Fuel Choice Regulation

...the Way to Narrow the Gap between Current IMO Marine Standard and 2025 Greenhouse Gas Emission Target

by Leong Ka Long Karen, 2016 Arthur L. Williston Award paper winner (abstract below)

Countries showed their determination to cut the carbon emission at the COP21 Paris Climate Conference. For example, the United States pledged to accomplish a carbon reduction by 26% to 28% below the 2005 level by 2025. To achieve this goal, the US government imposed regulations to address the huge emission problem. However, the reduction achieved by these regulations is not enough for achieving the target and this paper selects the marine transportation sector as an example to study the possibilities of further contribution to attain the carbon emission target.

The International Maritime Organization (IMO) introduced the Energy Efficiency Design Index (EEDI) to improve the current GHG (Greenhouse Gas) emission practice of marine transportation. EEDI is the index measuring the energy efficiency of a vessel per unit of transport work and applies to new ships. Ship design like optimization of hull and engine efficiency and use of energy-saving devices are used to raise the efficiency of ships. Although the EEDI has shown the marine sector’s willingness to achieve 2C target, the actual amount of carbon emission is limited by uncertainties like ratio of existing vessels to new vessels and state-of-the-art ocean-going vessel design. Also, external factors like pessimistic anticipation in the market also decreases the incentive to invest in ship design and reduces the ability to achieve the expected EEDI reduction by 2025.

Leong Ka Long Karen, 2016 Arthur L. Williston Award paper winner

Apart from ship design, fuel choice is a major contributing factor to carbon dioxide emission in the marine sector as a lower carbon content fuel provides the same amount of energy but produces less carbon. The common fuels used to power marine industry now are residual oil and diesel oil due to their competitive price. However, marine fuels are less refined and have a high carbon content, which averages 87%.

Switching the fuel choice to one with a lower carbon emission factor is considered as one of the possible solutions to attain the COP21 target. Most widely discussed cleaner fuel choices – Biodiesel, Liquefied Natural Gas (LNG) and Nuclear Power are suggested to be the potential substitutes of marine diesel and their performance in different aspects like environmental performance, technology maturity, supporting infrastructure, lifecycle cost, operation and management and risk/ threat assessment is studied for choosing the best substitute. The environmental performance for all 3 fuels is better than marine diesel fuel. All 3 fuels have a much smaller carbon dioxide emission factor than marine diesel.

LNG has the best performance in terms of technology maturity. There are LNG powered vessels like containerships with membrane type LNG tanks available in market.

For supporting infrastructure, both biodiesel and nuclear power perform well. Biodiesel has similar physical properties to marine diesel and the least modification of existing facilities are required. Nuclear power requires less refueling infrastructure in the shipyard due to its long service life.

Biodiesel and LNG have a better performance in terms of lifecycle cost. For biodiesel, the initial cost of changing fuel is lower but it incurs a high unit price due to the high production cost and unsteady supply of first-generation fuel. For LNG, the price has decreased since 2008 owing to the increasing natural gas supply. However, as the LNG market expands, there are uncertainties and it may result in a price fluctuation.

In operation and maintenance (O&M), biodiesel performs the best among the 3 fuels as less significant changes are required to the vessels. Also, less additional O&M training is required for engineers and crews. Developing O&M knowledge and setting up the knowledge pool would be easier due to the similarity with marine diesel.

Compared with nuclear power, biodiesel and natural gas are safer to use as the safety and environmental impact of using nuclear power, in terms of an irreparable radiation leak seen in previous accidents, are a concern of the public. Also, the political concern towards safety due to the difficulties in monitoring the mobile nuclear power plant makes it difficult to overcome the hurdle of adopting the option.

Considering the above factors, LNG has the best overall performance and LNG is the suggested substitute for marine diesel. Assuming all new vessels shift from marine diesel to LNG, the carbon reduction by using LNG is expected to be 24.29% to 27.52% and the overall carbon reduction of a new ship is expected to be 20.19% to 21.26%.

Both physical and social infrastructure are required to facilitate the promotion of LNG powered carriers. Authorities in the US are suggested to influence the outcome at the IMO via promotion campaigns for LNG powered vessels and provision of a more solid implementation plan to the ship builder, to switch fuel choice.

It is vital for all key stakeholders like the US government, ship owners, shipyards, classification society, marine industry, etc. to work together so that the marine sector could contribute towards supporting the US commitment of accomplishing a carbon reduction of 26% to 28% below 2005 levels by 2025. By making the shift to LNG compulsory, it is predicted that a further 12% to 14% of carbon reduction can be attained by shifting fuel options of all ships in the marine transportation industry.

Learn more about the Arthur L. Williston Award Medal.