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Energy Conversion and Management
journal homepage: www.elsevier.com/locate/enconman
Review
How to decarbonise international shipping: Options for fuels, technologies
and policies
Paul Balcombea,b,⁎
, James Brierleyc
, Chester Lewisd
, Line Skatvedtc
, Jamie Speirsa,e
,
Adam Hawkesa,b
, Iain Staffellc
a
Sustainable Gas Institute, Imperial College London, London SW7 1NA, UK
b
Department of Chemical Engineering, Imperial College London, SW7 2AZ, UK
c
Centre for Environmental Policy, Imperial College London, London SW71 NE, UK
d
E4tech, 83 Victoria St, Westminster, London SW1H 0HW, UK
e
Department of Earth Science and Engineering, Imperial College London, SW7 2BP, UK
A R T I C L E I N F O
Keywords:
Decarbonisation target
LNG
Biofuels
Efficiency
Slow-steaming
Market-based mechanisms
A B S T R A C T
International shipping provides 80–90% of global trade, but strict environmental regulations around NOX, SOX
and greenhouse gas (GHG) emissions are set to cause major technological shifts. The pathway to achieving the
international target of 50% GHG reduction by 2050 is unclear, but numerous promising options exist. This study
provides a holistic assessment of these options and their combined potential to decarbonise international
shipping, from a technology, environmental and policy perspective. Liquefied natural gas (LNG) is reaching
mainstream and provides 20–30% CO2 reductions whilst minimising SOX and other emissions. Costs are fa-
vourable, but GHG benefits are reduced by methane slip, which varies across engine types. Biofuels, hydrogen,
nuclear and carbon capture and storage (CCS) could all decarbonise much further, but each faces significant
barriers around their economics, resource potentials and public acceptability. Regarding efficiency measures,
considerable fuel and GHG savings could be attained by slow-steaming, ship design changes and utilising re-
newable resources. There is clearly no single route and a multifaceted response is required for deep dec-
arbonisation. The scale of this challenge is explored by estimating the combined decarbonisation potential of
multiple options. Achieving 50% decarbonisation with LNG or electric propulsion would likely require 4 or more
complementary efficiency measures to be applied simultaneously. Broadly, larger GHG reductions require
stronger policy and may differentiate between short- and long-term approaches. With LNG being economically
feasible and offering moderate environmental benefits, this may have short-term promise with minor policy
intervention. Longer term, deeper decarbonisation will require strong financial incentives. Lowest-cost policy
options should be fuel- or technology-agnostic, internationally applied and will require action now to ensure
targets are met by 2050.
1. Introduction
Maritime shipping is a key component of the global economy re-
presenting 80–90% of international trade [1,2]. Sea transport emits less
carbon dioxide per tonne-km compared to other forms of transport
[3–5], but given its sheer scale, the maritime sector is a major con-
tributor to global ecological impacts [6]. The shipping industry is re-
sponsible for emitting approximately 1.1 Gt of carbon dioxide (3% of
global greenhouse gas emissions), as well as 2.3 Mt of sulphur dioxide
and 3.2 Mt nitrogen oxides per year [7–9]. For context, if the maritime
industry were a country, it would be the 6th largest CO2 emitter
worldwide (ahead of Brazil and Germany).
For this reason, the International Maritime Organisation (IMO) (the
UN agency for shipping) has established a target for global shipping to
decarbonise by at least 50% from 2008 levels by 2050 [10]. Similarly,
Maersk (the world’s largest shipping container company) has an-
nounced its intentions to be net-zero carbon by 2050, with carbon
neutral vessels commercially viable by 2030 [2].
This environmental impacts of shipping are set to rise as world
seaborne trade is anticipated to grow by around 3% per year into the
early 2020s [11]. Even ambitious decarbonisation scenarios see energy
consumption growing by 40–50% between 2015 and 2050 [12], whilst
other sectors proceed with decarbonising rapidly. Maritime freight is
responsible for 12% of global transport energy demand (see Fig. 1),
https://doi.org/10.1016/j.enconman.2018.12.080
Received 1 October 2018; Accepted 15 December 2018
⁎
Corresponding author at: Sustainable Gas Institute, Imperial College London, London SW7 1NA, UK.
E-mail address: p.balcombe@imperial.ac.uk (P. Balcombe).
Energy Conversion and Management 182 (2019) 72–88
0196-8904/ © 2018 Elsevier Ltd. All rights reserved.
T
totalling approximately 13 million TJ in 2015, or 1.4 kWh per person
per day globally [13]. Consequently, the sector is placed in a unique
position to not only contribute to climate change mitigation by directly
reducing emissions, but also by becoming leaders in climate innovation
and enabling the decarbonisation of other energy sectors via develop-
ment of low carbon fuel infrastructure.
However despite this, the sector has been largely unregulated until
recently [6]. Stringent targets have been put in place to significantly
reduce NOx and SOx air-quality-related emissions [15] and, crucially, in
2018 the IMO set a target for global shipping to decarbonise by at least
50% from 2008 levels by 2050 [10].
As with other sectors, there is no silver bullet solution to dec-
arbonisation. It is likely that halving carbon emissions will require a
range of options, including new fuel sources, raising technical or op-
erational efficiencies and reducing demand. Shipping has undergone
paradigm shifts in fuel before, from coal to diesel in the 1920s and from
diesel to heavy fuel oil (HFO) in the 1950s [16]. Liquefied natural gas
(LNG) is the main alternative fuel to liquid fossil fuels, offering reduced
air quality impacts and direct CO2 emissions, although methane emis-
sions have been shown to reduce the GHG benefit [17]. Other alter-
natives include biofuels, methanol, hydrogen, electric propulsion or
even nuclear fuels, but each offer differing levels of decarbonisation and
incur different economic costs as well as pollutants relating to air
quality. Likewise, various efficiency measures exist that would reduce
the fuel consumption per unit distance, particularly the act of slow
steaming. But their impact on efficiency depends on various factors
such as the class of vessel and its application.
This study reviews the different combinations of fuels, technologies
and policies that may be used to reduce GHG emissions from interna-
tional shipping. For each option, the emissions reduction potential is
quantified and feasibility from a technical, economic and political
perspective is assessed. Combinations of possible reduction measures
are assessed and recommendations are made in terms of effectiveness
and economic-political feasibility. The focus of this study is on com-
mercial shipping, particularly with respect to international trade given
the anticipated growth resulting from increasing population and eco-
nomic development.
Existing literature has included broad estimates of global shipping
decarbonisation routes [3,18], as well as some specific estimates of
emission reduction measures relating to energy efficiency or vessel
design [3,19,20], or from alternative fuels [21,22]. In particular,
Bouman et al. [19] summarise a large proportion of literature on the
potential emissions reductions associated with energy efficiency, ship
design and fuel changes. They suggest a combination of technologies
would result in large reductions and that the knock-on impacts of other
non-CO2 emissions (such as methane, NOX and SOX) must also be
considered. Yuan et al. [23] estimated global CO2 savings from a se-
lection of energy efficiency measures under uncertainty, whilst a few
studies estimate the cost-effectiveness and emissions-reduction poten-
tial of energy efficiency measures [24] and fuels for the global fleets
[25]. Many studies also analyse the policy mechanisms that may
achieve shipping decarbonisation such as market-based mechanisms
(MBMs) and further efficiency improvement legislation [3,27–29]. This
review adds to this body of literature by providing an up-to-date as-
sessment of the current status of shipping and emissions, investigating a
broad selection of fuel, technical and operational emission reduction
options, and providing a policy assessment to provide insight into how
to achieve a 50% GHG emissions reduction target.
The contribution of this study is to inform pathways to achieve deep
decarbonisation, to highlight the mechanisms with greatest potential to
reduce emissions and to identify critical research gaps. In the next
section, the current state of the maritime industry is outlined, with
respect to fleets, fuels, emissions and current regulatory frameworks.
Sections 3 and 4 quantify the potential impacts associated with dif-
ferent fuel switches, including liquefied natural gas (LNG, Section 3),
renewables and nuclear options (Section 4). Section 5 evaluates the
impact of various energy efficiency measures, before the policy me-
chanisms to achieve emissions reductions are assessed in terms of
current status and future potential. The combined emissions reductions
associated with different combinations of reduction measures are as-
sessed in Section 7, before conclusions and recommendations for
technical and regulatory change are made in Section 8.
2. The current status of international shipping
Globally there are around 52,000 merchant ships contributing to
international shipping of goods and passengers (see Fig. 2). For a sense
of scale, these ships are propelled by over 500 GW of engine capacity
[29], more than Europe’s entire fleet of fossil-fuelled power stations
[30]. There is significant heterogeneity across the merchant fleet with
different services, ships, fuels, emissions and regulations, thus there is
no one-size-fits-all decarbonisation solution. The following describes
Fig. 1. Breakdown of energy usage in the transport sector globally in 2015. The
outer ring gives the share of individual modes, the middle and inner rings ag-
gregate these uses. Data from [13].
0
5000
10000
15000
20000
0
50
100
150
200
Number of Vessels
(MtCO2)
Carbon emissions
Fig. 2. Number of merchant ships and their carbon emissions, by category in
2017. Ferry includes passenger and passenger-RoRo (roll-on roll-off). Data from
[29].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
73
current status of international shipping regarding emissions, fuel use
and regulatory environments.
2.1. Current emissions from shipping
In 2014, international shipping emitted 1130 Mt CO2, which ac-
counts for 3.1% of global CO2 emissions [31]. As shown in Fig. 3,
shipping emissions have consistently increased since 1990, largely in
line with global trade increases. However the contribution to total
emissions has actually decreased from 2007 to 2014, largely due to
growth in other non-shipping emissions rather than decarbonised
shipping, particularly growth in emissions from coal-fired electricity
generation in China and India [31].
The greatest source of GHG emissions within shipping are from
container ships, bulk carriers and oil tankers, as shown in Fig. 2. This is
due to these vessels conducting longer journeys to deliver their cargo –
international and intercontinental, rather than domestic and coastline
routes [31]. The spatial distribution of these emissions is shown in
Fig. 4, and covers most of the oceans and seas in the northern hemi-
sphere.
The emissions from shipping is dependent on fuels and efficiencies:
different fuels have varying CO2, SOx, NOx and methane emissions, and
inefficient ships use more fuel. Of the approximately 300 Mt of global
maritime fuel consumption in 2015, 72% was residual fuels (e.g. heavy
fuel oil HFO), 26% distillates (e.g. marine diesel oil) and 2% liquefied
natural gas (LNG) [34]. HFO typically has a high sulphur content [35]
and the contribution of international shipping to global SOx emissions
in 2012 was calculated to be 13% annually [36]. SOx emissions cause
health implications, as well as causing ecosystem damage via acid-
ification to water and soil [37]. In 2009, The Guardian reported that the
largest 15 ships caused more sulphurous pollution than the global car
fleet (760 m cars) combined [38].
Sulphurous and nitrogen oxide emissions have a short-lived climate
cooling effect, meaning the net impact of shipping over 20 years (based
on a single year’s emissions) is actually to reduce global temperatures
[39]. However, the longer-term impact of GHG emissions from shipping
is certainly to rise. Distillate fuels like marine gas oil (MGO) and diesel
oil (MDO) have lower sulphur content, whereas GHG and NOx emis-
sions, which arise from high temperature combustion, may be similar
[21,40,41].
Marine black carbon emissions also have large impacts on the cli-
mate and to human health. Black carbon is a type of fine particulate
(PM2.5) that is emitted from burning HFO and to a lesser extent MDO.
The GWP of black carbon varies depending on location and source, but
in aerosol form has a 100 year GWP of 830 [39]. As a solid particle,
atmospheric lifespan is short at ∼1 week [42] but global shipping
emissions of black carbon account for 5–8% of annual GHG emissions
on a 100 year timescale according to the ICCT [43].
2.2. International shipping governance
The IMO is a UN agency responsible for the safety and environ-
mental regulation of global shipping; it has 172 Member States and
three Associate Members [44]. IMO regulations must be ratified by over
half of the member states, which are then translated into domestic law.
However, the compliance process is complicated by the flag state of the
respective ship and the concept of ‘flags of convenience’ (FOC).
FOC are those characterised by low taxation and lower regulatory
measures in place and began in the 1920s when US ship owners began
to register their ships in Panama after being frustrated by increased
regulations and rising labour costs. As of 2015, over 55% of global gross
tonnage in the international shipping industry is registered in the top 12
FOC states, as identified by the International Transport Workers’
Federation (ITF). The regional Port State Control (PSC) authorities
monitor the FOCs and quantify their credibility and compliance levels.
2.3. Shipping emission regulations
The key regulation for controlling environmental impacts from
shipping is the Maritime Agreement Regarding Oil Pollution (MARPOL)
for SOX, NOX and GHG emissions. The regulation originally focused on
SOX, limiting sulphur content in bunker fuel to 4.5% and gradually
dropping over time as shown in Fig. 5. The global sulphur content limit
is set to be reduced substantially in 2020 to 0.5%, however, the global
average sulphur content of HFO has not materially changed in ac-
cordance with targets [16].
The IMO (through MARPOL) also set up Emission Controlled Areas
(ECA), within which vessels must comply with stricter emission limits
[46]. Currently there are four ECAs, in Europe and North America,
which also set limits on NOx and particulate emissions [47]. MARPOL
Annex VI, introduced in 1997 and strengthened in 2005 [48], in-
corporates regulatory limits on NOx emissions. Different tiers of com-
pliance apply to ships with different construction dates as indicated in
Fig. 5, although the most stringent tier III regulations only apply to
ships operating in ECAs [49].
Another addition to MARPOL in 2001 was the Energy Efficiency
Design Index (EEDI), to reduce CO2 emissions for new ships via tech-
nical efficiency improvements [50]. EEDI sets a minimum energy effi-
ciency level per capacity mile (e.g. tonne mile) for different ship types
and sizes [7]. Setting the target of a 10% reduction of CO2 levels (grams
of CO2 per tonne mile) by 2015, 20% by 2020 and 30% by 2025, the
EEDI aims to facilitate innovation and technological improvements in
shipping by tightening the target every 5 years [50,51]. The Ship En-
ergy Efficiency Management Plan (SEEMP) was also introduced into
MARPOL, for both new and existing ships, as a measure to improve fuel
efficiency via operational improvements [48]. However, whilst there is
a requirement to implement the plan, no specific fuel savings or effi-
ciency improvements are stipulated [52].
The EEDI is currently the sole carbon emissions policy to mitigate
CO2 emissions in international shipping and it is estimated that the
global shipping fleet will not be fully EEDI compliant until 2040–2050
0
10
20
30
40
50
60
70
80
90
0
200
400
600
800
1000
1200
1400
1600
1800
1990 1995 2000 2005 2010 2015
Carbon emissions from
shipping(MtCO2)
Global Trade (trilliont-km)
Global trade ($ trillion)
2.5%
3.0%
3.5%
1990 1995 2000 2005 2010 2015
Share of global carbon emissions from shipping
Fig. 3. CO2 emissions from global shipping set against global trade (top panel);
and the relative share of CO2 emissions that come from shipping (bottom
panel). Data from [3,9,31,32].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
74
[51]. However, the reductions are negligible compared to the levels
required to meet the UN 2050 global climate change targets [31].
2.4. The 50% GHG emission target
In 2018, the IMO announced an initial agreement to reduce GHG
emissions by 50% by 2050 compared to 2008 emissions [10], with a
solidified strategy to be produced in 2023. This target should not be
underestimated in terms of its challenge, as well as potential benefit to
global decarbonisation pathways. Business-as-usual GHG emissions
from the maritime industry are expected to increase significantly in the
first half of this century, with IMO emission scenarios projecting growth
between 50% and 250% by 2050 – depending on economic growth and
development [31]. Reductions in emissions could be sourced from in-
creasing the efficiency of vessels, such as via the EEDI, or a step change
in fuel usage.
Alongside the IMO agreement, various policy measures were sug-
gested for the short- (2018–2023), medium- (2023–2030) and long-
term (beyond 2030). Short-term measures include strengthening the
EEDI, incentivising early adoption of low carbon technologies, in-
centivising speed reduction/optimisation, developing carbon intensity
guidelines for all marine fuels and research into innovative technologies
and fuels for zero-carbon propulsion. Mid and long-term measures are
to further develop the short-term measures and to consider im-
plementing market-based-mechanisms to incentivise emissions reduc-
tions. The multitude of technical measures to meet emissions targets,
and the political and infrastructural means by which to implement
them, are multifaceted and are reviewed in depth for the remainder of
this paper.
3. Liquified natural gas (LNG)
One pathway to comply with SOx and NOx requirements and to
reduce CO2 emissions is via LNG as a fuel. Natural gas is liquefied by
cooling to −162 °C and thus takes up 600 times less space for storage
and transportation [54]. There are four main types of LNG engine/
turbine in use today: lean-burn spark ignition; low pressure dual fuel (4-
and 2-stroke); high pressure dual fuel; and gas turbine [55]. Each have
different operational characteristics, efficiencies and exhibit sig-
nificantly different emission profiles [55]. LNG has been used for the
propulsion of LNG carrier vessels for more than 40 years, by using the
boil-off gas created in the storage tanks to run dual-fuel engines [56].
Fig. 4. Map showing the global distribution of greenhouse gas emissions from shipping. Based on the intensity of shipping lane usage from [33] normalised to 2013
emissions from the sector.
