 package. Scheduled to enter into force in 2024 with a transition period until 2026, the ETS will increase the price of CO2 emissions from ships and cause significant extra costs for shipping. Designing ships for maximum efficiency is therefore of utmost importance to minimize the expected costs of emission certificates. Furthermore, both LNG and methanol might eventually be mixed with green drop-in fuel, or replaced by chemically identical green fuels, provided that sufficient quantities become available at realistic costs.
FuelEU Maritime will set requirements for well-to-wake emissions
In all of the scenarios shown, bio-fuels or e-fuels will have to be added progressively to the fossil fuel to meet the emissions target.
Assessment of the economic potential of fuel strategies
The project looked at various fuel price as well as regulatory scenarios for a typical operating profile. In particular, the study focused on a “minimum compliance” scenario assuming that the current IMO targets are upheld, where the vessel would transition from a C rating to a D rating;, and a more ambitious scenario with an accelerated decarbonization trajectory to achieve full decarbonization by 2050. These scenarios were assessed applying the DNV FuelPath Model, which evaluates the economic performance of design options in relation to fuel consumption over a vessel’s lifetime. In the end, the strictest regulation will determine what measures will have to be taken to ensure compliance.
A potential carbon intensity pathway based on the use of green drop-in fuels
A variety of fuel solutions can be applied to the ship and were examined in the project. Depending on the solution chosen, the switch from conventional to alternative drop-in fuel will have to be made sooner or later to comply with the emissions target and stay on the “minimum compliance” line. Over its lifetime the vessel will not reach the very low emissions level of the e-fuel line shown near the horizontal axis because it will reach the end of its service life before reaching the zero-emission deadline.
When will it be necessary to start adding green fuels?
If the current IMO decarbonization target remains unchanged, the ship design being studied by this JIP will be able to meet the minimum requirements until 2045 operating on fossil fuels only. However, if IMO decides to aim for full decarbonization by 2050, green fuels must be introduced in the late 2030s. VLSFO-fuelled ships will be the first to begin using green drop-in fuels in 2037. Methanol-fuelled ships (fossil based) have a small advantage, while LNG-powered ships can operate until 2040 before adding green fuel. Since green fuels are expected to be rather expensive, when green fuel must be added is a major cost factor. It should be noted that LNG- and methanol-burning ships still have the option to use Marine Gasoil if conditions allow it.
GHG reduction trajectory under the current IMO ambition
Under the current IMO carbon reduction ambition, the medium-range tanker under study (not necessarily other vessels) could operate until 2045 if using VLSFO, and until 2050 if operating with LNG. Fossil methanol would allow operation without a drop-in fuel until 2047.
GHG reduction trajectory under a stricter IMO ambition
If IMO decides in favour of a stricter decarbonization timeline, i.e. full decarbonization by 2050, the vessel will be able to operate on VLSFO until 2037, on LNG until 2040 and on fossil methanol until 2038.
Estimated fuel price ranges
The graph shows the approximate development of fossil fuel vs. green fuel prices. The JIP assumed that if the EU Emissions Trading Scheme is implemented, the CO2 price will add 30% to the fuel cost by 2025, and 50% by 2050. Green fuel prices are expected to drop as infrastructure and availability improves. Green fuels may become competitive with fossil fuels, accounting for the CO2 price, by the early 2040s.
Results of the modelling work: Investment cost and total cost of ownership
Capex: For methanol without DF auxiliary engines lower than LNG mainly due to simpler fuel tank technology; Fuel cost: LNG expected to be competitive again beyond 2025. In all cases there can be an extra carbon cost due to EU ETS and possibly future IMO regulations; Methanol can be attractive for methanol tankers. The TCO (total cost of ownership) graphs contain the capex graph and account for the two regulatory scenarios.
Conclusion
Key takeaways for the green medium-range tanker design: The seventh-generation HMD medium-range tanker can operate on VLSFO until the early 2040s under current IMO ambitions. Both LNG and methanol offer flexibility in selecting drop-in fuels with lower cost. Carbon prices will have a significant impact on fuel expenditure. If IMO requirements become stricter, however, LNG and methanol offer more options for compliance. The optimum solution will depend on area of operation, fuel availability and expected costs.