Dr.-Ing. Pierre C. Sames, DNV GL SE; Dr. Mohd Shahrin bin Osman, DNV Singapore PTE Ltd.; Hans Anton Tvete, DNV AS
The International Maritime Organisation (IMO) has established demanding targets for reducing greenhouse gas emissions from shipping towards 2050 but recently some industry stakeholders have even called for stricter targets to meet the Paris Agreement ambitions (reaching 1.5⁰ C temperature increase in 2100). Modelling future waterborne trade and ship emissions demonstrates that targets will only be met with substantial use of zero carbon or carbon neutral fuels such as ammonia, hydrogen or synthetic fuels (e-fuels). Such alternative fuels are not available in large volume today and industrial scale production needs to be established and expanded to reach forecasted levels of between 5 to 7 EJ per year in 2050, equivalent to about 120 to 165 million tons of diesel oil. Ammonia is widely considered as one of the promising future alternative fuels due to the zero carbon emission profile when used (from tank to wake), better energy density properties than hydrogen, and likely lower cost compared to other synthetic fuels which require using captured CO2 for their production. The production and supply chain (from well to tank) will determine life-cycle emissions for a given fuel and renewable electricity and subsequent hydrogen production are key elements of producing these alternative fuels. However, despite about 180 million tons of ammonia produced today per year, effectively none of it is available as ship fuel and a bunkering infrastructure is non-existent. No international regulations for safe and environmentally friendly bunkering and use of ammonia as ship fuel are in place today but R&D, also by DNV, is ongoing to address both. Ammonia can easily be handled as a liquid at atmospheric pressure and -33.6⁰ C but is also corrosive and toxic and both properties require special measures for safe use during transport, bunkering, onboard storage and supply to the engine. In addition, if ammonia is used in an internal combustion engine –the expected use in international shipping – nitrogen oxides and nitrous oxide are created which need to be captured to ensure an environmentally friendly operation. In particular, nitrous oxide needs to be avoided or captured since it has a global warming potential of about 265-300 times that of CO2 on a 100-year timescale. Assuming availability of green ammonia and that it can be used safely and environmentally friendly, ship owners and operators would need to understand the future commercial competitiveness of ammonia as ship fuel, which is driven by the cost of renewable electricity, capital costs for the electrolyzers and the CO2 costs assumed to be levied onto the use of fossil fuels. A newly developed cost model takes these and other factors into account to predict the levelized cost of ammonia as ship fuel, based on an islanded production plant, transport and local distribution. It is shown that with more optimistic cost assumptions, ammonia might be competitive against fossil fuel plus CO2 surcharge by 2040. The proposed paper will address the topics above and report on recent own work results.