0%
1%
2%
3%
4%
5%
2000 2005 2010 2015 2020 2025
Sulphur content
Global limit
ECA limit
Global
HFO
average
0
2
4
6
8
10
12
14
16
18
0 500 1000 1500 2000
Engine rated speed (rpm)
NOX emissions limits (g/kWh)
Tier I
(2000)
Tier II (2011)
Tier III (2016)
Fig. 5. Sulphur and nitrogen oxides (NOX) regulations for shipping fuels. In the left panel, lines show the MARPOL Annex VI limits for open seas and in emissions
control areas (ECAs); points show the global average in HFO fuel [3,16,31]. In the right panel, lines show the limits as a function of engine speed for open seas (Tier
II) and control areas (Tier III) [45].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
75
The first dedicated LNG-fuelled vessel was built in 2000. In 2017,
there were 117 LNG-fuelled vessels (non-LNG carriers) in commercial
operation, with many new LNG-fuelled vessels currently under pro-
duction [55,57]. Current vessels are mainly operate in Europe due to
the expansive ECAs, and most new vessels are planned in Europe (57%)
and North America (38%) due to emissions regulations and underlying
fuel prices [58,50].
3.1. Environmental impacts
The potential benefits of LNG over conventional liquid fuels relate
chiefly to NOx, SOx, particulates and CO2 emissions. Natural gas has a
higher hydrogen-carbon ratio than liquid fossil fuels [59], resulting in
20–30% lower CO2 emissions on combustion [60]. However, the re-
lative improvement in CO2 emissions may be negated by methane
emissions, in particular through engine slip [21,55]. Slip occurs where
some methane fails to combust in the engine, resulting in leakage to the
atmosphere [56]. Additionally, leakage may occur in other parts of the
drive train, as well as across the natural gas supply chain in general
[50,61,62]. Methane is a potent, albeit short-lived, greenhouse gas and
has a global warming potential (GWP) 36 times stronger than CO2 on a
100-year time horizon [39]. Currently, LNG engines have a methane
slip of 2–5% of total throughput, although estimates from high-pressure
dual fuel 2-stroke are substantially lower [57,63].
There are various estimates of life cycle GHG emissions from using
LNG as a shipping fuel [17,21,67–69], a summary of which is given in
Fig. 6 including the impact of upstream supply chain and ship bun-
kering and operation. Upstream impacts arise from resource extraction,
processing and liquefaction and transportation, while downstream
emissions are from combustion and leakage (slip). Studies typically
estimate a relative decrease in emissions by switching from distillate
(e.g. MDO) or residual fuel (HFO) to LNG of approximately 8–20%.
Upstream emissions chiefly arise from the energy-intensive liquefaction
process, which may use 8–12% of the natural gas throughput as fuel
duty [66], as well as methane emissions from the supply chain. Emis-
sions from the ship are governed by the engine efficiency and the en-
gine methane slip [67]. Therefore, reductions in methane emissions are
imperative if LNG is to contribute to the 50% GHG reduction target. If
the total methane emissions were 5.5% over its life cycle, then the
global warming potential of LNG would the equal that of HFO, MDO or
MGO [57].
LNG does not contain sulphur, meaning that the SOx emissions are
theoretically reduced to zero. In dual-fuel engines a small fraction of
oil-based fuel is needed for ignition [59] but reductions in SOx emis-
sions may still reach 90–99% compared to HFO [55,68]. Particulate
matter (PM) is also almost completely eliminated [56].
NOx emissions are significantly lower in a low-pressure dual-fuel
engine system than liquid fuels. NOx emissions are dependent on the
combustion temperature, with higher temperatures resulting in more
NOx. A lean fuel-to-air ratio achievable with some LNG engines and the
higher proportion of gas with a dual fuel engine enables a lower com-
bustion temperature [69] and reduced NOx emissions of 75–90% re-
lative to HFO [55,59,68]. However, there is a trade-off between NOx
and methane emissions: low temperatures favour low NOx emissions,
while higher temperatures result in less methane slip. For high pressure
dual fuel engines, methane slip may be reduced to ∼0.2% of
throughput [63], but NOx emissions would not meet tier 3 standards
without further exhaust treatment [55].
For dual-fuel engines, the relationship between fuel blend and CO2
emissions is broadly linear, but significant NOx emission reductions are
only seen below a 30% share of diesel [69]. Therefore without addi-
tional exhaust gas treatment technologies, for example selective cata-
lytic reduction (SCR), the proportion of oil fuel will be limited by the
NOx emissions regulations set out in the NOx ECAs.
3.2. Fuel costs for LNG
The North American shale gas boom and resultant fall in gas price
has increased the viability of LNG as a marine fuel outside Europe [70].
Fig. 7 shows the average fuel prices for different available shipping
fuels, assuming current average engine efficiencies: LNG = 6.2 kWh/kg
fuel [55,63]; HFO = 5.0 kWh/kg [21,65]; MDO = 5.4 kWh/kg
[21,63,65]; methanol = 2.5 kWh/kg. After 2008, the freight market
went into recession whilst bunker prices spiked, leading a search for
alternative fuel sources [50]. In 2015 the HFO price dropped again, but
even with increased competitiveness in the prices, there is still interest
in LNG as a marine fuel due to the environmental drivers.
The price of LNG is generally lower than HFO, whereas MDO is
approximately 50% more expensive than HFO. However, the price of
LNG as a marine fuel includes much uncertainty, through variable gas
prices and the cost of new LNG infrastructure required for international
0
100
200
300
400
500
600
700
800
GHG emissions (gCO2e/kWh)
Combustion (534 ± 73)
Upstream (116 ± 67)
Total (650 ± 64)
Fig. 6. Various estimates of GHG emissions from LNG-fuelled ship engines ex-
pressed per kWh of engine output, split into upstream supply chain and ship
emissions. Data from: [17,21,67–69].
$0.00
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
$0.18
$0.20
2000 2005 2010 2015
Fuel cost (USD/kWh)
Methanol
MDO
HFO
LNG
(LPDF 4-stroke)
Fig. 7. Average fuel costs for each year for different fuels per kWh of engine
output. LPDF 4-stroke = low pressure dual fuel 4 S run on LNG. Average fuel
costs per tonne from [14,75–81] are converted to engine output using standard
engine efficiencies.
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
76
trade routes [50,70]. These added costs are estimated to be between
50 USD/t and 630 USD/t on top of the indexed gas prices [70].
3.3. Capital costs for LNG
Table 1 shows the capital costs (CAPEX) for the engine and exhaust
technologies associated with various fuels. The cost associated with
MGO engine conversion is relatively small [70], whereas Wang and
Notteboom [60] estimate the capital cost for an LNG-fuel vessel relative
to an oil-fuel equivalent is 20–25% more expensive. However, the cost
of the LNG propulsion technologies may lower as technology produc-
tion rates increase [78].
LNG storage tanks require approximately twice the volume of the
conventional bunker tanks for the same energy content, due to the
density difference. This can cause issues when retrofitting and a hull
modification may be needed [56], thus it is technologically and eco-
nomically favourable to design LNG systems for new-build projects
[70].
The cost of adding port infrastructure may also be significant [79].
LNG propulsion have the largest economic advantage for those vessels
operating for the highest proportion of their sailing time in the ECAs.
Most vessel voyages are categorised either as those that spend greater
than 80% of their sailing time in the ECA zones and those that spend
less than 5% of their time in ECA zones [56]. For those that spend less
than 5% of their time in ECA zones, there is little incentive to switch to
LNG propulsion as they may continue to use HFO and switch to MDO
for the short periods of time in ECAs and ports [50]. Consequently, the
current emissions standards are not satisfactory to create economic
incentives large enough to cause a fuel change to LNG in the larger
vessels with more global voyages.
4. Alternative fuels
Whilst LNG offers advantages over liquid fossil fuels via reduced air
quality emissions, it may not be enough to meet more stringent climate
targets. Nuclear, renewables and biofuels also have potential to reduce
shipping CO2 emissions and range from economically feasible short-
term options to less developed long-term options. Fig. 8 shows the
range of literature estimates of life cycle GHG emissions for different
ship fuels. Broadly, biofuel options (bio-LNG, biomethanol and other
bio-liquids) exhibit the lowest emissions, whilst conventional methanol
fuel exhibits the highest emissions. Each alternative fuel is discussed in
the following section, with respect to their environmental and eco-
nomic credentials, as well as resource/political availability.
4.1. Biofuels
Biofuels may offer large GHG emission reductions and in some cases
can be used as a ‘drop-in’ fuel, requiring very little alteration to the
incumbent engines [84]. First generation conventional biofuels are
readily available today in significant quantities, including straight ve-
getable oil (SVO), hydrotreated vegetable oil (HVO), fatty acid methyl
ester (FAME) and bio-ethanol. However, the use of conventional bio-
fuels is restricted internationally due to sustainability issues associated
with large scale production. The use of waste oils can mitigate these
concerns but the availability of waste oils for large scale production are
a barrier.
Advanced biofuels use feedstocks with fewer sustainability con-
cerns. The most applicable advanced biofuels to international shipping
applications are Fischer-Tropsch diesel (FT-Diesel), pyrolysis oil, ligno-
cellulosic ethanol (LC Ethanol), bio-methanol, dimethyl-ether (made of
bio-methanol) and bio-LNG. In general, advanced biofuels have lower
GHG emissions than conventional biofuels, as shown in Fig. 9. The
figure shows a broad range of emissions estimates both across and
Table 1
Cost of installing fuel technologies to current ships and new builds. Data from [70]. MGO = marine gas oil; SCR = selective catalytic
reduction; EGR = exhaust gas recirculation; Values in 2012 US Dollars.
Compliance strategy Retrofit cost Newbuild cost
MGO – engine conversion, SGR, EGR $180,000 + $75/kW $140,000 + $63/kW
HFO and scrubber – scrubber and SCR $600/kW $2200/kW
LNG four stroke duel fuel – LNG tanks, etc. $800/kW $1600/kW
LNG two stroke dual fuel – LNG tanks, etc. $700/kW $1500/kW
LNG four stroke spark ignition – LNG tanks, etc. $800/kW $1600/kW
0
200
400
600
800
1000
GHG emissions (gCO2 e/kWh)
Range
Mean
Individual studies
Fig. 8. Literature estimates of total life cycle GHG emissions for different ca-
tegories of fuels. Blue circles represent individual literature estimates, red bars
represent mean value for each category. Data from [17,21,41,67–69,84–87].
0
100
200
300
400
500
600
700
800
GHG emissions (gCO2e/kWh)
Range
Mean
Individual studies
Fig. 9. Overview of GHG emissions for comparison of selected biofuels and
fossil fuels. Data from [82,85].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
77
within the biofuel categories. Note that the lowest values for FAME and
HVO are using waste oils.
Biofuels could help to achieve NOX, SOX and GHG emissions re-
duction targets. All biofuels contain very little sulphur [82]. FAME for
example has very low sulphur content (∼20 ppm) and exhibits lower
NOX and PM emissions than marine gas oil [83]. Additionally, biofuels
are biodegradable which is an advantage over fossil fuels with respect
to accidental spills [82].
Diesel-like fuels, such as SVO, HVO, FAME, FT-diesel and pyrolysis
oil can be used in current marine diesel engines with no or small engine
modifications and can also use the current storage and bunkering in-
frastructures [82]. Alcohols and gaseous fuels like bio-ethanol, bio-
methanol, bio-LNG and bio-DME require more significant changes to
engine, storage and bunkering infrastructure, incurring additional ca-
pital costs. They all require spark ignition engines, dual fuel compres-
sion ignition engines or converted compression ignition engines, given
their lower cetane number (with the exception of DME) and cannot self-
ignite [86].
A barrier to biofuels uptake is the price differential between in-
cumbent fuels like HFO, MDO and the biofuels. For example, the IEA
estimate a 2016 FAME price of 1040 USD/t and HVO of 542 USD/t,
effectively double the fuel price of their fossil counterparts MDO
(482 USD/t) and HFO (290 USD/t), respectively [84]. Costs are higher
for advanced biofuels with the larger GHG emission savings and fewer
sustainability concerns, due to the complexity and immaturity of the
production processes.
There is also disagreement on whether current GHG emission ac-
counting practices are fit for purpose [87]. The magnitude of biogenic
carbon emissions factors vary considerably over time [88], signalling
the need for strong oversight of supply chains and forest management
[89]. Given differing agricultural and processing requirements, and the
variability across different biofuel sources, ensuring low environmental
impacts across the biofuel supply chain is a major challenge. Strong
legislative frameworks and incentives for bioenergy, for example via
the EU’s Renewable Energy Directive, is one way to mandate sustain-
able practices [82]. However, some national and regional policies are
not yet in favour of biofuels and the current classification does not
differentiate between biogenic carbon and fossil carbon content in the
Energy Efficiency Design Index (EEDI) [82].
The wider implications of biofuels involve complex trade-offs in
utilising resources that involve human essentials such as food and water
[90]. The global potential for biofuels will be heavily constrained once
vital crops and land needed to supply food for a growing world popu-
lation are accounted for, which includes constraints on water and fer-
tilizers to grow second-generation fuel crops [91]. Some studies have
even omitted biofuels from global sustainable energy scenarios due to
the potential for air pollution during cultivation and reprocessing, and
because carbon neutrality may be unobtainable due to the sacrifice of
forests for arable land. Nevertheless, in practice, second-generation
biofuels are likely to play some role for transport in conjunction with
renewable electricity [92], but will not be capable of meeting the total
demand [91].
In summary, biofuels offer compatible replacements to the incum-
bent fossil marine fuels in the short- and medium term. The GHG re-
duction potential is higher for second generation biofuels, where FT-
diesel and pyrolysis oil are compatible with diesel infrastructure. Other
second-generation fuels such as LC ethanol, bio-methanol, DME and
bio-LNG would require much larger changes to engines, storage and
infrastructure. The cost and availability of the biofuels, particularly
advanced biofuels, is a barrier and they will not compete with fossil fuel
alternatives, unless a strong GHG reduction policy, or carbon price, is
introduced. Even then, resource must be managed to ensure impacts on
broader agriculture and food resources are minimised.
4.2. Methanol
Methanol fuel for ships has received some attention and there is
currently one marine engine available that may run on methanol as a
dual fuel. To date (2018) there are 7 methanol-fuelled ships in opera-
tion, with another 4 planned to be in operation by 2019 [93]. Methanol
combustion in marine engines produces modest CO2 reductions and low
emissions of other pollutants, relative to HFO or MGO [21,41]. Stena
Germanica, the world's first methanol-powered sea vessel, is suggested
to have reduced SOX emissions by 99%, NOx by 60%, particulates by
95% and CO₂ by 25%, thus complying with the latest ECA regulations
on its Baltic Sea route [94].
Methanol can be produced from many sources, including natural
gas, from catalytic hydrogenation of a waste CO2 stream or from bio-
mass. In the case of a biomass feedstock, CO2 emissions are biogenic
and may be discounted (see Section 4.1 for discussion). However, the
methanol supply chain produces significant emissions depending on its
feedstock and process. The use of methanol from natural gas results in
significantly lower air quality emissions, but life cycle GHG emissions
are around 10% higher than from HFO or MDO (see Fig. 8), due to the
natural gas supply chain, gas reforming and methanol synthesis. If
waste CO2 is to be used (with renewable hydrogen) to produce me-
thanol, great care must be taken in carbon accounting: it is not ne-
cessarily appropriate to suggest that, if it is a thermogenic waste pro-
duct, emissions are discounted. Thus, life cycle emissions associated
with methanol from catalytic hydrogenation may be significant, but no
studies that estimate emissions from this production route were found.
The cost of methanol as a fuel is greater than liquid fossil fuels and
LNG, as shown in Fig. 7. Thus, whilst air quality emissions may be
significantly reduced, the carbon credentials of methanol fuel must be
proven and then incentivised to encourage further uptake.
4.3. Hydrogen with marine fuel cells
Fuel cells are an efficient way of producing low carbon electricity
[95], but the availability of hydrogen and its low volumetric energy
density require significant additional infrastructure and system design
[91]. Hydrogen fuel cells exhibit no direct greenhouse gas emissions,
but emissions associated with the hydrogen supply chain must be
considered. Feedstock impacts are highly variable, be it renewable
electrolysis, natural gas reforming or biomass gasification [96,97]. This
is demonstrated in Fig. 8, where three estimates of total GHG emissions
from H2 fuel cells exhibit high variability (from 113 to 997 gCO2eq./
kWh), with the low emissions using renewable electrolysis, the central
emissions using natural gas with carbon capture and storage (CCS), and
the highest value using natural gas reforming without CCS [21].
An advantage of fuel cells is that they generate little noise or vi-
brations, whilst marine ecosystems are currently affected by the highly
acoustic nature of shipping [98]. The silent electric motors for pro-
pulsion have a high efficiency (∼95%) and when combined with
∼45% efficient fuel cells show a significant improvement over internal
combustion engines [98]. A diesel generator and micro gas turbine
requires 44% more fuel than a fuel cell of the same output power [99].
There are relatively few hydrogen fuel cell ships in operation today,
with DNV GL recording 23 fuel cell shipping projects at different stages
of development in 2017 [100]. The first civilian ship to utilise fuel cell
technology for supplementary propulsion was the Viking Lady. Main
propulsion was provided by LNG in a diesel engine, with a fuel cell that
operated on hydrogen or methanol (with reconfiguration). This system
reduced SOX by 100%, NOX by 85% and CO2 by 20% [101]. The
‘ZemShip’ (Zero Emission Ship) FCS Alsterwasser, a hydrogen fuel cell
ship based in Hamburg’s port, has 100 passenger capacity and a power
rating of 100 kW for operation on rivers and small waterways [102].
Storage of hydrogen is typically as a compressed gas (upto 700 bar),
as a liquid (cryogenic) or in solid state (metal hydrides) [98]. Large
storage volumes may be a barrier to implementation, particularly for
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
78
retrofits. Table 2 shows the cargo volume and mass impacts for hy-
drogen versus HFO and LNG: liquid hydrogen requires 8 times more
storage volume than HFO and 30 times more for compressed hydrogen.
Hydrogen could also be stored as liquid ammonia, which does not re-
quire such low temperatures (–33 °C cf. –254 °C for liquid hydrogen),
giving reduced parasitic energy requirements [103]. Ammonia could be
used directly for propulsion, either via a combustion engine or in a fuel
cell [104]. No technologies have yet been commercialised for marine
operation, although some dual fuel engines are under development
[105,106].
