1 E MARINE ENVIRONMENT PROTECTION COMMITTEE 74th session Agenda item 7 7 March 2019 Original: ENGLISH REDUCTION OF GHG EMISSIONS FROM SHIPS Comprehensive insights on worldwide bunkering availability and uptake of alternative fuels for ships Submitted by Norway SUMMARY Executive summary: Strategic direction, if applicable: This document provides information that is available on the uptake of alternative fuels, and presents the Alternative Fuels Insight (AFI) platform. This document also provides ideas on how the portal could be used to support the Initial IMO Strategy on reduction of GHG emissions from ships and its follow-up actions. 3 Output: 3.2 Action to be taken: Paragraph 0 Related documents: MEPC 73/19 and MEPC 73/WP.5 Background 1 The Initial IMO Strategy on reduction of GHG emissions from ships adopted at MEPC 73 notes that the global introduction of alternative fuels and/or energy sources for international shipping will be integral to achieve its overall ambitions. One of the candidate short-term measures is to initiate research and development into alternative low-carbon and zero-carbon fuels, while a candidate mid-term measure is to initiate an implementation programme for the effective uptake of such fuels. 2 Knowledge about the current status of fuels, fuel technologies and their availability and use, both on a global and local level, is an important element of a possible implementation programme. This document informs that the knowledge on the uptake of alternative fuels is available, and presents the Alternative Fuels Insight (AFI) platform which offers a comprehensive and continually updated overview of alternative fuel projects, bunkering infrastructure, suppliers and technologies. AFI provides a wide range of statistics and breakdowns of the uptake of alternative fuels in shipping, beyond what has been presented in this synopsis.
2 Page 2 3 AFI is run by DNV GL with financial contributions from several companies. The AFI platform can be accessed through: It is free to register and access, and most information is available for free to users. About the AFI 4 The rapidly approaching 2020 fuel sulphur limit and the newly adopted IMO GHG Strategy have put the spotlight onto alternative fuels for shipping. Alternative fuels and propulsion technologies should be on the radar of every shipowner. The AFI platform has been developed to provide a clear picture not only of the fuels and the surrounding infrastructure, but to build links between suppliers and owners and charterers. The objective is to enable a faster shift to environmentally friendly alternatives for shipping. 5 With interactive maps and data visualizations, it is easy for users to see where infrastructure already exists or will shortly be developed, alongside the growing alternative fuelled fleet. New tools let users dig deeper into the data to analyse trends and screen the feasibility of their alternative fuel projects based on capital expenditure (CAPEX), operating expense (OPEX) and fuel prices. 6 The platform is also open for user contributions. AFI is the fastest growing community for alternative fuels, where any user can nominate new information if a specific project is missing or if information should be updated. Through the Fuel Finder tool, shipowners and charterers can submit requests for bunkering, specifying fuel type, location, volume and from which date they would like to bunker. With one request, they can quickly determine how the operational profile of their projects matches the capability of multiple suppliers, based on the response rate. DNV GL validates these requests and then makes them available to the suppliers. Figure 1: Requests for LNG bunkering by ship owners in the Fuel Finder as of 1 February The AFI platform builds on DNV GL's LNGi portal, but with an expanded focus that covers LNG, LPG and methanol, as well as emission reducing technologies such as batteries. There is also information on the uptake of scrubbers. The platform consolidates a wealth of detailed technical information on these fuels and technologies, including their bunkering
3 Page 3 infrastructure, and examines their capabilities and limitations, as well as giving practical insights into their implementation and operation. Figure 2: The Alternative Fuels Encyclopaedia covers a wide range of fuels, technologies and parameters 8 With most of the information free to access, the AFI platform should be a valuable resource for shipowners and operators needing to research and keep up to date in this rapidly moving sector. Status for uptake of alternative fuels and technologies 9 Investments in LNG fuelled ships continue at a steady, but slow, pace. The most frequently cited reason for the delayed uptake is lack of LNG bunkering infrastructure. The high additional upfront delta CAPEX for the LNG fuel system also has a significant cooling effect on the shipowners' investment appetite. For the orderbook, however, there is a clear tendency towards larger ships with larger LNG tanks and higher fuel consumption, meaning that the LNG bunker volume is growing more rapidly. Recent breakthrough orders in both the bulk, container and tanker segments give reason for continued optimism for LNG as fuel for deep sea ships.
4 Page 4 Figure 3: Uptake of alternative fuels and technologies across ship segments Figure 4: LNG fuelled ships in operation and on order and LNG ready ships 10 In only a few years, investments in ships with batteries have caught up with LNG fuel, counting by number of ships. In August 2018, the Maritime Battery Forum * estimated that the total confirmed battery capacity on order/in operation had grown past 300 MWh which is equivalent to about 25 tonnes of MGO. 11 Though a majority of battery application is for non-plug-in hybridization (i.e. no shift to shore-based electricity as fuel), the current boom is important as it helps build competence and volume, increase competition and reduce costs. Several plug-in hybrid/fully electric ships, mostly ferries with crossings shorter than one hour, have also been ordered lately, and will replace conventional ferries burning up to approximately 1,000 tonnes of MGO per year. * The Maritime Battery Forum (MBF) is an industry interest organization based on Norway working to promote and facilitate the adoption of batteries on ships:
5 Page 5 Figure 5: Overview of battery applications for ships and their geographical spread 12 Uptake of methanol, LPG and hydrogen as fuel for shipping is at a very early stage, but interest is increasing and projects have started to materialize. The implementation of the IMO GHG Strategy and the pursuit of the 2030 and 2050 ambitions is expected to trigger development and uptake of other alternative fuels as well. Action requested of the Committee 13 The Committee is invited to take note of the information provided in this document and consider its relevance in relation to the forthcoming discussions concerning an implementation programme for fuels.