More fuels, more vessel classes

By Sean McLaughlin, Strategy Consultant, Houlder Ltd

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As the shipping industry continues its transition to alternative marine fuels, there is a need to revisit the designs of some ships and to create completely new designs to meet the new challenges. In this more complex operating environment, its essential that the ship designers are involved from the outset.

For ship operators to decarbonise, they will need better access to alternative marine fuels. This means more methanol, LNG, ammonia, and hydrogen need to be shipped globally. Plus, for green methanol and green LNG supplies to scale, captured or biogenic CO2 are an essential feedstock. This means new cargoes, new shipping routes and as a consequence new ship types.

CO2 shipping is an interesting example. To date the shipping of CO2 has been a very small part of the shipping industry. Over recent years there has been an increasing attention on the need to transport CO2 by sea, and with this has come the recognition that taking the existing ship designs and making them bigger isn’t necessarily fit for purpose.

The growth in CO2 reuse opportunities presents another new set of challenges with the potential for new routes dictating different large and long distance carrier designs. Adding to the complex landscape is the challenge of onboard capture, where there is a need for a network of unloading and consolidation points for the captured CO2. Does this give the potential for a fleet of shorter sea feeder vessels?

Rystad Energy predicts that, based on planned carbon capture projects, more than 90m tonnes per annum (tpa) of CO2 will be shipped by the end of the decade, volumes potentially requiring a fleet of 55 carriers by 2030. These forecasts for growth in demand have largely been based on the growing network of sequestration routes for CO2 captured from industrial processes. Are they potentially even understating the commercial opportunities?

As onboard carbon capture gains traction, almost every ocean-going ship type has the potential to become a CO2 carrier. So, what are the key challenges that ship owners and operators should be aware of?

It must be much more widely understood that not all CO2 is the same. The source of the CO2 (for example the way in which it has been extracted from exhaust gases or an industrial or chemical process) will dictate its purity and in turn the level of purity will have an impact on vessel equipment and onshore infrastructure investments.

The level of impurity isn’t a percentage game. The nature of the impurity is often as relevant as its quantity. The level and type of impurity will impact corrosion levels in the containment and unloading equipment, it will impact on the sizing and energy consumption of liquefaction plant, and it may increase safety hazards in case of an escape. The presence of impurities such as nitrogen, argon, hydrogen, or methane also affect the storage pressure necessary for the liquid at a given temperature.

There are also wide range of onboard carbon capture technologies. Some produce CO2 which is then stored in liquid form and some incorporate the CO2 within other materials for further separation on shore.

Houlder has seen several tenders for CO2 carrier designs that fail to recognise the number of variables and rely on a repeat of previous designs for key areas such as cargo containment. Misconceptions could result in significant over-specification of storage tanks, reliquefication plants and other equipment, potentially resulting in unnecessary CAPEX or constraints on the vessel’s operations. There is also the potential of a baked-in OPEX problem resulting from significant and potentially unnecessary increases in non-revenue earning cargo weight, or in the energy required to maintain these containment systems.

More broadly, rising to the challenges of decarbonisation requires us all to be prepared to embrace new paradigms and ways of operating, rather than the gradual evolution that shipping has previously been used to. We have all been used to seeing ships as a system, but we can no longer look at the ship system in isolation. The transportation of CO2 presents a clear example of why we need to see the ship as part of the whole supply chain and make sure it fits in the most effective way.

Being bold, challenging assumptions, and avoiding being suffocated by traditional ways of working are all highly relevant when developing new carriers and their wider supply chains. For those willing to embrace new paradigms, an increasingly complex fuel mix and operating environment creates significant opportunities. We cannot expect coordinated end-to-end fuel supply chains to ‘just happen’ – there has to be proactive collaboration within our industry and across industries.

If you’re interested in the new vessel designs that will shape our industry, get in contact.

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