Cargo shipping must comply with the International Code for the
Construction and Equipment of Ships Carrying Liquefied Gases in Bulk
(IGC Code), but the IGC code does not currently allow for the trans-
portation of liquid hydrogen. Changes to the code are being developed
and cargoes not covered by the code can be carried if there is an
agreement between relevant nations [109]. For example, Australia and
Japan recently signed a memorandum at the Australian Maritime Safety
Authority (AMSA) which permits liquid hydrogen to be shipped in bulk
for the first time [109].
Prohibitive capital costs for new infrastructure are a barrier to
global commercialisation. Some natural gas infrastructure could be
used for hydrogen, which could drastically reduce capital costs, parti-
cularly in countries with a gas-grid network [110]. Hydrogen fuel costs
are higher, potentially by an order of magnitude, than conventional
fuels [107], but this gap should decline as electrolysers fall in cost
[111]. Estimates of retail costs for hydrogen vary from around 0.06 to
0.24 USD/kWh fuel energy content with an average of 0.12 USD/kWh
[112], reflecting a wide range of potential feedstocks and conversion
processes. In comparison, the 2017 estimate for MDO was 0.04 USD/
kWh energy content (not including energy efficiency losses as depicted
in Fig. 7). Thus, strong incentives are needed to encourage uptake of
hydrogen.
The cost of introducing hydrogen could be reduced by selecting a
small number of large vessels that are limited to point-to-point routes
between highly developed ports with the available infrastructure (e.g.
Rotterdam and Tokyo) or within a small geographic area (e.g. North
Sea) [113]. However, despite the potential of some fuel cell technolo-
gies, the high-power demand required to propel large ships is not yet
viable with current fuel cell technology and so will not replace the
existing multi megawatt main engines of large ships in the foreseeable
future [114].
4.4. Electric propulsion systems
As with the propulsion in hydrogen fuel cell ships, electric propul-
sion (EP) systems feature an electric motor supplied by a device that
contains a stored form of electrical energy [92]. The environmental
impact is determined by the source of the stored energy, for example
stored hydrogen or electrical energy can be produced from fossil fuels.
Regardless, developing the required infrastructure could increase the
industry’s flexibility, creating a potentially low carbon pathway. The
company ‘Norwegian Electric Systems’ (NES) is currently developing
and integrating hybrid engines and EP systems [115]. Two of its ferries
shall be operating on routes with strict emission requirements as de-
signated by the Norwegian Road Authorities, which has resulted in the
development and deployment of an EP system using chargeable lithium
ion batteries [115]. No economic assessments of electric propulsion
ships were found to date, but cost-effectiveness will be governed pri-
marily by battery costs, which are falling rapidly [116], and the cost of
electricity or fuel used for charging.
4.5. Nuclear marine propulsion
Nuclear fuel offers high power density with low and stable fuel
prices, very low greenhouse gas and air quality emissions, and the
ability to operate for long periods without refuelling. Nuclear propul-
sion is achieved via a small onboard nuclear plant heating water to raise
steam, which drives steam turbines and turbo generators. While used
extensively for military warships and submarines, the development of a
civilian nuclear fleet faces many hurdles with public and political
perception, legislation and training, and safety against catastrophic
accidents, terrorism and non-proliferation.
In 2016, it was estimated that 166 naval reactors are in operation:
85 owned by the US, 48 by Russia and 33 across the rest of the world
[117]. To date there have only been four commercial nuclear vessels;
the Russian Sevmorput is currently the only one active [118]. However,
this ship experiences restrictions in which ports it can visit, due to ci-
vilian evacuation plans and fears at docks [119]. Uptake in the com-
mercial sector could utilise small modular reactor (SMR) technology,
sized at a few hundred MW [120], but remain an early-stage concept
[121]. An example is the ‘RITM-200′ reactor for icebreakers such as the
NS Arktika, with a seven-year refuelling cycle. The cost, with two
175 MW steam generators is approximately $1.9 billion per vessel
[120,122].
However, control of nuclear material is a significant security and
geopolitical concern. Highly-enriched uranium (30–90% U235) is used
in Russian naval reactors and could be subverted into an improvised
weapon [117]. Proposals to limit the use of highly-enriched uranium in
the civilian sector are progressing with support of the International
Atomic Energy Agency [120], and other nations’ civilian nuclear vessels
have used low-enriched uranium.
Safety concerns may be an insurmountable barrier to wider adop-
tion. There are seven nuclear power reactors at the bottom of the ocean
due to naval incidents, and the US Navy has released radioactive water
during fuelling operations [123]. Further challenges involve the dis-
tribution, testing and monitoring of technologies and components
needed for reactors, fuel production and decommissioning [121]. Re-
tired nuclear vessels are ultimately still stored afloat, indicating that a
permanent solution has not been established [121]. Due to public
perception, the lack of precedent and shortfalls in legislative frame-
works, trained personnel and infrastructure, the potential for large scale
deployment before 2050 is low.
5. Vessel efficiency improvements
Several operational and technological changes could reduce ship-
ping emissions (and fuel use) via increased efficiency, such as the use of
wind propulsion assistance, slow steaming, low resistance hull coatings
and waste heat recovery systems. Each are described below with respect
to their decarbonisation potential, costs and applicability.
5.1. Wind assistance
Wind power is being widely developed through both conventional
sails and modern alternatives. These include Flettner rotors, kites or
spinnakers, soft sails, wing sails and wind turbines [124]. They cannot
provide a typical ship’s total propulsion power by themselves, but as
Table 2
Cargo volume and mass impacts for different fuels, for a vessel with a 5.1 day
range. Data from [107,108].
Fuel HFO LNG Compressed
hydrogen
Liquid
hydrogen
Density (kg/m3
) 1010 470 23.7 72.4
Daily fuel use (m3
) 83 203 1186 522
Fuel mass for voyage (t) 421 485 140 140
Tank volume (m3
) 417 1195 12,140 3120
Mass of tanks (t) – 450 8584 972
Containers displaced – 96 372 180
Volume displaced (m3
) – 3700 14,340 6939
Weight displaced (t) – 1258 4878 3123
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
79
wind speeds are generally highest in the high seas [125], they allow
large fuel savings whilst maintaining full speed [104,126]. Wind pro-
pulsion is most effective at slower speeds (e.g. less than 16 knots) [127]
and on smaller ships (3000–10,000 tonnes) [128], which account for
one-fifth of global cargo ships. The compatibility of different designs
varies between ship classes due to potential interference with cargo
handling [124,129].
Various studies have estimated fuel savings across a wide range:
2–24% for a single Flettner rotor, 1–32% for a towing kite [129], up to
25% for the eConowind sails (which pack into a single container) [130]
and some estimate savings from 10 to 60% at slow speeds [127]. Sev-
eral shipping companies have trialled adding sails to cargo vessels
[131], but gradual uptake is not predicted until 2025 due to their re-
lative immaturity [124]. Additionally, unfamiliarity with technology,
safety and reliability concerns, as well as a lack of demonstration have
been primary barriers to broad adoption across a relatively risk-averse
industry [132]. No data on capital costs were found for the installation
of wind assistance systems as they are at an early stage of development,
but the potential fuel savings are large and further research is required
to determine cost-effectiveness under different operational conditions
and ship types.
5.2. Solar assistance
Several carriers are also testing solar assistance, including hybrid
sail systems which utilize both wind and sunlight to preserve limited
deck area. Examples include automated kite sails from SkySails, a 3000
tonne ‘zero-emission’ cargo carrier vessel from B9 Shipping, and the UT
Wind Challenger hybrid freighter with nine solar sails [131], the EMP
Aquarius [133] and Nichioh Maru [104].
The attainable energy would only be sufficient to augment the
auxiliary power demands [124,134], while the erosion of solar panels
by the salty marine environment also poses a barrier. The potential CO2
reduction reported in different studies for solar energy generation on-
board vessels range from 0.2 to 12% [19], while wind-solar hybrid
systems may increase fuel savings to 10–40% [131]. As with wind as-
sistance, no capital or operating cost data were found and further re-
search is required to determine potential cost-effectiveness.
5.3. Slow steaming
Full speed for a container ship is normally between 23 and 25 knots
(44 km/h); slow steaming is defined as 20–22 knots (39 km/h), extra
slow as 17–19 knots (33 km/h) and super slow as 15 knots (28 km/h)
[135]. Slow steaming lengthens round-trip time by 10–20% depending
on the service route and port times [136], but reduces fuel consumption
and CO2 emissions by raising vessel efficiency, as shown in Fig. 10
[135–142]. Longer transport times associated with slower speeds means
more ships or load is required, which reduces the saving. However, a
10% reduction in speed may result in a total average emissions re-
duction of 19% [20]. The benefits of slow steaming are varied across
different ship types, sizes, routes and duties [139]. Additionally, slow
steaming alters engine operating conditions, which could increase
fouling and corrosion due to low operating temperatures and poor
combustion [137,138]. Fouling of the hull also impacts the drag of the
vessel that again will increase fuel consumption.
Cariou [140] estimates that slow steaming reduced emissions by
11% from container ships between 2008 and 2010. The greatest re-
duction was for vessels on large trade routes (multi-trade and Europe/
Far East), in contrast to smaller trades such as Australia/Oceania re-
lated trades which are subject to less slow steaming [140]. The IMO
suggests that container ships, oil tankers and bulk carriers reduced their
specific fuel consumption by 30% between 2007 and 2012 through
slow steaming [31].
As shippers and freight forwarders move to 'just-in-time' delivery,
slow steaming may improve the reliability of scheduling, as vessels can
speed up to make up time if needed. Slow steaming could also absorb
excess fleet capacity during periods of slack demand: in 2010 for ex-
ample, 40% of potentially excess capacity was absorbed by slow
steaming [137].
Fuel costs provide a significant incentive to slow steam, accounting
for up to 50% of total operating costs, and is anticipated to rise with the
introduction of climate related policies [141]. However, while slow-
steaming for fossil-fuelled ships can reduce costs, the benefits are not
necessarily felt by cargo owners unless those lower fuel costs translate
into lower freight rates [142].
Thus slow steaming may require regulation or incentive [140]. A
regulated global speed restriction would decrease emissions sig-
nificantly, but may be unpopular [139], hard to achieve [137,143] and
may even deliver perverse results [140]. Speed reductions via de-rating
engines are covered via the EEDI [144], and may be an option if
emissions reduction targets are increased in the future. A bunker levy or
broader market-based mechanism may be more suitable for giving in-
dustry flexibility in achieving reductions specific to each case
[139,143].
5.4. Paints and hull coatings
A smooth hull is important for efficient operation and minimising
fuel consumption. Bacteria attached to the underwater surface of ships
attracts larger organisms, such as seaweed, bivalves and mussels (see
Fig. 11). These increase a ship’s drag coefficient, slowing it down and
90
100
110
120
130
140
150
160
8.0 8.5 9.0 9.5
Fuel
consumption
(kg/km)
Speed (m/s)
26%
−
Fig. 10. Fuel consumption of sea vessels versus average speed. Data from
[136].
Fig. 11. Fouling costs upon the attachment to ship hull which cause serious
problems in shipping industry. Reproduced with permission from Editec Group.
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
80
increasing fuel consumption [145–151]. Slime can add 1–2% to drag,
weed adds up to 10%, and the heaviest fouling can increase fuel con-
sumption by 40–50% [147–153]. The average surface roughness of a
typical ship hull increases by 40 μm/year, which translates to 1–1.2%
per year increase in fuel consumption [149].
Paints and hull coating can minimise the skin friction component of
resistance, and significant capital is invested in anti-fouling paints to
prevent bacteria from attaching to the hull [150,151]. These have anti-
corrosion and anti-fouling properties to protect against seawater and
marine organisms [152], and have been used for many decades
[145,147].
Tin-based marine coatings were widely used in the 1960–1970s
containing tributyltin (TBT) compounds that were detrimental to the
environment [145]. The degradation of TBT in the marine environment
causes numerous effects, such as endocrine disruption leading to sexual
disorders, including imposex in dog whelks [124,145,151,153], leading
to international legislation banning their use [147,154].
To date it has not been possible to match TBT coatings in terms of
performance, cost and ease of application, but research is ongoing to
find ecologically benign alternatives. Modern coatings can be broadly
classed as either biocide based [153]:
• Insoluble matrix (epoxy, polyester, vinyl ester);
• Soluble matrix (self-polishing, ablative, hybrid);
or biocide free:
• Fouling release (silicone elastomers);
• Mechanical cleaning (epoxy/vinyl esters).
Biocides prevent fouling attachment and growth, but may impact
upon the environment. Unfortunately, their biocide output is greatest
when the ship is at voyage and thus least vulnerable to fouling, causing
excessive loss of biocide [153]. Silicone and fouling release technolo-
gies are attractive biocide-free alternatives from an environmental
perspective [153]. These paints are non-stick to prevent biofouling but
are relatively expensive. They also lack the durability of the biocide
based systems and are more difficult to apply [149]. However, given
their environmental profile, these technologies will become increas-
ingly important for control of marine fouling.
5.5. Waste heat recovery
Around half of the heat energy produced by the power train is lost as
ambient heat without doing any useful work [155,156]. Waste Heat
Recovery Systems (WHRS) can convert heat from the exhaust and
coolant into useful mechanical or electrical energy [157], with esti-
mates of fuel savings in the range of 4–16% [155,156,158]. Several
technologies are available with a range of efficiencies, notably Steam
Rankine Cycle, Organic Rankine Cycle (ORC) and Kalina Cycle. The
ORC uses an organic fluid for energy conversion [156] and forms the
basis of most small-scale WHRSs due to simplicity, efficiency at low
temperature differences, and moderate costs [159]. The Kalina Cycle
uses a solution of ammonia and water, with different boiling points, for
its working fluid. This allows more heat to be extracted, since boiling
occurs over a range of temperatures in distillation [156].
A WHRS represents an additional capital cost but fuel savings may
result in payback period of less than 3 years [160], whereas other stu-
dies suggest cost-effectiveness across liquid fuel engines as well as gas
engines [161,162]. However, systems cannot be retrofitted on every
vessel, even if they are commercially viable [160–166].
5.6. Exhaust treatment
Exhaust gas treatment is another option to decarbonise, albeit at an
early stage of development for CO2. NOX and SOX scrubbers are widely
used for ships using residual fuels, whilst much work is ongoing to
develop methane oxidation catalysts [163–169].
Potential routes exist for carbon capture and storage (CCS) to reduce
CO2 emissions from the exhaust. The Calix RECAST design involves
scrubbing exhaust gas to capture 85–90% of the CO2, and using the heat
generated in the exothermic reaction to provide additional motive
power and increase fuel efficiency [166]. A dry lime scrubber would
produce inert limestone which could be scattered into the ocean. Any
surplus lime remaining in the used sorbent will remove additional
carbon from the oceans by converting to calcium bicarbonate, thus
reducing ocean acidity [167,168]. However, this is likely to be an en-
ergy-intensive process from a life cycle perspective; low-carbon lime
production would be required to deliver emissions reductions rather
than simply transferring emissions from one sector to another
[169,170]. Costs may be significant and more research is required on
the localised ecosystem impacts of increased pH [171].
6. Combined decarbonisation potential
The previous sections have outlined the multitude of technical and
operational options to decarbonise international shipping, and un-
certainties around the potential of each. This section summarises the
carbon mitigation potentials and reveals the opportunity for combina-
tions of fuels and efficiency measures to contribute to the IMO 50%
decarbonisation target. Fig. 12 summarises the carbon savings offered
by different fuels compared to HFO, and of other options that reduce
overall fuel consumption, based on a survey of studies. The figure
combines analyses from three industry reports [19,104,172], the earlier
sections of this study, and the systematic review from Bouman et al.
[19].
Broadly, there is much more variability in estimates of GHG from
fuel switching than there is from efficiency measures, with the excep-
tion of slow steaming. Particularly, the supposedly deeper dec-
arbonisation options from biofuels, hydrogen, nuclear and electric
propulsion all range from near complete decarbonisation to negligible
difference compared to HFO. This is likely due to their different feed-
stock supply chains which must be carefully understood prior to being
labelled low carbon.
LNG is likely to offer a relatively modest improvement compared to
HFO, typically resulting in 10% reduction in GHGs, but is arguably the
most viable short-term solution to reduce CO2 emissions considering
cost-effectiveness and available infrastructure. Conventional methanol
production from natural gas consistently results in increased emissions
compared to HFO, indicating that any methanol fuel must be derived
from low carbon sources (e.g. catalytic hydrogenation from renewable
hydrogen) if it is to become a decarbonising energy vector. The bio-
based fuels (bio-LNG, bio-methanol and bio-diesel) give wide ranges of
decarbonisation potential but typically above 70% reduction whereas
the integration of LNG and biofuel technology (bio-LNG) could offer up
to 90% in a reduction of CO2, provided that the bio-LNG supply chain
exhibits low environmental and social impacts [173]. Thus, whilst in-
frastructural costs to implement LNG may be large, the additional in-
corporation of bio-LNG may represent a palatable option both en-
vironmentally and economically.
This study estimates that nuclear gives almost 100% decarbonisa-
tion, whereas using grid electricity is dependent on the regional gen-
eration mix [104]. This paper’s estimate (yellow bar) is based on the
principle that ships would recharge in ports, and so calculates the
average carbon intensity of electricity at the world’s 100 largest ports
[174], weighting each port by the shipping volume in 2015 [175]. The
weighted average is currently 577 ± 199 gCO2/kWh, but this would
fall by 10% if China were excluded.
Efficiency improvement measures may reduce impacts on average
by 5–30%. Moderate efficiency gains may be made by each option, but
the largest contributor is via slow-steaming (up to 60%) [31,136,140].
