Panagiotis Mitrou is the ‘go-to’ gas man at Lloyd’s Register. A multi-fuel future is likely within this decade but could easily take one more decade to scale up, he says, but in the meantime, we should work with what we’ve got. In fact, Mitrou goes further. He says that LNG could conceivably provide a three-decade pathway, forming a robust foundation from which shipping could meet and probably exceed IMO ambitions, and yield other climate-related benefits too.
"We have the fuel today. It’s suitable for new and existing ships. And the global distribution network is developing fast."
Of course, Mitrou fully supports R&D relating to new zero-carbon fuels, including ammonia and hydrogen. But shipowners and operators should understand his thinking: it is extremely commercial. New fuels for shipping are probably many years away as yet, and we have only an indication of when and under what conditions, these will become commercially viable.
So far, therefore, shipowners should only consider committing capital to R&D. And this is already evident in a range of projects relating to hydrogen and ammonia, in particular. On the other hand, the world has abundant supplies of cheap LNG, an existing global logistics network, rapidly developing bunkering infrastructure, and steady advances in engine and combustion technology for new and existing ships. What’s more, today’s cryogenic technology paves the way for other really attractive future fuels down the track.
So why are there two very distinct camps – those that believe in LNG’s potential as a transition fuel on the road between now and 2050, and those who don’t? Mitrou’s clear explanation on this point comes before he addresses the chief concerns around LNG as fuel.
Starting out today
“Uncertainty is the mother of inaction,” he explains. “Shipowners run capital-intensive businesses … they are entrepreneurs. They will not risk capital if there is no certain outcome. Uncertainty is the enemy! To get to 2030, we need to start the journey today. We can do that immediately, with LNG. We can’t do it yet, using any other new marine fuel.”
Mitrou compares meeting the IMO’s ambitions with governments collecting taxes. “If they don’t collect enough to balance the books, they will inevitably want more sometime in the future. Similarly, if shipping fails to meet the IMO’s targets by 2030 and beyond, then there will be more regulations, and they will be stricter.”
He does not say this, but the inference is that if IMO ambitions are not achieved, the industry’s decarbonisation process will be taken out of its own hands – the worst possible case for shipowners because that would introduce unimaginable business uncertainty.
Mitrou continues: “Shipowners want certainty. To meet 2030 aims, they must make decisions today. They don’t want to invest in fuels that may prove useful in 2035 but may not. They want to invest in a fuel that ensures a secure outcome.”
The carbon issue
Some critics focus on several key negatives, not least the fact that LNG is, of course, a hydrocarbon. And, quite rightly, they point out that claims by LNG advocates often exaggerate the CO2 savings that the fuel can yield. There are many variables, not least engine combustion technology and the LNG supply chain. Sometimes these are conveniently overlooked.
However, although it is a hydrocarbon, LNG could still pave the way to low- and potentially even zero-carbon fuels in the future. Crucially, Mitrou stresses, this progression could be made with the same multifuel engines, while methane deriving capital, technology and expertise could be used in the uptake of zero-carbon fuels.
He stresses that shipping must not forget the lessons of the past. He cites the example of scrubbers and heavy fuel oil (HFO) versus new low sulphur blends. This was also a matter of business certainty. Owners knew that if they invested in a scrubber for x dollars, and could get HFO for y dollars or less, they could comply with the regulations, pay back the investment, and stay ahead.
“It’s a very competitive industry. The same argument can be used for LNG. With a relatively high degree of confidence, you can predict that natural gas supplies will be abundant and LNG pricing will remain attractive over the next 10 years. So you could with a reasonable level of confidence get your payback for investing in LNG as fuel. What happens next, no-one yet knows, but by doing something now, you are not at a competitive disadvantage later.”
Market forces
But surely you can’t compare sulphur and carbon? “Yes … you can,” Mitrou responds, “Transformers are available today to oxidise methane and take carbon out of emissions, but there are no incentives for owners to buy the equipment. They are expensive, there are no mandatory requirements yet, and there is no payback. The only way a shipowner would consider such an expense would be for environmental social and governance (ESG) reasons.”
Whilst it is possible to use methane (CH4) as a hydrogen carrier, removing the carbon before combustion, it seems far more efficient to burn methane as is, and take out the carbon afterwards. That’s because methane has an energy density more than three times greater than hydrogen while the carbon atom offers approximately half of the calorific value, in this manner – “you get more bang for your buck!”
At first sight, the economics look complex but Mitrou quickly dispels this one. “Meeting the target requires zero-carbon fuels such as hydrogen or ammonia, and this in return will require a price on carbon. When that happens, the unaffordable methane transformers today suddenly become instantly attractive as a means of continuing to use cheap and abundant LNG. And, by the way, we still won’t know the cost of the new fuels.”
Three decade pathway
However, what is really exciting is that LNG could offer potential in the transition. The adoption of biogas, which can be carbon neutral, or potentially carbon negative, depending on its feedstock. We already have this technology, Mitrou points out, and will be used on new vessels to be deployed by Hurtigruten on its coastal route between Bergen and Kirkenes in Norway.
Initially, these ships will use LNG, with a biogas drop-in derived from fish waste. Later, as more biogas becomes commercially available, the proportions will change – less LNG, more biogas, and a much lower carbon footprint may become real.
Then the next stage, Mitrou suggests, is to assess where biogas could be sourced most effectively from a methane reduction angle. And here, global shipping can benefit from work undertaken recently outside the sector. The European Union’s Methane Strategy, announced in October, reveals that more than half of global methane emissions, 53%, come from agriculture, with a further 26% from waste. If biogas for shipping could be sourced from these sectors, Mitrou explains – by capturing the methane as a feedstock for biogas – then the result could be a fuel with a small, or even negative, carbon footprint. Although it should be said that there is still uncertainty around how these solutions may develop and the scenarios in which they are viable. At LR, we are undertaking further exploration of biogas as a potential pathway.
Virtuous circle
Methane slip – the unburnt methane that can result from an incomplete LNG combustion process in some ships’ engines – is often held up as a major disadvantage of the fuel because methane is a far more aggressive greenhouse gas than CO2. However, engine designers have made huge strides recently in reducing the scale of methane slip and, in some LNG engines, it is now almost negligible.
However, any unburnt methane is still a greenhouse gas, as it’s climate impact is about 30 times more than CO2 on a 100 year time-frame which increases to about 90 times more on a 20 year time-frame. Here it gets complicated, but Mitrou explains. Methane should be viewed in a ‘well-to-wake’ context. If methane were captured from the agriculture or waste sectors, preferably both, and used as a feedstock for biogas, this would prevent its atmospheric digestion and the worst of the global warming impact.
“In this context, a relatively small volume of biomethane blended with fossil methane could fruit an equivalent footprint quite close to compliance with ambitious targets. For greater volumes of biomethane if the economics work the result could attain net- zero or even negative. This would be a virtuous circle. It would limit the release of highly dangerous methane from other industrial sectors. It could provide global shipping with a close to zero-carbon, or even negative-carbon fuel. And it could use the well tried and tested cryogenic technology – including combustion, storage and bunkering infrastructure – that shipping already has today. This however will depend on recognising the significant GHG emissions abatement potential of biogas/biomethane, as pointed out by the IEA in its report on the ‘Outlook for biogas and biomethane: Prospects for organic growth’ released earlier this year.”