Documented for study LNG as Ship Fuel - transition phase

Brief of use of LNG as fuel

1. LNG as Ship Fuel By Professor Alkis John Corres

2. Once upon a time there was a planet which was doing rather well..

3. ..until it became evident that atmospheric temperatures were on the rise to an extent that the United Nations became concerned. The scientific community swiftly discovered the culprit: Greenhouse gases have are having a deleterious effect on ozone layers, and these depleted layers allow sunlight to reach the surface of the earth unfiltered. As this planet has just one atmosphere, but 186 or so sovereign states, it became evident there was need for international cooperation. Nice term “international cooperation’’ but it is so very difficult to get global agreement.

4. One can get an idea about the sources of CO2 from the following graph. One can also see that even if CO2 emissions from shipping were zeroed we would still be left with over 95% of the problem.

5. Global warming has also other sources which together account for 1/4 th of the total of greenhouse gas emissions. The IMO surprisingly has only targeted fluorocarbons with a ban and sulphur emissions (which do not have any significant effect on global warming).

6. CO 2 -25% Climate LNG used as fuel compared to oil : Some reduction in CO2, big reductions in NOx, SOx and in -life reducing- particles. NOx -90% Health/ vegetation SO 2 - 100% Health/ vegetation Soot/particles -100% Health/ vegetation Surprisingly, there seems to be a widespread perception that LNG use will rid us from the evils of CO2 and global warming. Sadly, this is far from the case.

7. This is not to say that widespread use of LNG would not be multiply beneficial to human life and vegetation as.. It contains no sulphur , so acid rain will be less of a problem in SECAs and elsewhere, It has no NOx emissions, It contains no particles. However, there are presently very few ships which can burn LNG and.. conversions to dual fuel are very expensive. By establishing the Special Emissions Control Areas the IMO has done almost nothing in way of global warming, it has only addressed an outstanding issue from the 1990s concerning the problem of acid rain in some regions.

8. With due respect I beg to differ. This acid rain is clearly a fuel issue and not a fleet conversion issue. All one needs to do to reduce acid rain is to provide the fleet in SECAs with Low Sulphur Fuel Oil in sufficient quantities. This solution requires only minor engine modifications and it is readily applicable. The difference in scale and cost of application is enormous. Global warming and acid rain are two different environmental issues and until a common solution is in sight these should be examined separately. Despite protests from some of its members the EU Commission’s European Sustainable Shipping Forum has concluded that the problem in the SECAs is the fleet which would need to be converted by fitting filters (scrubbers) or to the use of alternative fuels.

9. To illustrate this let us suppose for a moment Europe would consider converting the entire short sea fleet of around 10,000 ships to LNG. How long does it take to convert and build new LNG burning short sea fleets ? Not less than, 20 -2 5 years. What will happen to conventional ships? Most of them will be scrapped, the youngest will be sold/converted. What would be the cost of a conversion/renewal program? Off the cuff, between 150 and 200 billion euro.

10. If we briefly follow this scenario we can make some further thoughts. Assuming there are financing facilities and reasonable employment expectations for the new ships, one might see an exclusively LNG powered short sea fleet in about 20 -25 years. That would imply building something like 4 0-500 ships per year on average, with conversions in the beginning and all- new ships subsequently. EU shipyards c ould spring back to life within 2-3 years and the use of the Corres / Psaraftis PlatformShips ( common ship sections ) production method can treble each yard’s annual output. The EU could have an extensive LNG network in about 10 years and by then there c ould be around 3,000 LNG burning ships. The dream of D G Environment about an all – LNG short sea fleet could be realized circa 2040 but not earlier. The question is how feasible is such a grand plan. Under present economic and political conditions it appears rather improbable.

11. Therefore, the international scene is as follows. As one can see retrofitted ships to scrubbers and LNG are exempt from burning low sulphur fuels (provided of course equivalent, or better, results are obtained For the moment we have four SECAs, two in East and West coasts of the US including Canada, and another two in Europe in the North Sea and the Baltic Sea. In these areas the maximum allowed sulphur content in fuel is 0.01%,

12. IMO has decided to apply a global cap of 0.5% on the sulphur content by 2020 (subject to a reconfirmation in 2018), otherwise by 2025. Until this happens the sulphur content outside SECAs remains at 3.5%.

13. Environmental policies are generally complex and expensive to apply. While the attention of the international community is dealing with sulphur in the fuel the dominant problem of global warming takes second stage. Behind the long delays in the adoption of limits to the sulphur content in fuels has been the strong resistance by the oil refining industry as the production of low sulphur fuel, not only is costly, but it messes up the economics of distillation.

14. If the consequences of following the logic of the EU Commission – i.e. converting the entire fleet - seem dramatic, the effects of a global cap by 2020 or five years later, would be devastating. None in the right wits believes that the entire world fleet of 100,000 vessels can be retrofitted to scrubber and LNG technology by 2025. If these ships are not retrofitted, it means they will have to burn low sulphur fuel oil which at the moment is 50% more expensive. This will impact East – West trade significantly in terms of transit cost. Carbon footprint will also impact cost as soon as the MRV turns into emission charges . What one can realistically expect is a number of new buildings to be constructed for dual fuel (LNG/Fuel Oil) and perhaps a proportion of the existing fleet to retrofit at high cost.

15. A few words about the LNG bunkering network. EU legislation is in place mandating all major ports to be ready to provide bunkering facilities to LNG –fuelled ships by 2020. To my knowledge very little is done in that direction elsewhere bar the US but this is understandable in view of lack of customers. There are also significant delays in agreement on technical specifications of universal LNG connections and matters related to the location and operational practices of bunkering facilities in ports. There are in addition big gaps in crew training regarding LNG bunkering.

16. To recap, there are several good reasons for questioning the reality of the prospect of using LNG as a ship fuel.. There are very few ships burning LNG bar those which transport it. There are too few bunkering points worldwide. There are things to be done re LNG bunkering specifications. Ship crews are untrained for this matter. Retrofit conversions are too expensive. New building orders for dual fuel (LNG/Fuel oil) are few and far apart. LNG burning, although good for humans and vegetation, does not do much about global warming. Financing provisions are not there to support any serious attempt to launch such an initiative, and last but not least, Ship owners have been skeptical about this line of reasoning.

17. Is the prospect of LNG for ship bunkering losing ground considering worldwide application? At the moment LNG as a ship fuel is making a slow progress, only time will show if it will become a workable alternative. There have been other instances in the EU where good ideas did not catch on. There are examples like the ‘’EUROS’’ flag for EU vessels, or the disfunctional Regulation 3577/92 that have not caught on. In my mind however absolute priority should be given to develop means of ship propulsion that will not generate more CO2 thereby exacerbating the global warming problem. However, this might mean parting with the internal combustion engine.