Indeed, it has been highlighted as a critical step in meeting future
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
81
decarbonisation targets [27,176]. The incorporation of wind and solar
assistance (up to 32%) and improvements in ship design (up to 24%)
give substantial benefits also. Notably, none of these options are mu-
tually exclusive, either across these options or in conjunction with the
fuel options, thus benefits are compounded if combined.
To estimate the combined impact of changing fuels and im-
plementing efficiency measures, this study uses the improvement esti-
mates given in Fig. 12 via a Monte Carlo simulation to determine the
compounded benefits under different combinations of decarbonising
measures. The emissions reductions from each fuel and efficiency op-
tion were simplified to a normal distribution with mean and standard
deviation taken from all the studies in Fig. 12. Each fuel was considered
with combinations of the five efficiency measures categorised in
Fig. 11, sampled across all possible permutations.
The results are illustrated in Fig. 13 which shows the probability of
meeting a 50% and 80% GHG reduction target compared to HFO by
implementing different fuels combined with different efficiency mea-
sures (from zero efficiency measures to including all five categories).
The error bars represent the minimum and maximum probabilities from
the different permutations of options.
For LNG-fuelled ships to comply with a 50% GHG reduction com-
pared to HFO, strong efficiency measures are required. To achieve a
50% likelihood of achieving 50% reductions with LNG, all efficiency
categories must be implemented. The bio-based fuels require little ef-
ficiency improvement to meet a 50% target, although limited bio-re-
source availability may further incentivise the uptake of efficiency
measures to reduce consumption. Further, for the bio-LNG routes, ef-
ficiency measures are required to reach climate targets due to the po-
tential presence of methane emissions which have a strong climate
impact.
It must be noted here that this study does not account for the in-
terrelation between efficiency measures here. Particularly the impact of
slow steaming on both wind assistance and hydrodynamics. Slower
vessel speeds result in an improved contribution from wind assistance,
which compounds parallel improvements. However, slower speeds may
reduce the impact of some hydrodynamic measures such as hull coat-
ings where higher speeds improve performance. Further work on
modelling vessel and fuel improvements would serve to better under-
stand the multiple improvement pathways.
Combined fuel and efficiency improvements are shown to poten-
tially drastically reduce GHG emissions [19], which is corroborated by
the IEA’s estimate of the contribution to decarbonising international
shipping from a selection of measures (Fig. 14) [53]. The study suggests
the main contributors are efficiency improvements which increase ship
capacity and utilization, as well as through vessel and engine design
and operational measures. Across the international shipping fleet wind
assistance would only contribute up to 15%, whereas switching 50% of
the fleet to advanced biofuels would result in a reduction of 16%.
In conclusion, specific technological and operational measures that
would meet the decarbonisation requirements of the maritime industry
could be met via combinations of several pathways. This would cer-
tainly be achievable with a new fleet with globally supportive legisla-
tions and policies, but the current fleet may require costly retro-fitting
mechanisms to enable said solutions. Ultimately, a combination of
technology, fuels and operational measures must be enabled by effec-
tive, globally enforced policies.
7. Decarbonisation policies
Given that the EEDI and SEEMP are likely to make only a modest
impact on reducing GHG emissions alongside projected industrial
growth to 2050 [27], stronger policy measures are required to meet
emerging carbon targets. Potential policies include stronger efficiency
targets, speed limits, fuel-standards or broader market-based mechan-
isms [177]. The broad options for decarbonisation are covered in the
following section, followed by discussion of existing mechanism pro-
posals and an analysis of the pros and cons of these options.
7.1. Policy options to decarbonise shipping
Policy options can be divided in three categories:
1. The emissions price control approach, in which the participant reacts
to a charge or fluctuation in price (that is linked to emissions) [178].
This includes:
(a) environmental taxes, fees, or charges;
(b) charges “en route”; and
(c) environmentally differentiated port or fairway dues.
2. The emissions quantity control approach, where the participants
abide by emissions limits or the right to emit and allow trading of
these “quantities”. This includes:
(a) credit programs;
(b) benchmarking programs; and
(c) cap-and-trade programs.
Fig. 12. Ranges of GHG emissions reductions via the use of alternative fuels (left panel), and from incorporating various efficiency measures (right panel). Alternative
fuels are presented relative to the use of conventional fossil liquid fuels, HFO and MDO. Light bars represent the range from each study (1st/3rd quartile from
Bouman, min/max otherwise), and dark horizontal bars represent the median. Data from [19,104,172].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
82
3. Subsidies, where funding is made available for qualifying dec-
arbonisation measures.
7.1.1. Emissions price controls
A tax placed on the purchase of fuel at the point of sale may be an
effective route for reduction of emissions from shipping [28], where
environmental charges are based on the quantity and/or quality of the
pollutant(s) [28,179]. The US state of Washington has imposed an en-
vironmental fuel tax on marine fuels to encourage improvements of the
state’s waterways. However, there is a risk this method failing from its
vulnerability to 'carbon leakage’, which is defined as the increase in
emissions outside a region as a direct result of a policy to cap emissions
within the region [180]. By taking fuel on board from areas outside of
where the tax is enforced, the operator of the ship can avoid paying the
tax [28,181].
Unlike environmental charges, a price set “en route” would be de-
termined by the emission rates, as opposed to fuel quantities. Closely
echoing the en route policy already established in the aviation sector
for many years, this approach may be highly applicable to maritime
shipping.
7.1.2. Emissions quantity controls
Credit-based trading programs provide operators with credits to
manage their emissions to meet a required level [178]. This may be an
extension of established cap-and-trade programs, allowing operations
from different sectors of the market to join an existing trading program.
However, credits should only be provided to measures that reduce
emissions substantially below a certain level and may require regular
evaluation as technologies, operations and efficiencies change. A trade-
0%
20%
40%
60%
80%
100%
LNG Methanol Bio-LNG Bio-Methanol Bio-Liquids Electricity
Likelihood of 50% GHG reduction 0 1 2 3 4 5
Numberof efficiency measures:
0%
20%
40%
60%
80%
100%
LNG Methanol Bio-LNG Bio-Methanol Bio-Liquids Electricity
Likelihood of 80% GHG reduction 0 1 2 3 4 5
Numberof efficiency measures:
Fig. 13. Probability of meeting the 50% GHG emission reduction target (top) and a stronger 80% target (bottom) via the use of alternative fuels alongside com-
binations of 5 different efficiency measures (renewable assisted propulsion, slow steaming, hydrodynamics, engine design and ship design).
WB2DS
RTS
2DS
0
200
400
600
800
1000
1200
1400
1600
2010 2020 2030 2040 2050 2060
Annual shipping emissions (MtCO2e)
Avoided fossil fuels
Capacity growth
Efficiency: new ships
Efficiency: retrofits
Wind assistance
Biofuels
8%
13%
26%
15%
16%
–
–
–
–
–
Fig. 14. IEA pathway to reduce global shipping emissions by 50% by 2050,
highlighting the trajectories anticipated in their scenarios: Reference
Technology Scenario, two Degree scenario (2DS) and well below two degree
scenario (WB2DS). The contribution from the major efficiency and fuel change
measures in 2060 are shown inset to the right. Data from [53].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
83
off exists between creating incentives high enough to motivate ship-
owners to participate (given the scheme is voluntary) but not so high
that credits are awarded to projects with limited additional contribu-
tion to decarbonisation.
Benchmarking trading programmes sets an average emissions level
that cannot be exceeded [178]. These are typically flexible in nature,
where such schemes inherently engage in offsetting as opposed to
elimination of emissions, thus it is imperative that an appropriate
benchmark is set to enable effective overall emission reductions
[28,182].
A cap-and-trade program creates a total aggregated cap on emis-
sions. Allowances are allocated to emitters and once regulators have
fixed a cap, every emitter is free to trade. Similar to benchmarking
programs, it may be more cost-effective for emitters to invest in emis-
sions reductions technologies instead of purchasing allowances.
7.1.3. Subsidies
Subsidies may be delivered through various mechanisms to provide
direct financial support to industry sectors from either the government,
or in the case of shipping, maritime authorities. Subsidy mechanisms
include grants, low-interest loans, favourable tax treatment, tendering
systems, and other financial assistance for products with desirable en-
vironmental characteristics [183]. For example, Transport Canada of-
fers subsidies under its Freight Technology Incentives Program which
aims to lower GHG emissions output by reducing fuel consumption and
encouraging the employment of energy efficient technologies [28].
Another example was the Port of Hamburg, which for a limited period
offered publicly funded discounts to port dues to ships fulfilling certain
emissions criteria [183].
7.2. Market based mechanism proposals
By 2010, several proposals from various member states had been
submitted to the Maritime Environment Protection Committee (MEPC),
aligned with IMO principles [184]. Norway recommended a sector-
wide cap on net emissions from international shipping and a trading
system alongside this, which suggested exemptions should be made for
voyages to Small Island Developing States (SIDS). France provided a
similar proposal, but also targeted auction design. The UK suggested
that the ETS proposal employ a two-phase approach, with the initial
phase being one where emissions are offset [185].
Under the proposed US Ship Efficiency and Credit Trading, instead
of a cap on emissions or a surcharge on fuel, all ships would be subject
to mandatory energy efficiency standards, enforced via an efficiency-
credit trading programme [186]. Similar to the EEDI, it sets efficiency
standards for both new and existing ships which remain committed to
reduction from the established baseline [186]. Japan and the World
Shipping Council (WSC) have proposed efficiency-targeted standards as
opposed to an ETS or bunker levy favoured in other countries. The
Energy Incentive Scheme (EIS) sets a standard that also mirrors the
EEDI baseline, and administers supplementary costs to ship-owners,
operators or consumers in line with the amount of fuel consumed for
non-compliance. The International Union for Conservation of Nature
(IUCN) proposes to compensate developing countries for the potential
financial impact of an MBM via eligibility to rebate mechanisms.
Since 2010, the EU have legislated that shipping will be brought
into the EU-ETS by 2023 in the absence of action from the IMO by 2021
[27]. Any ships that arrive at EU ports would need to comply to this
legislation. It may be that this action provides a catalyst for a globally
applicable shipping ETS.
7.3. Assessment of policy options
These main policy options are discussed below in terms of the main
advantages and disadvantages, and are summarised in Table 3.
A carbon tax represents high economic and environmental
efficiency in theory, but may result in a cap on development, and po-
tentially a shift away from marine to higher-carbon transport routes
(aviation and road). A disadvantage of price-control approaches is the
risk of carbon leakage. Although nation states may initiate a taxation
system, a ship remains a territorial extension of a country whose flag it
flies and jurisdiction it will be under. However, ships are able to change
this legal jurisdiction and register to flags of convenience with better
tax rates, lower compliance to safety, and potentially less liability to
carbon regulation [188]. To negate evasions and competitive distor-
tions, it is vital that market-based measures for maritime transport are
globally applied [189].
A quantity control mechanism such as an ETS has two key benefits.
Firstly, its flexible nature enables the cap to vary, but gives certainty on
the emissions reductions achieved. Due to the highly cyclical nature of
the industry, a variation in the demand for allowances influences the
price of emissions therefore it is essential to set an appropriate cap.
Secondly, it may be cost-efficient in comparison to the ‘charging’ al-
ternatives, producing an environmental benefit at least cost.
The deployment of a marine emission-trading scheme (METS) pre-
sents several challenges. A cap-and-trade policy can confront partici-
pants and regulators with high transaction costs related to trading,
monitoring, enforcement, and verification. The volume of allowances
traded may be lower with higher transactions costs, resulting in sub-
optimal trading [190]. The economic impacts may add a higher burden
to developing countries than to developed countries. A mitigation of
this disparity may be to apply a “common but differentiated responsi-
bility” principle in the international shipping sector [26]. This can be
resolved through the employment of an agreed rebate mechanism, in
which developing countries could recover the costs.
Credits are pre-certified and approved before they are released for
trading, which helps to reduce the risk of carbon leakage among
members. Other variables to monitor include ship location, emissions
factors, activity and energy consumption. Ship-owners may save al-
lowances when mitigation is cheaper, to utilise for the future when high
reduction costs arise, moderating the effect of price volatility on the
ETS. However, there is a risk that borrowing against credits may result
in firms simply offsetting emissions rather than actually reducing them.
Thus, if a maritime ETS were to be implemented, borrowing may need
to be restricted by quantity or time limits [191].
Providing direct financial support through subsidy has been very
effective in other sectors, can move swiftly, and can target technologies
or interventions [192]. In addition there are several examples of sub-
sidies in the shipping sector that might guide future policy development
[178,183]. However, subsidies must be carefully implemented and
monitored, and revised where conditions change, as seen in other tar-
geted support mechanisms such as feed-in tariffs in the electricity
generation sector [192].
In conclusion, a range of policy options exist to drive decarbonisa-
tion in the shipping sector. A maritime ETS has the potential to provide
cost-efficient emissions reductions, but must be designed accordingly
with respect to auditing processes. The flexible nature of a METS will
allow for individual ship-owners to employ their own choice of mea-
sures as opposed to a taxation scheme. To address the capital cost of
mitigation options, subsidy schemes such as differentiated port dues
and incentive schemes could be employed to accelerate the low-carbon
transition. Administrative costs could unfairly burden some countries,
but could be prevented by a rebate system where ETS revenues are
partly re-distributed amongst developing countries as well as towards
climate change funds. Lastly, carbon leakage risks eliminating the po-
tential benefits of METS and requires stringent regulation through in-
dependent external bodies. However, some have argued that im-
plementing a market-based mechanism is unlikely in the short term,
and should be examined as a longer-term option [26].
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
84
8. Conclusion
This study reviewed the potential for a multitude of options to
decarbonise international shipping, including fuels, energy efficiency
technologies, operations and policies. There is no single route to fully
decarbonising the maritime industry, so a multifaceted response is re-
quired. While rooted within a complex international regulatory fra-
mework, decarbonisation could be supported by long-term, consistent
and effective policy to enable the industry to effectively reduce emis-
sions.
Liquified natural gas (LNG) is the main alternative to marine diesel
and heavy fuel oil (MDO and HFO), and could provide a cost-effective
reduction in CO2 emissions whilst meeting SOx and NOx emissions
regulations. However, the greenhouse gas (GHG) benefit is reduced by
methane slip, with an overall reduction of 8–20% compared to HFO and
MDO. LNG is currently cheaper than the incumbent marine fuels, but
infrastructure must be expanded to increase market share. LNG cannot
be used in isolation to meet a 50% reduction in GHG emissions, but
must be combined with efficiency measures such as slow steaming,
wind assistance, or even blended with bio-LNG.
Biofuels have great potential as a renewable source of energy and
would be most commercially viable when used in conjunction with
other liquid or gaseous based fuels. However, emissions, costs and ap-
plicability vary widely across different biofuels and the long-term ra-
mifications of a dependency on biofuels for transport could be ulti-
mately detrimental to achieving a sustainable industry.
Due to the emissions profile and flexibility of hydrogen as a fuel, the
potential to reduce emissions in shipping and enable renewable in-
dustries is high, for example by utilising on-shore nuclear and renew-
able power generation to store hydrogen. The capital-intensive infra-
structure requirements may leave hydrogen as a longer-term solution,
but it may be more economically feasible to initially select a specific
large vessels (e.g. tankers) and ‘point to point’ routes to be hydrogen
fuelled, minimising infrastructural requirements. Nuclear propulsion
could almost completely decarbonise shipping and is suitable for vessels
that require a high-density energy source with long journeys, but safety
and security concerns are likely to persist as the main barrier for
commercial shipping. Renewable sources of energy such as solar and
wind have potential to increase the efficiency of vessels and assist
propulsion, thus reducing fuel consumption. With developing energy
storage technologies and improved designs small ships, there may be a
fleet in the future able to run on very little conventional fuel.
Even with conventional fuels, various efficiency measures can offer
significant decarbonisation potential. Slow-steaming reduces fuel con-
sumption and CO2 emissions by 20–30%, and up to 60% at the extreme.
Longer voyage time may result in higher inventory costs and may need
to be financed and insured for a longer period of time, but can improve
reliability of scheduling. Antifouling paints can be used as a barrier
against biofouling and reduce drag, but further work is needed to
quantify the cost-benefit and potential contribution to reducing emis-
sions from the fleet. Waste heat recovery from ship drivetrains may
achieve fuel savings of around 4–16%.
There is evidently a cost-emission trade-off, where the most cost
effective options such as LNG currently only offer modest improve-
ments in GHG emissions. A balance between cost-effective fuels and
improved efficiency measures is essential in minimising costs. To
achieve a 50% likelihood of achieving 50% GHG reductions with LNG-
fuelled ships, all five categories of efficiency measures must be im-
plemented together. The bio-based fuels however require little effi-
ciency improvement to meet a 50% target, although limited bio-re-
source availability and complications in ensuring sustainability across
the full fuel life-cycle may further incentivise the uptake of efficiency
measures to reduce consumption.
With a growing maritime sector, applying a cap on global shipping
emissions would ensure this growth is re-routed towards sustainable
pathways. A credit-trading based mechanism would provide flexibility
(appeasing maritime agents) and give room for industry to develop and
select from various options. The revenue generated from credit-based
approaches can contribute to investments such as further research in
climate change projects, funding infrastructure necessary for LNG and
other alternative fuels, and compensating developing countries that are
unfairly burdened by a cap. However, most important to the maritime
sector, these revenues can fund the subsidies and incentives required
for emissions reductions and increasing efficiencies. Stringent regula-
tion will be required to limit the risk of carbon leakage.
Ultimately, it is essential that the route to decarbonisation in-
corporates a combination of fuels, technology and policy and that the
various combinations of each cater to both short-term and long-term
approaches. With LNG being economically feasible, technologically
secure and guaranteeing environmental benefits in the short term, a
combination of subsidies and port dues can effectively accelerate its
implementation. However, further consideration is still needed to drive
the use of nuclear, renewables and hydrogen in the long term. Both
approaches can be complimented by energy efficiency schemes, both
technology- and policy-related; however, it is vital that an overarching
policy be introduced in the short-term to drive the rapid and equitable
decarbonisation that this important sector vitally needs.
