The CE Delft study, commissioned by SEA\LNG, focuses on the 2030 and 2050 milestones towards decarbonisation and finds that liquefied biomethane (LBM) is scalable and globally available while availability of liquefied synthetic methane (LSM) will depend on the build-out of renewable electricity capacity; the issue of the fuels’ lifecycle emissions will be addressed in a further study.
The new study, authored by CE Delft’s Jasper Faber and Dagmar Nelissen and based on a review of the latest academic and industry literature, concludes that LBM and LSM are ‘likely to be commercially competitive’ and ‘can be used now’.
LBM is seen as scalable, with four main biomass streams available for its production: energy crops, agricultural residues, forestry products and residues and aquatic biomass.
The study notes that: ‘If the global maximum conceivable supply of biomass was to be converted into biomethane, and if all the biomethane became available for maritime shipping, it would significantly exceed the global total energy demand of the sector.’
The availability of LSM will depend on the build-out of renewable electricity capacity, however, and the study notes that ‘Current renewable electricity supplies are insufficient to produce enough LSM to power a significant share of the global shipping fleet’.
As things currently stand, by 2050, to decarbonise the maritime transport sector using LSM would require an estimated extra 25-30% of renewable electricity production, above that required to meet global targets consistent with the scenario of limiting global warming to 2oC.
However, the study does point out that the build-out of renewable electricity capacity will also be a key driver for the development of other synthetic fuels such as green hydrogen and ammonia.
The report also notes that LBM and LSM could already be used by LNG-fuelled vessels, and these fuels could also be transported, stored and bunker via the existing LNG supply infrastructure.
The study also carried out two cost comparisons. The first looked at 2020 bunker prices ($MMBtu), with VLSFO estimated at $19-$25 and fossil-based LNG at $14-$18 (both including a carbon mark-up). LBM was estimated at $29-$63 and LSM at $35-$145.
In this scenario fossil LNG would be the cheapest and LSM the most expensive option, and the report acknowledged that a carbon mark-up of between $50-100/t CO2 would not be sufficient to incentivise a switch from fossil LNG to LSM or LBM in 2030.
However, a 2050 carbon price ‘consistent with a well below [a] 2°C mitigation pathway’, can be expected to incentivise a switch from fossil LNG to LBM, at least if the 2050 price for fossil LNG is not below the 2030 price.
In a second cost comparison, the cost price at plant, in an ‘optimistic’ (lower range) scenario, was comparable for LBM, liquid green hydrogen and ammonia. Looking at a cost price at plant in a pessimistic scenario (upper range), it would be lowest for LBM and relatively high for liquid ammonia and LSM.
The report summary noted that: ‘Production costs of LBM and LSM need not be significantly higher and could be comparable to production costs of some other low- and zero-carbon fuels.
‘Thus: if costs of bunkering infrastructure and ships are comparable as well, LSM and LBM would be viable candidate fuels for a decarbonised shipping sector.’
In a Q&A session yesterday, following a SEA\LNG and CE Delft webinar outlining the scope and findings of the new report, Steve Esau, General Manager at SEA\LNG was asked why the report had not considered the GHG reduction potential of LBM and LSM.
In the new study, ‘We wanted to examine if they provided a credible pathway [to decarbonisation] and if so what was their availability – and how much was it likely to cost compared to competing zero emission fuels such as hydrogen and ammonia,’ said Esau.
‘If we look at the literature, [LBM and LSM] do have significant GHG savings but this was not the focus of the study and indeed it’s our plan to develop this work further to actually commission a further piece of analysis to look at life cycle emission of both of them.’
By taking into account renewable electricity supply, the report is making its assessment of the potential for LBM and LSM on a well-to-wake basis. CE Delft’s Jasper Faber noted that the text of the IMO’s initial GHG strategy does not actually specify a well-to-tank or tank-to-wake approach, and, indeed ‘this is a discussion we would have been having at the [now postponed] inter-sessional meetings at IMO.’
He noted that: ‘The assumption in this piece of work was that shipping would not be satisfied by shifting emissions to the land-based sector.
‘We think tank-to-wake emissions are untenable.’
Peter Keller, SEA\LNG Chairman, also agreed with this view. ‘Well-to-wake makes a lot of sense because you have to look at the whole process as a compendium,’ he commented.
In 2019, SEA\LNG commissioned report from thinkstep looking at the marine LNG's lifecyle GHG emissions.