A technical, economic and environmental assessment of clean marine fuel option and industries for Australia

The Challenge

Decarbonisation of the maritime sector is an important part of Australia’s and the global effort to limit climate change. Several cleaner marine fuels are currently being discussed for this task, including liquified natural gas (LNG), hydrogen, methanol and ammonia. These fuels can come from fossil or renewable sources and be used in several different marine propulsion systems. Each of these options performs quite differently to incumbent options and one another in terms of utility, scalability, cost and greenhouse gas (GHG) emissions. As a result, the feasibility of establishing different fuel/propulsion system options needs careful examination. This includes considering the fuel lifecycle, from production to use, and including the retrofit of existing ships as well as new ships.

Outcome

This project has developed an integrated model to assess the technical, economic and GHG emissions of different shipping options. An emphasis was placed on understanding and integrating the main physics that determine ship performance. This integrated model relates the vessel type, deadweight and design speed to the vessel dimensions and hull form, and thus to the hull resistance and the required propulsive power. It allows determination of the maximum cargo mass and volume for specified combinations of fuel, propulsion system and range, as well as the total cost of shipping and the associated lifecycle GHG emissions.

This model also allows parametric variation of system inputs. For example, it can be used to demonstrate how reductions in range, increases in deadweight and reductions in design speed can combine with a clean but higher cost fuel to significantly reduce lifecycle GHG emissions (tCO2e/t.km) whilst limiting increases in the total cost of shipping (i.e. the ‘green premium’, $/t.km) per unit transport work.

Impact

The maritime sector transports about 80% of global trade annually and emits approximately 1 billion tCO2e pa of GHGs, which is larger than the domestic emissions of many countries, including Australia. Clean marine fuels are of course needed to achieve lower carbon and lower emissions from shipping. As the sector decarbonises, Australia may be also able to become a supplier of these clean marine fuels because of our abundance of energy resources and our proximity to key ports and shipping routes. A clear understanding of the opportunities and challenges of different potential fuel options is therefore important.

Our physics-based model enables stakeholders to evaluate the technical, economic and GHG emissions of different fuel and propulsion system options for different ship types. This allows us to suggest ship design and operational interventions that make a more affordable low-emission fleet achievable for a given tonnage delivered and subsidy.

For example, we analysed the cost and emissions intensity of a conventional, 250,000-tonne deadweight, iron ore carrier that travels from Australia to China. A similar total cost of shipping could be achieved using a 350,000-tonne deadweight vessel with a reduced but plausible range, lower design speed and fuelled by high pressure, green hydrogen gas. This alternative would not compromise on the cargo mass delivered annually and could plausibly achieve deep abatement for a “green premium” of order 100 $/tCO2e or only about US$2 per tonne of iron ore delivered. This is much smaller than historical iron ore commodity price fluctuations, and similar results also appear achievable with other, low-emission fuels. This suggests that significant increases in shipping costs may not be inevitable as we decarbonise.

Next Steps

We plan to extend this integrated model to assess the most prospective combinations of clean energy carriers, marine fuels and propulsion systems for shipping to/from Australia. Following this, we will develop a method for determining the optimal deployment pathways for a fleet of ships, considering the existing fleet and options for both retrofit and replacement.