Declaration of interests
The authors declare that there is no conflict of interest.
Acknowledgements
Funding for the Sustainable Gas Institute is gratefully received from
Royal Dutch Shell, Enagás SA, and from the Newton/NERC/FAPESP
Sustainable Gas Futures project NE/N018656/1. Funding through the
EPSRC project EP/R045518/1 is gratefully acknowledged. Note that
funding bodies were not involved in the design, implementation or
reporting of this study.
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Glossary
BAU: Business as usual
ECA: Emission control area
EEDI: Energy Efficiency Design Index
EP: electric propulsion
ETS: Emission Trading Scheme
FOC: Flag of convenience
HFO: heavy fuel oil
IGF Code: International Gas Fuelled Ship Code
IMO: International Maritime Organisation
IMS: International Maritime Services
IPPC: Integrated Pollution Prevention and Control
ITF: International Transport Workers’ Federation
MARPOL: Maritime Agreement Regarding Oil Pollution
MBM: Market-based mechanism
MDO: Marine Diesel Oil
MEPC: Maritime Environment Protection Committee
METS: Maritime Emission Trading Scheme
MGO: Marine Gas Oil
RoRo: Roll on – Roll off Ship
SCR: Selective Catalytic Reduction
WHRS: Waste Heat Recovery Systems
WSC: World Shipping Council
P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88
88

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How to decarbonise international shipping.pdf

  • 1. Contents lists available at ScienceDirect Energy Conversion and Management journal homepage: www.elsevier.com/locate/enconman Review How to decarbonise international shipping: Options for fuels, technologies and policies Paul Balcombea,b,⁎ , James Brierleyc , Chester Lewisd , Line Skatvedtc , Jamie Speirsa,e , Adam Hawkesa,b , Iain Staffellc a Sustainable Gas Institute, Imperial College London, London SW7 1NA, UK b Department of Chemical Engineering, Imperial College London, SW7 2AZ, UK c Centre for Environmental Policy, Imperial College London, London SW71 NE, UK d E4tech, 83 Victoria St, Westminster, London SW1H 0HW, UK e Department of Earth Science and Engineering, Imperial College London, SW7 2BP, UK A R T I C L E I N F O Keywords: Decarbonisation target LNG Biofuels Efficiency Slow-steaming Market-based mechanisms A B S T R A C T International shipping provides 80–90% of global trade, but strict environmental regulations around NOX, SOX and greenhouse gas (GHG) emissions are set to cause major technological shifts. The pathway to achieving the international target of 50% GHG reduction by 2050 is unclear, but numerous promising options exist. This study provides a holistic assessment of these options and their combined potential to decarbonise international shipping, from a technology, environmental and policy perspective. Liquefied natural gas (LNG) is reaching mainstream and provides 20–30% CO2 reductions whilst minimising SOX and other emissions. Costs are fa- vourable, but GHG benefits are reduced by methane slip, which varies across engine types. Biofuels, hydrogen, nuclear and carbon capture and storage (CCS) could all decarbonise much further, but each faces significant barriers around their economics, resource potentials and public acceptability. Regarding efficiency measures, considerable fuel and GHG savings could be attained by slow-steaming, ship design changes and utilising re- newable resources. There is clearly no single route and a multifaceted response is required for deep dec- arbonisation. The scale of this challenge is explored by estimating the combined decarbonisation potential of multiple options. Achieving 50% decarbonisation with LNG or electric propulsion would likely require 4 or more complementary efficiency measures to be applied simultaneously. Broadly, larger GHG reductions require stronger policy and may differentiate between short- and long-term approaches. With LNG being economically feasible and offering moderate environmental benefits, this may have short-term promise with minor policy intervention. Longer term, deeper decarbonisation will require strong financial incentives. Lowest-cost policy options should be fuel- or technology-agnostic, internationally applied and will require action now to ensure targets are met by 2050. 1. Introduction Maritime shipping is a key component of the global economy re- presenting 80–90% of international trade [1,2]. Sea transport emits less carbon dioxide per tonne-km compared to other forms of transport [3–5], but given its sheer scale, the maritime sector is a major con- tributor to global ecological impacts [6]. The shipping industry is re- sponsible for emitting approximately 1.1 Gt of carbon dioxide (3% of global greenhouse gas emissions), as well as 2.3 Mt of sulphur dioxide and 3.2 Mt nitrogen oxides per year [7–9]. For context, if the maritime industry were a country, it would be the 6th largest CO2 emitter worldwide (ahead of Brazil and Germany). For this reason, the International Maritime Organisation (IMO) (the UN agency for shipping) has established a target for global shipping to decarbonise by at least 50% from 2008 levels by 2050 [10]. Similarly, Maersk (the world’s largest shipping container company) has an- nounced its intentions to be net-zero carbon by 2050, with carbon neutral vessels commercially viable by 2030 [2]. This environmental impacts of shipping are set to rise as world seaborne trade is anticipated to grow by around 3% per year into the early 2020s [11]. Even ambitious decarbonisation scenarios see energy consumption growing by 40–50% between 2015 and 2050 [12], whilst other sectors proceed with decarbonising rapidly. Maritime freight is responsible for 12% of global transport energy demand (see Fig. 1), https://doi.org/10.1016/j.enconman.2018.12.080 Received 1 October 2018; Accepted 15 December 2018 ⁎ Corresponding author at: Sustainable Gas Institute, Imperial College London, London SW7 1NA, UK. E-mail address: [email protected] (P. Balcombe). Energy Conversion and Management 182 (2019) 72–88 0196-8904/ © 2018 Elsevier Ltd. All rights reserved. T
  • 2. totalling approximately 13 million TJ in 2015, or 1.4 kWh per person per day globally [13]. Consequently, the sector is placed in a unique position to not only contribute to climate change mitigation by directly reducing emissions, but also by becoming leaders in climate innovation and enabling the decarbonisation of other energy sectors via develop- ment of low carbon fuel infrastructure. However despite this, the sector has been largely unregulated until recently [6]. Stringent targets have been put in place to significantly reduce NOx and SOx air-quality-related emissions [15] and, crucially, in 2018 the IMO set a target for global shipping to decarbonise by at least 50% from 2008 levels by 2050 [10]. As with other sectors, there is no silver bullet solution to dec- arbonisation. It is likely that halving carbon emissions will require a range of options, including new fuel sources, raising technical or op- erational efficiencies and reducing demand. Shipping has undergone paradigm shifts in fuel before, from coal to diesel in the 1920s and from diesel to heavy fuel oil (HFO) in the 1950s [16]. Liquefied natural gas (LNG) is the main alternative fuel to liquid fossil fuels, offering reduced air quality impacts and direct CO2 emissions, although methane emis- sions have been shown to reduce the GHG benefit [17]. Other alter- natives include biofuels, methanol, hydrogen, electric propulsion or even nuclear fuels, but each offer differing levels of decarbonisation and incur different economic costs as well as pollutants relating to air quality. Likewise, various efficiency measures exist that would reduce the fuel consumption per unit distance, particularly the act of slow steaming. But their impact on efficiency depends on various factors such as the class of vessel and its application. This study reviews the different combinations of fuels, technologies and policies that may be used to reduce GHG emissions from interna- tional shipping. For each option, the emissions reduction potential is quantified and feasibility from a technical, economic and political perspective is assessed. Combinations of possible reduction measures are assessed and recommendations are made in terms of effectiveness and economic-political feasibility. The focus of this study is on com- mercial shipping, particularly with respect to international trade given the anticipated growth resulting from increasing population and eco- nomic development. Existing literature has included broad estimates of global shipping decarbonisation routes [3,18], as well as some specific estimates of emission reduction measures relating to energy efficiency or vessel design [3,19,20], or from alternative fuels [21,22]. In particular, Bouman et al. [19] summarise a large proportion of literature on the potential emissions reductions associated with energy efficiency, ship design and fuel changes. They suggest a combination of technologies would result in large reductions and that the knock-on impacts of other non-CO2 emissions (such as methane, NOX and SOX) must also be considered. Yuan et al. [23] estimated global CO2 savings from a se- lection of energy efficiency measures under uncertainty, whilst a few studies estimate the cost-effectiveness and emissions-reduction poten- tial of energy efficiency measures [24] and fuels for the global fleets [25]. Many studies also analyse the policy mechanisms that may achieve shipping decarbonisation such as market-based mechanisms (MBMs) and further efficiency improvement legislation [3,27–29]. This review adds to this body of literature by providing an up-to-date as- sessment of the current status of shipping and emissions, investigating a broad selection of fuel, technical and operational emission reduction options, and providing a policy assessment to provide insight into how to achieve a 50% GHG emissions reduction target. The contribution of this study is to inform pathways to achieve deep decarbonisation, to highlight the mechanisms with greatest potential to reduce emissions and to identify critical research gaps. In the next section, the current state of the maritime industry is outlined, with respect to fleets, fuels, emissions and current regulatory frameworks. Sections 3 and 4 quantify the potential impacts associated with dif- ferent fuel switches, including liquefied natural gas (LNG, Section 3), renewables and nuclear options (Section 4). Section 5 evaluates the impact of various energy efficiency measures, before the policy me- chanisms to achieve emissions reductions are assessed in terms of current status and future potential. The combined emissions reductions associated with different combinations of reduction measures are as- sessed in Section 7, before conclusions and recommendations for technical and regulatory change are made in Section 8. 2. The current status of international shipping Globally there are around 52,000 merchant ships contributing to international shipping of goods and passengers (see Fig. 2). For a sense of scale, these ships are propelled by over 500 GW of engine capacity [29], more than Europe’s entire fleet of fossil-fuelled power stations [30]. There is significant heterogeneity across the merchant fleet with different services, ships, fuels, emissions and regulations, thus there is no one-size-fits-all decarbonisation solution. The following describes Fig. 1. Breakdown of energy usage in the transport sector globally in 2015. The outer ring gives the share of individual modes, the middle and inner rings ag- gregate these uses. Data from [13]. 0 5000 10000 15000 20000 0 50 100 150 200 Number of Vessels (MtCO2) Carbon emissions Fig. 2. Number of merchant ships and their carbon emissions, by category in 2017. Ferry includes passenger and passenger-RoRo (roll-on roll-off). Data from [29]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 73
  • 3. current status of international shipping regarding emissions, fuel use and regulatory environments. 2.1. Current emissions from shipping In 2014, international shipping emitted 1130 Mt CO2, which ac- counts for 3.1% of global CO2 emissions [31]. As shown in Fig. 3, shipping emissions have consistently increased since 1990, largely in line with global trade increases. However the contribution to total emissions has actually decreased from 2007 to 2014, largely due to growth in other non-shipping emissions rather than decarbonised shipping, particularly growth in emissions from coal-fired electricity generation in China and India [31]. The greatest source of GHG emissions within shipping are from container ships, bulk carriers and oil tankers, as shown in Fig. 2. This is due to these vessels conducting longer journeys to deliver their cargo – international and intercontinental, rather than domestic and coastline routes [31]. The spatial distribution of these emissions is shown in Fig. 4, and covers most of the oceans and seas in the northern hemi- sphere. The emissions from shipping is dependent on fuels and efficiencies: different fuels have varying CO2, SOx, NOx and methane emissions, and inefficient ships use more fuel. Of the approximately 300 Mt of global maritime fuel consumption in 2015, 72% was residual fuels (e.g. heavy fuel oil HFO), 26% distillates (e.g. marine diesel oil) and 2% liquefied natural gas (LNG) [34]. HFO typically has a high sulphur content [35] and the contribution of international shipping to global SOx emissions in 2012 was calculated to be 13% annually [36]. SOx emissions cause health implications, as well as causing ecosystem damage via acid- ification to water and soil [37]. In 2009, The Guardian reported that the largest 15 ships caused more sulphurous pollution than the global car fleet (760 m cars) combined [38]. Sulphurous and nitrogen oxide emissions have a short-lived climate cooling effect, meaning the net impact of shipping over 20 years (based on a single year’s emissions) is actually to reduce global temperatures [39]. However, the longer-term impact of GHG emissions from shipping is certainly to rise. Distillate fuels like marine gas oil (MGO) and diesel oil (MDO) have lower sulphur content, whereas GHG and NOx emis- sions, which arise from high temperature combustion, may be similar [21,40,41]. Marine black carbon emissions also have large impacts on the cli- mate and to human health. Black carbon is a type of fine particulate (PM2.5) that is emitted from burning HFO and to a lesser extent MDO. The GWP of black carbon varies depending on location and source, but in aerosol form has a 100 year GWP of 830 [39]. As a solid particle, atmospheric lifespan is short at ∼1 week [42] but global shipping emissions of black carbon account for 5–8% of annual GHG emissions on a 100 year timescale according to the ICCT [43]. 2.2. International shipping governance The IMO is a UN agency responsible for the safety and environ- mental regulation of global shipping; it has 172 Member States and three Associate Members [44]. IMO regulations must be ratified by over half of the member states, which are then translated into domestic law. However, the compliance process is complicated by the flag state of the respective ship and the concept of ‘flags of convenience’ (FOC). FOC are those characterised by low taxation and lower regulatory measures in place and began in the 1920s when US ship owners began to register their ships in Panama after being frustrated by increased regulations and rising labour costs. As of 2015, over 55% of global gross tonnage in the international shipping industry is registered in the top 12 FOC states, as identified by the International Transport Workers’ Federation (ITF). The regional Port State Control (PSC) authorities monitor the FOCs and quantify their credibility and compliance levels. 2.3. Shipping emission regulations The key regulation for controlling environmental impacts from shipping is the Maritime Agreement Regarding Oil Pollution (MARPOL) for SOX, NOX and GHG emissions. The regulation originally focused on SOX, limiting sulphur content in bunker fuel to 4.5% and gradually dropping over time as shown in Fig. 5. The global sulphur content limit is set to be reduced substantially in 2020 to 0.5%, however, the global average sulphur content of HFO has not materially changed in ac- cordance with targets [16]. The IMO (through MARPOL) also set up Emission Controlled Areas (ECA), within which vessels must comply with stricter emission limits [46]. Currently there are four ECAs, in Europe and North America, which also set limits on NOx and particulate emissions [47]. MARPOL Annex VI, introduced in 1997 and strengthened in 2005 [48], in- corporates regulatory limits on NOx emissions. Different tiers of com- pliance apply to ships with different construction dates as indicated in Fig. 5, although the most stringent tier III regulations only apply to ships operating in ECAs [49]. Another addition to MARPOL in 2001 was the Energy Efficiency Design Index (EEDI), to reduce CO2 emissions for new ships via tech- nical efficiency improvements [50]. EEDI sets a minimum energy effi- ciency level per capacity mile (e.g. tonne mile) for different ship types and sizes [7]. Setting the target of a 10% reduction of CO2 levels (grams of CO2 per tonne mile) by 2015, 20% by 2020 and 30% by 2025, the EEDI aims to facilitate innovation and technological improvements in shipping by tightening the target every 5 years [50,51]. The Ship En- ergy Efficiency Management Plan (SEEMP) was also introduced into MARPOL, for both new and existing ships, as a measure to improve fuel efficiency via operational improvements [48]. However, whilst there is a requirement to implement the plan, no specific fuel savings or effi- ciency improvements are stipulated [52]. The EEDI is currently the sole carbon emissions policy to mitigate CO2 emissions in international shipping and it is estimated that the global shipping fleet will not be fully EEDI compliant until 2040–2050 0 10 20 30 40 50 60 70 80 90 0 200 400 600 800 1000 1200 1400 1600 1800 1990 1995 2000 2005 2010 2015 Carbon emissions from shipping(MtCO2) Global Trade (trilliont-km) Global trade ($ trillion) 2.5% 3.0% 3.5% 1990 1995 2000 2005 2010 2015 Share of global carbon emissions from shipping Fig. 3. CO2 emissions from global shipping set against global trade (top panel); and the relative share of CO2 emissions that come from shipping (bottom panel). Data from [3,9,31,32]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 74
  • 4. [51]. However, the reductions are negligible compared to the levels required to meet the UN 2050 global climate change targets [31]. 2.4. The 50% GHG emission target In 2018, the IMO announced an initial agreement to reduce GHG emissions by 50% by 2050 compared to 2008 emissions [10], with a solidified strategy to be produced in 2023. This target should not be underestimated in terms of its challenge, as well as potential benefit to global decarbonisation pathways. Business-as-usual GHG emissions from the maritime industry are expected to increase significantly in the first half of this century, with IMO emission scenarios projecting growth between 50% and 250% by 2050 – depending on economic growth and development [31]. Reductions in emissions could be sourced from in- creasing the efficiency of vessels, such as via the EEDI, or a step change in fuel usage. Alongside the IMO agreement, various policy measures were sug- gested for the short- (2018–2023), medium- (2023–2030) and long- term (beyond 2030). Short-term measures include strengthening the EEDI, incentivising early adoption of low carbon technologies, in- centivising speed reduction/optimisation, developing carbon intensity guidelines for all marine fuels and research into innovative technologies and fuels for zero-carbon propulsion. Mid and long-term measures are to further develop the short-term measures and to consider im- plementing market-based-mechanisms to incentivise emissions reduc- tions. The multitude of technical measures to meet emissions targets, and the political and infrastructural means by which to implement them, are multifaceted and are reviewed in depth for the remainder of this paper. 3. Liquified natural gas (LNG) One pathway to comply with SOx and NOx requirements and to reduce CO2 emissions is via LNG as a fuel. Natural gas is liquefied by cooling to −162 °C and thus takes up 600 times less space for storage and transportation [54]. There are four main types of LNG engine/ turbine in use today: lean-burn spark ignition; low pressure dual fuel (4- and 2-stroke); high pressure dual fuel; and gas turbine [55]. Each have different operational characteristics, efficiencies and exhibit sig- nificantly different emission profiles [55]. LNG has been used for the propulsion of LNG carrier vessels for more than 40 years, by using the boil-off gas created in the storage tanks to run dual-fuel engines [56]. Fig. 4. Map showing the global distribution of greenhouse gas emissions from shipping. Based on the intensity of shipping lane usage from [33] normalised to 2013 emissions from the sector. 0% 1% 2% 3% 4% 5% 2000 2005 2010 2015 2020 2025 Sulphur content Global limit ECA limit Global HFO average 0 2 4 6 8 10 12 14 16 18 0 500 1000 1500 2000 Engine rated speed (rpm) NOX emissions limits (g/kWh) Tier I (2000) Tier II (2011) Tier III (2016) Fig. 5. Sulphur and nitrogen oxides (NOX) regulations for shipping fuels. In the left panel, lines show the MARPOL Annex VI limits for open seas and in emissions control areas (ECAs); points show the global average in HFO fuel [3,16,31]. In the right panel, lines show the limits as a function of engine speed for open seas (Tier II) and control areas (Tier III) [45]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 75
  • 5. The first dedicated LNG-fuelled vessel was built in 2000. In 2017, there were 117 LNG-fuelled vessels (non-LNG carriers) in commercial operation, with many new LNG-fuelled vessels currently under pro- duction [55,57]. Current vessels are mainly operate in Europe due to the expansive ECAs, and most new vessels are planned in Europe (57%) and North America (38%) due to emissions regulations and underlying fuel prices [58,50]. 3.1. Environmental impacts The potential benefits of LNG over conventional liquid fuels relate chiefly to NOx, SOx, particulates and CO2 emissions. Natural gas has a higher hydrogen-carbon ratio than liquid fossil fuels [59], resulting in 20–30% lower CO2 emissions on combustion [60]. However, the re- lative improvement in CO2 emissions may be negated by methane emissions, in particular through engine slip [21,55]. Slip occurs where some methane fails to combust in the engine, resulting in leakage to the atmosphere [56]. Additionally, leakage may occur in other parts of the drive train, as well as across the natural gas supply chain in general [50,61,62]. Methane is a potent, albeit short-lived, greenhouse gas and has a global warming potential (GWP) 36 times stronger than CO2 on a 100-year time horizon [39]. Currently, LNG engines have a methane slip of 2–5% of total throughput, although estimates from high-pressure dual fuel 2-stroke are substantially lower [57,63]. There are various estimates of life cycle GHG emissions from using LNG as a shipping fuel [17,21,67–69], a summary of which is given in Fig. 6 including the impact of upstream supply chain and ship bun- kering and operation. Upstream impacts arise from resource extraction, processing and liquefaction and transportation, while downstream emissions are from combustion and leakage (slip). Studies typically estimate a relative decrease in emissions by switching from distillate (e.g. MDO) or residual fuel (HFO) to LNG of approximately 8–20%. Upstream emissions chiefly arise from the energy-intensive liquefaction process, which may use 8–12% of the natural gas throughput as fuel duty [66], as well as methane emissions from the supply chain. Emis- sions from the ship are governed by the engine efficiency and the en- gine methane slip [67]. Therefore, reductions in methane emissions are imperative if LNG is to contribute to the 50% GHG reduction target. If the total methane emissions were 5.5% over its life cycle, then the global warming potential of LNG would the equal that of HFO, MDO or MGO [57]. LNG does not contain sulphur, meaning that the SOx emissions are theoretically reduced to zero. In dual-fuel engines a small fraction of oil-based fuel is needed for ignition [59] but reductions in SOx emis- sions may still reach 90–99% compared to HFO [55,68]. Particulate matter (PM) is also almost completely eliminated [56]. NOx emissions are significantly lower in a low-pressure dual-fuel engine system than liquid fuels. NOx emissions are dependent on the combustion temperature, with higher temperatures resulting in more NOx. A lean fuel-to-air ratio achievable with some LNG engines and the higher proportion of gas with a dual fuel engine enables a lower com- bustion temperature [69] and reduced NOx emissions of 75–90% re- lative to HFO [55,59,68]. However, there is a trade-off between NOx and methane emissions: low temperatures favour low NOx emissions, while higher temperatures result in less methane slip. For high pressure dual fuel engines, methane slip may be reduced to ∼0.2% of throughput [63], but NOx emissions would not meet tier 3 standards without further exhaust treatment [55]. For dual-fuel engines, the relationship between fuel blend and CO2 emissions is broadly linear, but significant NOx emission reductions are only seen below a 30% share of diesel [69]. Therefore without addi- tional exhaust gas treatment technologies, for example selective cata- lytic reduction (SCR), the proportion of oil fuel will be limited by the NOx emissions regulations set out in the NOx ECAs. 3.2. Fuel costs for LNG The North American shale gas boom and resultant fall in gas price has increased the viability of LNG as a marine fuel outside Europe [70]. Fig. 7 shows the average fuel prices for different available shipping fuels, assuming current average engine efficiencies: LNG = 6.2 kWh/kg fuel [55,63]; HFO = 5.0 kWh/kg [21,65]; MDO = 5.4 kWh/kg [21,63,65]; methanol = 2.5 kWh/kg. After 2008, the freight market went into recession whilst bunker prices spiked, leading a search for alternative fuel sources [50]. In 2015 the HFO price dropped again, but even with increased competitiveness in the prices, there is still interest in LNG as a marine fuel due to the environmental drivers. The price of LNG is generally lower than HFO, whereas MDO is approximately 50% more expensive than HFO. However, the price of LNG as a marine fuel includes much uncertainty, through variable gas prices and the cost of new LNG infrastructure required for international 0 100 200 300 400 500 600 700 800 GHG emissions (gCO2e/kWh) Combustion (534 ± 73) Upstream (116 ± 67) Total (650 ± 64) Fig. 6. Various estimates of GHG emissions from LNG-fuelled ship engines ex- pressed per kWh of engine output, split into upstream supply chain and ship emissions. Data from: [17,21,67–69]. $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20 2000 2005 2010 2015 Fuel cost (USD/kWh) Methanol MDO HFO LNG (LPDF 4-stroke) Fig. 7. Average fuel costs for each year for different fuels per kWh of engine output. LPDF 4-stroke = low pressure dual fuel 4 S run on LNG. Average fuel costs per tonne from [14,75–81] are converted to engine output using standard engine efficiencies. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 76
  • 6. trade routes [50,70]. These added costs are estimated to be between 50 USD/t and 630 USD/t on top of the indexed gas prices [70]. 3.3. Capital costs for LNG Table 1 shows the capital costs (CAPEX) for the engine and exhaust technologies associated with various fuels. The cost associated with MGO engine conversion is relatively small [70], whereas Wang and Notteboom [60] estimate the capital cost for an LNG-fuel vessel relative to an oil-fuel equivalent is 20–25% more expensive. However, the cost of the LNG propulsion technologies may lower as technology produc- tion rates increase [78]. LNG storage tanks require approximately twice the volume of the conventional bunker tanks for the same energy content, due to the density difference. This can cause issues when retrofitting and a hull modification may be needed [56], thus it is technologically and eco- nomically favourable to design LNG systems for new-build projects [70]. The cost of adding port infrastructure may also be significant [79]. LNG propulsion have the largest economic advantage for those vessels operating for the highest proportion of their sailing time in the ECAs. Most vessel voyages are categorised either as those that spend greater than 80% of their sailing time in the ECA zones and those that spend less than 5% of their time in ECA zones [56]. For those that spend less than 5% of their time in ECA zones, there is little incentive to switch to LNG propulsion as they may continue to use HFO and switch to MDO for the short periods of time in ECAs and ports [50]. Consequently, the current emissions standards are not satisfactory to create economic incentives large enough to cause a fuel change to LNG in the larger vessels with more global voyages. 4. Alternative fuels Whilst LNG offers advantages over liquid fossil fuels via reduced air quality emissions, it may not be enough to meet more stringent climate targets. Nuclear, renewables and biofuels also have potential to reduce shipping CO2 emissions and range from economically feasible short- term options to less developed long-term options. Fig. 8 shows the range of literature estimates of life cycle GHG emissions for different ship fuels. Broadly, biofuel options (bio-LNG, biomethanol and other bio-liquids) exhibit the lowest emissions, whilst conventional methanol fuel exhibits the highest emissions. Each alternative fuel is discussed in the following section, with respect to their environmental and eco- nomic credentials, as well as resource/political availability. 4.1. Biofuels Biofuels may offer large GHG emission reductions and in some cases can be used as a ‘drop-in’ fuel, requiring very little alteration to the incumbent engines [84]. First generation conventional biofuels are readily available today in significant quantities, including straight ve- getable oil (SVO), hydrotreated vegetable oil (HVO), fatty acid methyl ester (FAME) and bio-ethanol. However, the use of conventional bio- fuels is restricted internationally due to sustainability issues associated with large scale production. The use of waste oils can mitigate these concerns but the availability of waste oils for large scale production are a barrier. Advanced biofuels use feedstocks with fewer sustainability con- cerns. The most applicable advanced biofuels to international shipping applications are Fischer-Tropsch diesel (FT-Diesel), pyrolysis oil, ligno- cellulosic ethanol (LC Ethanol), bio-methanol, dimethyl-ether (made of bio-methanol) and bio-LNG. In general, advanced biofuels have lower GHG emissions than conventional biofuels, as shown in Fig. 9. The figure shows a broad range of emissions estimates both across and Table 1 Cost of installing fuel technologies to current ships and new builds. Data from [70]. MGO = marine gas oil; SCR = selective catalytic reduction; EGR = exhaust gas recirculation; Values in 2012 US Dollars. Compliance strategy Retrofit cost Newbuild cost MGO – engine conversion, SGR, EGR $180,000 + $75/kW $140,000 + $63/kW HFO and scrubber – scrubber and SCR $600/kW $2200/kW LNG four stroke duel fuel – LNG tanks, etc. $800/kW $1600/kW LNG two stroke dual fuel – LNG tanks, etc. $700/kW $1500/kW LNG four stroke spark ignition – LNG tanks, etc. $800/kW $1600/kW 0 200 400 600 800 1000 GHG emissions (gCO2 e/kWh) Range Mean Individual studies Fig. 8. Literature estimates of total life cycle GHG emissions for different ca- tegories of fuels. Blue circles represent individual literature estimates, red bars represent mean value for each category. Data from [17,21,41,67–69,84–87]. 0 100 200 300 400 500 600 700 800 GHG emissions (gCO2e/kWh) Range Mean Individual studies Fig. 9. Overview of GHG emissions for comparison of selected biofuels and fossil fuels. Data from [82,85]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 77
  • 7. within the biofuel categories. Note that the lowest values for FAME and HVO are using waste oils. Biofuels could help to achieve NOX, SOX and GHG emissions re- duction targets. All biofuels contain very little sulphur [82]. FAME for example has very low sulphur content (∼20 ppm) and exhibits lower NOX and PM emissions than marine gas oil [83]. Additionally, biofuels are biodegradable which is an advantage over fossil fuels with respect to accidental spills [82]. Diesel-like fuels, such as SVO, HVO, FAME, FT-diesel and pyrolysis oil can be used in current marine diesel engines with no or small engine modifications and can also use the current storage and bunkering in- frastructures [82]. Alcohols and gaseous fuels like bio-ethanol, bio- methanol, bio-LNG and bio-DME require more significant changes to engine, storage and bunkering infrastructure, incurring additional ca- pital costs. They all require spark ignition engines, dual fuel compres- sion ignition engines or converted compression ignition engines, given their lower cetane number (with the exception of DME) and cannot self- ignite [86]. A barrier to biofuels uptake is the price differential between in- cumbent fuels like HFO, MDO and the biofuels. For example, the IEA estimate a 2016 FAME price of 1040 USD/t and HVO of 542 USD/t, effectively double the fuel price of their fossil counterparts MDO (482 USD/t) and HFO (290 USD/t), respectively [84]. Costs are higher for advanced biofuels with the larger GHG emission savings and fewer sustainability concerns, due to the complexity and immaturity of the production processes. There is also disagreement on whether current GHG emission ac- counting practices are fit for purpose [87]. The magnitude of biogenic carbon emissions factors vary considerably over time [88], signalling the need for strong oversight of supply chains and forest management [89]. Given differing agricultural and processing requirements, and the variability across different biofuel sources, ensuring low environmental impacts across the biofuel supply chain is a major challenge. Strong legislative frameworks and incentives for bioenergy, for example via the EU’s Renewable Energy Directive, is one way to mandate sustain- able practices [82]. However, some national and regional policies are not yet in favour of biofuels and the current classification does not differentiate between biogenic carbon and fossil carbon content in the Energy Efficiency Design Index (EEDI) [82]. The wider implications of biofuels involve complex trade-offs in utilising resources that involve human essentials such as food and water [90]. The global potential for biofuels will be heavily constrained once vital crops and land needed to supply food for a growing world popu- lation are accounted for, which includes constraints on water and fer- tilizers to grow second-generation fuel crops [91]. Some studies have even omitted biofuels from global sustainable energy scenarios due to the potential for air pollution during cultivation and reprocessing, and because carbon neutrality may be unobtainable due to the sacrifice of forests for arable land. Nevertheless, in practice, second-generation biofuels are likely to play some role for transport in conjunction with renewable electricity [92], but will not be capable of meeting the total demand [91]. In summary, biofuels offer compatible replacements to the incum- bent fossil marine fuels in the short- and medium term. The GHG re- duction potential is higher for second generation biofuels, where FT- diesel and pyrolysis oil are compatible with diesel infrastructure. Other second-generation fuels such as LC ethanol, bio-methanol, DME and bio-LNG would require much larger changes to engines, storage and infrastructure. The cost and availability of the biofuels, particularly advanced biofuels, is a barrier and they will not compete with fossil fuel alternatives, unless a strong GHG reduction policy, or carbon price, is introduced. Even then, resource must be managed to ensure impacts on broader agriculture and food resources are minimised. 4.2. Methanol Methanol fuel for ships has received some attention and there is currently one marine engine available that may run on methanol as a dual fuel. To date (2018) there are 7 methanol-fuelled ships in opera- tion, with another 4 planned to be in operation by 2019 [93]. Methanol combustion in marine engines produces modest CO2 reductions and low emissions of other pollutants, relative to HFO or MGO [21,41]. Stena Germanica, the world's first methanol-powered sea vessel, is suggested to have reduced SOX emissions by 99%, NOx by 60%, particulates by 95% and CO₂ by 25%, thus complying with the latest ECA regulations on its Baltic Sea route [94]. Methanol can be produced from many sources, including natural gas, from catalytic hydrogenation of a waste CO2 stream or from bio- mass. In the case of a biomass feedstock, CO2 emissions are biogenic and may be discounted (see Section 4.1 for discussion). However, the methanol supply chain produces significant emissions depending on its feedstock and process. The use of methanol from natural gas results in significantly lower air quality emissions, but life cycle GHG emissions are around 10% higher than from HFO or MDO (see Fig. 8), due to the natural gas supply chain, gas reforming and methanol synthesis. If waste CO2 is to be used (with renewable hydrogen) to produce me- thanol, great care must be taken in carbon accounting: it is not ne- cessarily appropriate to suggest that, if it is a thermogenic waste pro- duct, emissions are discounted. Thus, life cycle emissions associated with methanol from catalytic hydrogenation may be significant, but no studies that estimate emissions from this production route were found. The cost of methanol as a fuel is greater than liquid fossil fuels and LNG, as shown in Fig. 7. Thus, whilst air quality emissions may be significantly reduced, the carbon credentials of methanol fuel must be proven and then incentivised to encourage further uptake. 4.3. Hydrogen with marine fuel cells Fuel cells are an efficient way of producing low carbon electricity [95], but the availability of hydrogen and its low volumetric energy density require significant additional infrastructure and system design [91]. Hydrogen fuel cells exhibit no direct greenhouse gas emissions, but emissions associated with the hydrogen supply chain must be considered. Feedstock impacts are highly variable, be it renewable electrolysis, natural gas reforming or biomass gasification [96,97]. This is demonstrated in Fig. 8, where three estimates of total GHG emissions from H2 fuel cells exhibit high variability (from 113 to 997 gCO2eq./ kWh), with the low emissions using renewable electrolysis, the central emissions using natural gas with carbon capture and storage (CCS), and the highest value using natural gas reforming without CCS [21]. An advantage of fuel cells is that they generate little noise or vi- brations, whilst marine ecosystems are currently affected by the highly acoustic nature of shipping [98]. The silent electric motors for pro- pulsion have a high efficiency (∼95%) and when combined with ∼45% efficient fuel cells show a significant improvement over internal combustion engines [98]. A diesel generator and micro gas turbine requires 44% more fuel than a fuel cell of the same output power [99]. There are relatively few hydrogen fuel cell ships in operation today, with DNV GL recording 23 fuel cell shipping projects at different stages of development in 2017 [100]. The first civilian ship to utilise fuel cell technology for supplementary propulsion was the Viking Lady. Main propulsion was provided by LNG in a diesel engine, with a fuel cell that operated on hydrogen or methanol (with reconfiguration). This system reduced SOX by 100%, NOX by 85% and CO2 by 20% [101]. The ‘ZemShip’ (Zero Emission Ship) FCS Alsterwasser, a hydrogen fuel cell ship based in Hamburg’s port, has 100 passenger capacity and a power rating of 100 kW for operation on rivers and small waterways [102]. Storage of hydrogen is typically as a compressed gas (upto 700 bar), as a liquid (cryogenic) or in solid state (metal hydrides) [98]. Large storage volumes may be a barrier to implementation, particularly for P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 78
  • 8. retrofits. Table 2 shows the cargo volume and mass impacts for hy- drogen versus HFO and LNG: liquid hydrogen requires 8 times more storage volume than HFO and 30 times more for compressed hydrogen. Hydrogen could also be stored as liquid ammonia, which does not re- quire such low temperatures (–33 °C cf. –254 °C for liquid hydrogen), giving reduced parasitic energy requirements [103]. Ammonia could be used directly for propulsion, either via a combustion engine or in a fuel cell [104]. No technologies have yet been commercialised for marine operation, although some dual fuel engines are under development [105,106]. Cargo shipping must comply with the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code), but the IGC code does not currently allow for the trans- portation of liquid hydrogen. Changes to the code are being developed and cargoes not covered by the code can be carried if there is an agreement between relevant nations [109]. For example, Australia and Japan recently signed a memorandum at the Australian Maritime Safety Authority (AMSA) which permits liquid hydrogen to be shipped in bulk for the first time [109]. Prohibitive capital costs for new infrastructure are a barrier to global commercialisation. Some natural gas infrastructure could be used for hydrogen, which could drastically reduce capital costs, parti- cularly in countries with a gas-grid network [110]. Hydrogen fuel costs are higher, potentially by an order of magnitude, than conventional fuels [107], but this gap should decline as electrolysers fall in cost [111]. Estimates of retail costs for hydrogen vary from around 0.06 to 0.24 USD/kWh fuel energy content with an average of 0.12 USD/kWh [112], reflecting a wide range of potential feedstocks and conversion processes. In comparison, the 2017 estimate for MDO was 0.04 USD/ kWh energy content (not including energy efficiency losses as depicted in Fig. 7). Thus, strong incentives are needed to encourage uptake of hydrogen. The cost of introducing hydrogen could be reduced by selecting a small number of large vessels that are limited to point-to-point routes between highly developed ports with the available infrastructure (e.g. Rotterdam and Tokyo) or within a small geographic area (e.g. North Sea) [113]. However, despite the potential of some fuel cell technolo- gies, the high-power demand required to propel large ships is not yet viable with current fuel cell technology and so will not replace the existing multi megawatt main engines of large ships in the foreseeable future [114]. 4.4. Electric propulsion systems As with the propulsion in hydrogen fuel cell ships, electric propul- sion (EP) systems feature an electric motor supplied by a device that contains a stored form of electrical energy [92]. The environmental impact is determined by the source of the stored energy, for example stored hydrogen or electrical energy can be produced from fossil fuels. Regardless, developing the required infrastructure could increase the industry’s flexibility, creating a potentially low carbon pathway. The company ‘Norwegian Electric Systems’ (NES) is currently developing and integrating hybrid engines and EP systems [115]. Two of its ferries shall be operating on routes with strict emission requirements as de- signated by the Norwegian Road Authorities, which has resulted in the development and deployment of an EP system using chargeable lithium ion batteries [115]. No economic assessments of electric propulsion ships were found to date, but cost-effectiveness will be governed pri- marily by battery costs, which are falling rapidly [116], and the cost of electricity or fuel used for charging. 4.5. Nuclear marine propulsion Nuclear fuel offers high power density with low and stable fuel prices, very low greenhouse gas and air quality emissions, and the ability to operate for long periods without refuelling. Nuclear propul- sion is achieved via a small onboard nuclear plant heating water to raise steam, which drives steam turbines and turbo generators. While used extensively for military warships and submarines, the development of a civilian nuclear fleet faces many hurdles with public and political perception, legislation and training, and safety against catastrophic accidents, terrorism and non-proliferation. In 2016, it was estimated that 166 naval reactors are in operation: 85 owned by the US, 48 by Russia and 33 across the rest of the world [117]. To date there have only been four commercial nuclear vessels; the Russian Sevmorput is currently the only one active [118]. However, this ship experiences restrictions in which ports it can visit, due to ci- vilian evacuation plans and fears at docks [119]. Uptake in the com- mercial sector could utilise small modular reactor (SMR) technology, sized at a few hundred MW [120], but remain an early-stage concept [121]. An example is the ‘RITM-200′ reactor for icebreakers such as the NS Arktika, with a seven-year refuelling cycle. The cost, with two 175 MW steam generators is approximately $1.9 billion per vessel [120,122]. However, control of nuclear material is a significant security and geopolitical concern. Highly-enriched uranium (30–90% U235) is used in Russian naval reactors and could be subverted into an improvised weapon [117]. Proposals to limit the use of highly-enriched uranium in the civilian sector are progressing with support of the International Atomic Energy Agency [120], and other nations’ civilian nuclear vessels have used low-enriched uranium. Safety concerns may be an insurmountable barrier to wider adop- tion. There are seven nuclear power reactors at the bottom of the ocean due to naval incidents, and the US Navy has released radioactive water during fuelling operations [123]. Further challenges involve the dis- tribution, testing and monitoring of technologies and components needed for reactors, fuel production and decommissioning [121]. Re- tired nuclear vessels are ultimately still stored afloat, indicating that a permanent solution has not been established [121]. Due to public perception, the lack of precedent and shortfalls in legislative frame- works, trained personnel and infrastructure, the potential for large scale deployment before 2050 is low. 5. Vessel efficiency improvements Several operational and technological changes could reduce ship- ping emissions (and fuel use) via increased efficiency, such as the use of wind propulsion assistance, slow steaming, low resistance hull coatings and waste heat recovery systems. Each are described below with respect to their decarbonisation potential, costs and applicability. 5.1. Wind assistance Wind power is being widely developed through both conventional sails and modern alternatives. These include Flettner rotors, kites or spinnakers, soft sails, wing sails and wind turbines [124]. They cannot provide a typical ship’s total propulsion power by themselves, but as Table 2 Cargo volume and mass impacts for different fuels, for a vessel with a 5.1 day range. Data from [107,108]. Fuel HFO LNG Compressed hydrogen Liquid hydrogen Density (kg/m3 ) 1010 470 23.7 72.4 Daily fuel use (m3 ) 83 203 1186 522 Fuel mass for voyage (t) 421 485 140 140 Tank volume (m3 ) 417 1195 12,140 3120 Mass of tanks (t) – 450 8584 972 Containers displaced – 96 372 180 Volume displaced (m3 ) – 3700 14,340 6939 Weight displaced (t) – 1258 4878 3123 P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 79
  • 9. wind speeds are generally highest in the high seas [125], they allow large fuel savings whilst maintaining full speed [104,126]. Wind pro- pulsion is most effective at slower speeds (e.g. less than 16 knots) [127] and on smaller ships (3000–10,000 tonnes) [128], which account for one-fifth of global cargo ships. The compatibility of different designs varies between ship classes due to potential interference with cargo handling [124,129]. Various studies have estimated fuel savings across a wide range: 2–24% for a single Flettner rotor, 1–32% for a towing kite [129], up to 25% for the eConowind sails (which pack into a single container) [130] and some estimate savings from 10 to 60% at slow speeds [127]. Sev- eral shipping companies have trialled adding sails to cargo vessels [131], but gradual uptake is not predicted until 2025 due to their re- lative immaturity [124]. Additionally, unfamiliarity with technology, safety and reliability concerns, as well as a lack of demonstration have been primary barriers to broad adoption across a relatively risk-averse industry [132]. No data on capital costs were found for the installation of wind assistance systems as they are at an early stage of development, but the potential fuel savings are large and further research is required to determine cost-effectiveness under different operational conditions and ship types. 5.2. Solar assistance Several carriers are also testing solar assistance, including hybrid sail systems which utilize both wind and sunlight to preserve limited deck area. Examples include automated kite sails from SkySails, a 3000 tonne ‘zero-emission’ cargo carrier vessel from B9 Shipping, and the UT Wind Challenger hybrid freighter with nine solar sails [131], the EMP Aquarius [133] and Nichioh Maru [104]. The attainable energy would only be sufficient to augment the auxiliary power demands [124,134], while the erosion of solar panels by the salty marine environment also poses a barrier. The potential CO2 reduction reported in different studies for solar energy generation on- board vessels range from 0.2 to 12% [19], while wind-solar hybrid systems may increase fuel savings to 10–40% [131]. As with wind as- sistance, no capital or operating cost data were found and further re- search is required to determine potential cost-effectiveness. 5.3. Slow steaming Full speed for a container ship is normally between 23 and 25 knots (44 km/h); slow steaming is defined as 20–22 knots (39 km/h), extra slow as 17–19 knots (33 km/h) and super slow as 15 knots (28 km/h) [135]. Slow steaming lengthens round-trip time by 10–20% depending on the service route and port times [136], but reduces fuel consumption and CO2 emissions by raising vessel efficiency, as shown in Fig. 10 [135–142]. Longer transport times associated with slower speeds means more ships or load is required, which reduces the saving. However, a 10% reduction in speed may result in a total average emissions re- duction of 19% [20]. The benefits of slow steaming are varied across different ship types, sizes, routes and duties [139]. Additionally, slow steaming alters engine operating conditions, which could increase fouling and corrosion due to low operating temperatures and poor combustion [137,138]. Fouling of the hull also impacts the drag of the vessel that again will increase fuel consumption. Cariou [140] estimates that slow steaming reduced emissions by 11% from container ships between 2008 and 2010. The greatest re- duction was for vessels on large trade routes (multi-trade and Europe/ Far East), in contrast to smaller trades such as Australia/Oceania re- lated trades which are subject to less slow steaming [140]. The IMO suggests that container ships, oil tankers and bulk carriers reduced their specific fuel consumption by 30% between 2007 and 2012 through slow steaming [31]. As shippers and freight forwarders move to 'just-in-time' delivery, slow steaming may improve the reliability of scheduling, as vessels can speed up to make up time if needed. Slow steaming could also absorb excess fleet capacity during periods of slack demand: in 2010 for ex- ample, 40% of potentially excess capacity was absorbed by slow steaming [137]. Fuel costs provide a significant incentive to slow steam, accounting for up to 50% of total operating costs, and is anticipated to rise with the introduction of climate related policies [141]. However, while slow- steaming for fossil-fuelled ships can reduce costs, the benefits are not necessarily felt by cargo owners unless those lower fuel costs translate into lower freight rates [142]. Thus slow steaming may require regulation or incentive [140]. A regulated global speed restriction would decrease emissions sig- nificantly, but may be unpopular [139], hard to achieve [137,143] and may even deliver perverse results [140]. Speed reductions via de-rating engines are covered via the EEDI [144], and may be an option if emissions reduction targets are increased in the future. A bunker levy or broader market-based mechanism may be more suitable for giving in- dustry flexibility in achieving reductions specific to each case [139,143]. 5.4. Paints and hull coatings A smooth hull is important for efficient operation and minimising fuel consumption. Bacteria attached to the underwater surface of ships attracts larger organisms, such as seaweed, bivalves and mussels (see Fig. 11). These increase a ship’s drag coefficient, slowing it down and 90 100 110 120 130 140 150 160 8.0 8.5 9.0 9.5 Fuel consumption (kg/km) Speed (m/s) 26% − Fig. 10. Fuel consumption of sea vessels versus average speed. Data from [136]. Fig. 11. Fouling costs upon the attachment to ship hull which cause serious problems in shipping industry. Reproduced with permission from Editec Group. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 80
  • 10. increasing fuel consumption [145–151]. Slime can add 1–2% to drag, weed adds up to 10%, and the heaviest fouling can increase fuel con- sumption by 40–50% [147–153]. The average surface roughness of a typical ship hull increases by 40 μm/year, which translates to 1–1.2% per year increase in fuel consumption [149]. Paints and hull coating can minimise the skin friction component of resistance, and significant capital is invested in anti-fouling paints to prevent bacteria from attaching to the hull [150,151]. These have anti- corrosion and anti-fouling properties to protect against seawater and marine organisms [152], and have been used for many decades [145,147]. Tin-based marine coatings were widely used in the 1960–1970s containing tributyltin (TBT) compounds that were detrimental to the environment [145]. The degradation of TBT in the marine environment causes numerous effects, such as endocrine disruption leading to sexual disorders, including imposex in dog whelks [124,145,151,153], leading to international legislation banning their use [147,154]. To date it has not been possible to match TBT coatings in terms of performance, cost and ease of application, but research is ongoing to find ecologically benign alternatives. Modern coatings can be broadly classed as either biocide based [153]: • Insoluble matrix (epoxy, polyester, vinyl ester); • Soluble matrix (self-polishing, ablative, hybrid); or biocide free: • Fouling release (silicone elastomers); • Mechanical cleaning (epoxy/vinyl esters). Biocides prevent fouling attachment and growth, but may impact upon the environment. Unfortunately, their biocide output is greatest when the ship is at voyage and thus least vulnerable to fouling, causing excessive loss of biocide [153]. Silicone and fouling release technolo- gies are attractive biocide-free alternatives from an environmental perspective [153]. These paints are non-stick to prevent biofouling but are relatively expensive. They also lack the durability of the biocide based systems and are more difficult to apply [149]. However, given their environmental profile, these technologies will become increas- ingly important for control of marine fouling. 5.5. Waste heat recovery Around half of the heat energy produced by the power train is lost as ambient heat without doing any useful work [155,156]. Waste Heat Recovery Systems (WHRS) can convert heat from the exhaust and coolant into useful mechanical or electrical energy [157], with esti- mates of fuel savings in the range of 4–16% [155,156,158]. Several technologies are available with a range of efficiencies, notably Steam Rankine Cycle, Organic Rankine Cycle (ORC) and Kalina Cycle. The ORC uses an organic fluid for energy conversion [156] and forms the basis of most small-scale WHRSs due to simplicity, efficiency at low temperature differences, and moderate costs [159]. The Kalina Cycle uses a solution of ammonia and water, with different boiling points, for its working fluid. This allows more heat to be extracted, since boiling occurs over a range of temperatures in distillation [156]. A WHRS represents an additional capital cost but fuel savings may result in payback period of less than 3 years [160], whereas other stu- dies suggest cost-effectiveness across liquid fuel engines as well as gas engines [161,162]. However, systems cannot be retrofitted on every vessel, even if they are commercially viable [160–166]. 5.6. Exhaust treatment Exhaust gas treatment is another option to decarbonise, albeit at an early stage of development for CO2. NOX and SOX scrubbers are widely used for ships using residual fuels, whilst much work is ongoing to develop methane oxidation catalysts [163–169]. Potential routes exist for carbon capture and storage (CCS) to reduce CO2 emissions from the exhaust. The Calix RECAST design involves scrubbing exhaust gas to capture 85–90% of the CO2, and using the heat generated in the exothermic reaction to provide additional motive power and increase fuel efficiency [166]. A dry lime scrubber would produce inert limestone which could be scattered into the ocean. Any surplus lime remaining in the used sorbent will remove additional carbon from the oceans by converting to calcium bicarbonate, thus reducing ocean acidity [167,168]. However, this is likely to be an en- ergy-intensive process from a life cycle perspective; low-carbon lime production would be required to deliver emissions reductions rather than simply transferring emissions from one sector to another [169,170]. Costs may be significant and more research is required on the localised ecosystem impacts of increased pH [171]. 6. Combined decarbonisation potential The previous sections have outlined the multitude of technical and operational options to decarbonise international shipping, and un- certainties around the potential of each. This section summarises the carbon mitigation potentials and reveals the opportunity for combina- tions of fuels and efficiency measures to contribute to the IMO 50% decarbonisation target. Fig. 12 summarises the carbon savings offered by different fuels compared to HFO, and of other options that reduce overall fuel consumption, based on a survey of studies. The figure combines analyses from three industry reports [19,104,172], the earlier sections of this study, and the systematic review from Bouman et al. [19]. Broadly, there is much more variability in estimates of GHG from fuel switching than there is from efficiency measures, with the excep- tion of slow steaming. Particularly, the supposedly deeper dec- arbonisation options from biofuels, hydrogen, nuclear and electric propulsion all range from near complete decarbonisation to negligible difference compared to HFO. This is likely due to their different feed- stock supply chains which must be carefully understood prior to being labelled low carbon. LNG is likely to offer a relatively modest improvement compared to HFO, typically resulting in 10% reduction in GHGs, but is arguably the most viable short-term solution to reduce CO2 emissions considering cost-effectiveness and available infrastructure. Conventional methanol production from natural gas consistently results in increased emissions compared to HFO, indicating that any methanol fuel must be derived from low carbon sources (e.g. catalytic hydrogenation from renewable hydrogen) if it is to become a decarbonising energy vector. The bio- based fuels (bio-LNG, bio-methanol and bio-diesel) give wide ranges of decarbonisation potential but typically above 70% reduction whereas the integration of LNG and biofuel technology (bio-LNG) could offer up to 90% in a reduction of CO2, provided that the bio-LNG supply chain exhibits low environmental and social impacts [173]. Thus, whilst in- frastructural costs to implement LNG may be large, the additional in- corporation of bio-LNG may represent a palatable option both en- vironmentally and economically. This study estimates that nuclear gives almost 100% decarbonisa- tion, whereas using grid electricity is dependent on the regional gen- eration mix [104]. This paper’s estimate (yellow bar) is based on the principle that ships would recharge in ports, and so calculates the average carbon intensity of electricity at the world’s 100 largest ports [174], weighting each port by the shipping volume in 2015 [175]. The weighted average is currently 577 ± 199 gCO2/kWh, but this would fall by 10% if China were excluded. Efficiency improvement measures may reduce impacts on average by 5–30%. Moderate efficiency gains may be made by each option, but the largest contributor is via slow-steaming (up to 60%) [31,136,140]. Indeed, it has been highlighted as a critical step in meeting future P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 81
  • 11. decarbonisation targets [27,176]. The incorporation of wind and solar assistance (up to 32%) and improvements in ship design (up to 24%) give substantial benefits also. Notably, none of these options are mu- tually exclusive, either across these options or in conjunction with the fuel options, thus benefits are compounded if combined. To estimate the combined impact of changing fuels and im- plementing efficiency measures, this study uses the improvement esti- mates given in Fig. 12 via a Monte Carlo simulation to determine the compounded benefits under different combinations of decarbonising measures. The emissions reductions from each fuel and efficiency op- tion were simplified to a normal distribution with mean and standard deviation taken from all the studies in Fig. 12. Each fuel was considered with combinations of the five efficiency measures categorised in Fig. 11, sampled across all possible permutations. The results are illustrated in Fig. 13 which shows the probability of meeting a 50% and 80% GHG reduction target compared to HFO by implementing different fuels combined with different efficiency mea- sures (from zero efficiency measures to including all five categories). The error bars represent the minimum and maximum probabilities from the different permutations of options. For LNG-fuelled ships to comply with a 50% GHG reduction com- pared to HFO, strong efficiency measures are required. To achieve a 50% likelihood of achieving 50% reductions with LNG, all efficiency categories must be implemented. The bio-based fuels require little ef- ficiency improvement to meet a 50% target, although limited bio-re- source availability may further incentivise the uptake of efficiency measures to reduce consumption. Further, for the bio-LNG routes, ef- ficiency measures are required to reach climate targets due to the po- tential presence of methane emissions which have a strong climate impact. It must be noted here that this study does not account for the in- terrelation between efficiency measures here. Particularly the impact of slow steaming on both wind assistance and hydrodynamics. Slower vessel speeds result in an improved contribution from wind assistance, which compounds parallel improvements. However, slower speeds may reduce the impact of some hydrodynamic measures such as hull coat- ings where higher speeds improve performance. Further work on modelling vessel and fuel improvements would serve to better under- stand the multiple improvement pathways. Combined fuel and efficiency improvements are shown to poten- tially drastically reduce GHG emissions [19], which is corroborated by the IEA’s estimate of the contribution to decarbonising international shipping from a selection of measures (Fig. 14) [53]. The study suggests the main contributors are efficiency improvements which increase ship capacity and utilization, as well as through vessel and engine design and operational measures. Across the international shipping fleet wind assistance would only contribute up to 15%, whereas switching 50% of the fleet to advanced biofuels would result in a reduction of 16%. In conclusion, specific technological and operational measures that would meet the decarbonisation requirements of the maritime industry could be met via combinations of several pathways. This would cer- tainly be achievable with a new fleet with globally supportive legisla- tions and policies, but the current fleet may require costly retro-fitting mechanisms to enable said solutions. Ultimately, a combination of technology, fuels and operational measures must be enabled by effec- tive, globally enforced policies. 7. Decarbonisation policies Given that the EEDI and SEEMP are likely to make only a modest impact on reducing GHG emissions alongside projected industrial growth to 2050 [27], stronger policy measures are required to meet emerging carbon targets. Potential policies include stronger efficiency targets, speed limits, fuel-standards or broader market-based mechan- isms [177]. The broad options for decarbonisation are covered in the following section, followed by discussion of existing mechanism pro- posals and an analysis of the pros and cons of these options. 7.1. Policy options to decarbonise shipping Policy options can be divided in three categories: 1. The emissions price control approach, in which the participant reacts to a charge or fluctuation in price (that is linked to emissions) [178]. This includes: (a) environmental taxes, fees, or charges; (b) charges “en route”; and (c) environmentally differentiated port or fairway dues. 2. The emissions quantity control approach, where the participants abide by emissions limits or the right to emit and allow trading of these “quantities”. This includes: (a) credit programs; (b) benchmarking programs; and (c) cap-and-trade programs. Fig. 12. Ranges of GHG emissions reductions via the use of alternative fuels (left panel), and from incorporating various efficiency measures (right panel). Alternative fuels are presented relative to the use of conventional fossil liquid fuels, HFO and MDO. Light bars represent the range from each study (1st/3rd quartile from Bouman, min/max otherwise), and dark horizontal bars represent the median. Data from [19,104,172]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 82
  • 12. 3. Subsidies, where funding is made available for qualifying dec- arbonisation measures. 7.1.1. Emissions price controls A tax placed on the purchase of fuel at the point of sale may be an effective route for reduction of emissions from shipping [28], where environmental charges are based on the quantity and/or quality of the pollutant(s) [28,179]. The US state of Washington has imposed an en- vironmental fuel tax on marine fuels to encourage improvements of the state’s waterways. However, there is a risk this method failing from its vulnerability to 'carbon leakage’, which is defined as the increase in emissions outside a region as a direct result of a policy to cap emissions within the region [180]. By taking fuel on board from areas outside of where the tax is enforced, the operator of the ship can avoid paying the tax [28,181]. Unlike environmental charges, a price set “en route” would be de- termined by the emission rates, as opposed to fuel quantities. Closely echoing the en route policy already established in the aviation sector for many years, this approach may be highly applicable to maritime shipping. 7.1.2. Emissions quantity controls Credit-based trading programs provide operators with credits to manage their emissions to meet a required level [178]. This may be an extension of established cap-and-trade programs, allowing operations from different sectors of the market to join an existing trading program. However, credits should only be provided to measures that reduce emissions substantially below a certain level and may require regular evaluation as technologies, operations and efficiencies change. A trade- 0% 20% 40% 60% 80% 100% LNG Methanol Bio-LNG Bio-Methanol Bio-Liquids Electricity Likelihood of 50% GHG reduction 0 1 2 3 4 5 Numberof efficiency measures: 0% 20% 40% 60% 80% 100% LNG Methanol Bio-LNG Bio-Methanol Bio-Liquids Electricity Likelihood of 80% GHG reduction 0 1 2 3 4 5 Numberof efficiency measures: Fig. 13. Probability of meeting the 50% GHG emission reduction target (top) and a stronger 80% target (bottom) via the use of alternative fuels alongside com- binations of 5 different efficiency measures (renewable assisted propulsion, slow steaming, hydrodynamics, engine design and ship design). WB2DS RTS 2DS 0 200 400 600 800 1000 1200 1400 1600 2010 2020 2030 2040 2050 2060 Annual shipping emissions (MtCO2e) Avoided fossil fuels Capacity growth Efficiency: new ships Efficiency: retrofits Wind assistance Biofuels 8% 13% 26% 15% 16% – – – – – Fig. 14. IEA pathway to reduce global shipping emissions by 50% by 2050, highlighting the trajectories anticipated in their scenarios: Reference Technology Scenario, two Degree scenario (2DS) and well below two degree scenario (WB2DS). The contribution from the major efficiency and fuel change measures in 2060 are shown inset to the right. Data from [53]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 83
  • 13. off exists between creating incentives high enough to motivate ship- owners to participate (given the scheme is voluntary) but not so high that credits are awarded to projects with limited additional contribu- tion to decarbonisation. Benchmarking trading programmes sets an average emissions level that cannot be exceeded [178]. These are typically flexible in nature, where such schemes inherently engage in offsetting as opposed to elimination of emissions, thus it is imperative that an appropriate benchmark is set to enable effective overall emission reductions [28,182]. A cap-and-trade program creates a total aggregated cap on emis- sions. Allowances are allocated to emitters and once regulators have fixed a cap, every emitter is free to trade. Similar to benchmarking programs, it may be more cost-effective for emitters to invest in emis- sions reductions technologies instead of purchasing allowances. 7.1.3. Subsidies Subsidies may be delivered through various mechanisms to provide direct financial support to industry sectors from either the government, or in the case of shipping, maritime authorities. Subsidy mechanisms include grants, low-interest loans, favourable tax treatment, tendering systems, and other financial assistance for products with desirable en- vironmental characteristics [183]. For example, Transport Canada of- fers subsidies under its Freight Technology Incentives Program which aims to lower GHG emissions output by reducing fuel consumption and encouraging the employment of energy efficient technologies [28]. Another example was the Port of Hamburg, which for a limited period offered publicly funded discounts to port dues to ships fulfilling certain emissions criteria [183]. 7.2. Market based mechanism proposals By 2010, several proposals from various member states had been submitted to the Maritime Environment Protection Committee (MEPC), aligned with IMO principles [184]. Norway recommended a sector- wide cap on net emissions from international shipping and a trading system alongside this, which suggested exemptions should be made for voyages to Small Island Developing States (SIDS). France provided a similar proposal, but also targeted auction design. The UK suggested that the ETS proposal employ a two-phase approach, with the initial phase being one where emissions are offset [185]. Under the proposed US Ship Efficiency and Credit Trading, instead of a cap on emissions or a surcharge on fuel, all ships would be subject to mandatory energy efficiency standards, enforced via an efficiency- credit trading programme [186]. Similar to the EEDI, it sets efficiency standards for both new and existing ships which remain committed to reduction from the established baseline [186]. Japan and the World Shipping Council (WSC) have proposed efficiency-targeted standards as opposed to an ETS or bunker levy favoured in other countries. The Energy Incentive Scheme (EIS) sets a standard that also mirrors the EEDI baseline, and administers supplementary costs to ship-owners, operators or consumers in line with the amount of fuel consumed for non-compliance. The International Union for Conservation of Nature (IUCN) proposes to compensate developing countries for the potential financial impact of an MBM via eligibility to rebate mechanisms. Since 2010, the EU have legislated that shipping will be brought into the EU-ETS by 2023 in the absence of action from the IMO by 2021 [27]. Any ships that arrive at EU ports would need to comply to this legislation. It may be that this action provides a catalyst for a globally applicable shipping ETS. 7.3. Assessment of policy options These main policy options are discussed below in terms of the main advantages and disadvantages, and are summarised in Table 3. A carbon tax represents high economic and environmental efficiency in theory, but may result in a cap on development, and po- tentially a shift away from marine to higher-carbon transport routes (aviation and road). A disadvantage of price-control approaches is the risk of carbon leakage. Although nation states may initiate a taxation system, a ship remains a territorial extension of a country whose flag it flies and jurisdiction it will be under. However, ships are able to change this legal jurisdiction and register to flags of convenience with better tax rates, lower compliance to safety, and potentially less liability to carbon regulation [188]. To negate evasions and competitive distor- tions, it is vital that market-based measures for maritime transport are globally applied [189]. A quantity control mechanism such as an ETS has two key benefits. Firstly, its flexible nature enables the cap to vary, but gives certainty on the emissions reductions achieved. Due to the highly cyclical nature of the industry, a variation in the demand for allowances influences the price of emissions therefore it is essential to set an appropriate cap. Secondly, it may be cost-efficient in comparison to the ‘charging’ al- ternatives, producing an environmental benefit at least cost. The deployment of a marine emission-trading scheme (METS) pre- sents several challenges. A cap-and-trade policy can confront partici- pants and regulators with high transaction costs related to trading, monitoring, enforcement, and verification. The volume of allowances traded may be lower with higher transactions costs, resulting in sub- optimal trading [190]. The economic impacts may add a higher burden to developing countries than to developed countries. A mitigation of this disparity may be to apply a “common but differentiated responsi- bility” principle in the international shipping sector [26]. This can be resolved through the employment of an agreed rebate mechanism, in which developing countries could recover the costs. Credits are pre-certified and approved before they are released for trading, which helps to reduce the risk of carbon leakage among members. Other variables to monitor include ship location, emissions factors, activity and energy consumption. Ship-owners may save al- lowances when mitigation is cheaper, to utilise for the future when high reduction costs arise, moderating the effect of price volatility on the ETS. However, there is a risk that borrowing against credits may result in firms simply offsetting emissions rather than actually reducing them. Thus, if a maritime ETS were to be implemented, borrowing may need to be restricted by quantity or time limits [191]. Providing direct financial support through subsidy has been very effective in other sectors, can move swiftly, and can target technologies or interventions [192]. In addition there are several examples of sub- sidies in the shipping sector that might guide future policy development [178,183]. However, subsidies must be carefully implemented and monitored, and revised where conditions change, as seen in other tar- geted support mechanisms such as feed-in tariffs in the electricity generation sector [192]. In conclusion, a range of policy options exist to drive decarbonisa- tion in the shipping sector. A maritime ETS has the potential to provide cost-efficient emissions reductions, but must be designed accordingly with respect to auditing processes. The flexible nature of a METS will allow for individual ship-owners to employ their own choice of mea- sures as opposed to a taxation scheme. To address the capital cost of mitigation options, subsidy schemes such as differentiated port dues and incentive schemes could be employed to accelerate the low-carbon transition. Administrative costs could unfairly burden some countries, but could be prevented by a rebate system where ETS revenues are partly re-distributed amongst developing countries as well as towards climate change funds. Lastly, carbon leakage risks eliminating the po- tential benefits of METS and requires stringent regulation through in- dependent external bodies. However, some have argued that im- plementing a market-based mechanism is unlikely in the short term, and should be examined as a longer-term option [26]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 84
  • 14. 8. Conclusion This study reviewed the potential for a multitude of options to decarbonise international shipping, including fuels, energy efficiency technologies, operations and policies. There is no single route to fully decarbonising the maritime industry, so a multifaceted response is re- quired. While rooted within a complex international regulatory fra- mework, decarbonisation could be supported by long-term, consistent and effective policy to enable the industry to effectively reduce emis- sions. Liquified natural gas (LNG) is the main alternative to marine diesel and heavy fuel oil (MDO and HFO), and could provide a cost-effective reduction in CO2 emissions whilst meeting SOx and NOx emissions regulations. However, the greenhouse gas (GHG) benefit is reduced by methane slip, with an overall reduction of 8–20% compared to HFO and MDO. LNG is currently cheaper than the incumbent marine fuels, but infrastructure must be expanded to increase market share. LNG cannot be used in isolation to meet a 50% reduction in GHG emissions, but must be combined with efficiency measures such as slow steaming, wind assistance, or even blended with bio-LNG. Biofuels have great potential as a renewable source of energy and would be most commercially viable when used in conjunction with other liquid or gaseous based fuels. However, emissions, costs and ap- plicability vary widely across different biofuels and the long-term ra- mifications of a dependency on biofuels for transport could be ulti- mately detrimental to achieving a sustainable industry. Due to the emissions profile and flexibility of hydrogen as a fuel, the potential to reduce emissions in shipping and enable renewable in- dustries is high, for example by utilising on-shore nuclear and renew- able power generation to store hydrogen. The capital-intensive infra- structure requirements may leave hydrogen as a longer-term solution, but it may be more economically feasible to initially select a specific large vessels (e.g. tankers) and ‘point to point’ routes to be hydrogen fuelled, minimising infrastructural requirements. Nuclear propulsion could almost completely decarbonise shipping and is suitable for vessels that require a high-density energy source with long journeys, but safety and security concerns are likely to persist as the main barrier for commercial shipping. Renewable sources of energy such as solar and wind have potential to increase the efficiency of vessels and assist propulsion, thus reducing fuel consumption. With developing energy storage technologies and improved designs small ships, there may be a fleet in the future able to run on very little conventional fuel. Even with conventional fuels, various efficiency measures can offer significant decarbonisation potential. Slow-steaming reduces fuel con- sumption and CO2 emissions by 20–30%, and up to 60% at the extreme. Longer voyage time may result in higher inventory costs and may need to be financed and insured for a longer period of time, but can improve reliability of scheduling. Antifouling paints can be used as a barrier against biofouling and reduce drag, but further work is needed to quantify the cost-benefit and potential contribution to reducing emis- sions from the fleet. Waste heat recovery from ship drivetrains may achieve fuel savings of around 4–16%. There is evidently a cost-emission trade-off, where the most cost effective options such as LNG currently only offer modest improve- ments in GHG emissions. A balance between cost-effective fuels and improved efficiency measures is essential in minimising costs. To achieve a 50% likelihood of achieving 50% GHG reductions with LNG- fuelled ships, all five categories of efficiency measures must be im- plemented together. The bio-based fuels however require little effi- ciency improvement to meet a 50% target, although limited bio-re- source availability and complications in ensuring sustainability across the full fuel life-cycle may further incentivise the uptake of efficiency measures to reduce consumption. With a growing maritime sector, applying a cap on global shipping emissions would ensure this growth is re-routed towards sustainable pathways. A credit-trading based mechanism would provide flexibility (appeasing maritime agents) and give room for industry to develop and select from various options. The revenue generated from credit-based approaches can contribute to investments such as further research in climate change projects, funding infrastructure necessary for LNG and other alternative fuels, and compensating developing countries that are unfairly burdened by a cap. However, most important to the maritime sector, these revenues can fund the subsidies and incentives required for emissions reductions and increasing efficiencies. Stringent regula- tion will be required to limit the risk of carbon leakage. Ultimately, it is essential that the route to decarbonisation in- corporates a combination of fuels, technology and policy and that the various combinations of each cater to both short-term and long-term approaches. With LNG being economically feasible, technologically secure and guaranteeing environmental benefits in the short term, a combination of subsidies and port dues can effectively accelerate its implementation. However, further consideration is still needed to drive the use of nuclear, renewables and hydrogen in the long term. Both approaches can be complimented by energy efficiency schemes, both technology- and policy-related; however, it is vital that an overarching policy be introduced in the short-term to drive the rapid and equitable decarbonisation that this important sector vitally needs. Declaration of interests The authors declare that there is no conflict of interest. Acknowledgements Funding for the Sustainable Gas Institute is gratefully received from Royal Dutch Shell, Enagás SA, and from the Newton/NERC/FAPESP Sustainable Gas Futures project NE/N018656/1. Funding through the EPSRC project EP/R045518/1 is gratefully acknowledged. Note that funding bodies were not involved in the design, implementation or reporting of this study. References [1] Miola A, Ciuffo B. Estimating air emissions from ships: Meta-analysis of modelling approaches and available data sources. Atmos Environ 2011;45:2242–51. [2] Maersk. Maersk sets net zero CO2 emission target by 2050. In: Moller AP, editor; 2018. Table 3 The merits of different shipping decarbonisation policy options. Advantages Disadvantages Emissions price controls • Economic efficiency • Environmental efficiencya • Carbon leakage • Cap on development • Displacement to air or road Emissions quality controls • Flexibility • Economic efficiency • Transaction costs • Burden of additional costs on developing countries Subsidies • Can be targeted • Requires careful implementation and oversight • Need for revision when conditions change a Environmental efficiency can be defined as an efficiency measure that accounts for both economic and environmental factors [187]. P. Balcombe et al. Energy Conversion and Management 182 (2019) 72–88 85
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