Conventional fuels in
the future
Henrik Sjöblom – Blue Ocean Team – Rolls-Royce Marine AS
Forum for miljøvennlig skipsfart
Gardemoen 21.10.2014
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A comprehensive range of products
Ship design and integrated
ship systems
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Diesel and gas engines
Gas turbines
Automation and control
(DP)
Propulsion systems
Steering systems
Electrical podded
propulsors
Azimuth thrusters
Tunnel thrusters
Waterjets
Stabilising systems
Winch systems
One cannot
evaluate the future
of marine fuels
without evaluating
the future of the
marine industry
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Fundamental changes in shipping
Historic changes
• From sail to steam
• Coal to diesel
• Introduction of the container ship
• Cross Atlantic air-flights – end of the coastal liners
• ...
Image source: http:// en.wikipedia.org/wiki/Steamship
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Fuel evolution
Biodiesel
DME
Methanol
LNG
HFO
DIESEL
COAL
SAIL
Auxiliary Sail
Today
We will see a more diverse fuel palette!
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Future marine fuels - criteria
Fuel properties
Propulsion System
Fuel pre-treatment requirements
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Economic
Technical
Investment cost
Fuel price
Operational cost
FUTURE
MARINE FUELS
Safety
Logistical
Public opinion
Political strategy aspects
Security
Ethics
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Other
Environmental
Exhaust emissions
Life cycle environmental performance
Consequences of fuel spills and
accidents
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Main emission legislation events 2010-2020
Source: DNV
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IMO
• IMO Tier III represents approximately
an 80% reduction in NOx from Tier I
• New vessels with keel laid after 2016
needs to fulfil IMO Tier III for Emission
Control Areas (ECA)
• Outside ECA IMO Tier II needs to be
fulfilled
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Emission Control Areas
tricter environmental regulations can further promote a shift to LNG
or ship propulsion
Stricter SOx regulations
GLOBAL CAP : 4.5 % S
The review in 2018 may
conclude that the 0.5 limit
should be postponed to 2025
4.0
Effects of components:
3.5 % S
3.0
2025?
2018 review?
2.0
(S)ECA CAP: 1.5 % S
1.0 % S
1.0
-
CO2:
SOx:
NOx:
NO2:
PM:
Greenhouse/climate effect
Acidification of land, fish death
Existing ECA (Jul 2011)
Fertilizing effects, forms toxic ozone
Toxic to humans
Under active discussion as
Respiratory effects, Arctic smelting
possible new ECA
0.5 % S ( MDO? )
LNG instead of HFO gives:
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Stricter NOx regulations
2025
2020
2015
2012
2010
EU Ports: 0.1 % S 0.1 % S ( MGO? )
2005
Fuel Sulphur limit [%]
Given the composition of LNG, there are a number of
benefits of utilizing LNG for propulsion, compared to
HFO:
- 20-25% net reduction of CO2 /GHG emissions
- Nearly 100% reduction of SOx and particulates (PM)
emissions
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Fuel palette in the future
Fuel name*
Fuel type
Feedstock
Production technology
MDO
Marine distillate including
marine diesel and gas oil
Oil
Refinery
Bio_MDO
Biodiesel (1st generation)
Biodiesel (2nd generation)
Rapeseed oil (1st generation)
Lignocellulose/Wood (2nd generation)
Trans esterification
Gasification
HFO
Marine residual oil
Oil
Refinery
Bio_HFO
Straight vegetable oil (SVO)
Rapeseed oil
Pressing
LSHFO
Low sulphur fuel oil
Oil
Refinery
Bio_LSHFO
Straight vegetable oil (SVO)
Same as Bio_HFO
Same as Bio_HFO
LNG
Liquefied natural gas
Natural gas
Extraction and liquefaction
Bio_LNG
Biogas
Lignocellulose/wood biomass
Gasification
H2
Hydrogen
Methane
Steam methane reforming
with CCS
Bio_H2
Hydrogen
Lignocellulose/wood biomass
Gasification
MeOH
Methanol
Methane
Reforming and synthesis
Bio-MeOH
Methanol
Lignocellulose/wood biomass
Gasification
*The names of these fuel types are for the purposes of this study only and may differ from formal definitions, either
existing or under development (e.g. ISO Marine Fuel Standards)
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Ship Owner’s options after 2020 (2025)
Existing
vessel
EXPENSIVE INSTALLATION
HFO + SRC
+ Scrubber
LNG refit
MGO + SCR
COMPLICATED AND
EXPENSIVE
HIGH OPERATING COST
LNG or
dual-fuel
(LNG+MGO)
New build
Use
alternative
fuel
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HFO will still be very
much around in
2030
Taking 47%-66%
of the total fuel mix
Cit. Global Marine Fuel Trends 2030; Lloyds RoS & UCL
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Fuel price forecast
• Today HFO is passing LNG
in price as a global average
Local differences will rule!
Marine fuel price paths towards 2035
Source: http://blogs.dnvgl.com
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Regional pricing for new fuels
MGO
HFO
LNG
NG
24 $/mmBTU
16 $/mmBTU
6-10 $/mmBTU
2-4 $/mmBTU
MGO 23 $/mmBTU
HFO 16 $/mmBTU
LNG 8-16 $/mmBTU
MGO 23 $/mmBTU
HFO 16 $/mmBTU
LNG 12-18 $/mmBTU
Shale gas - big impact on US gas prices!
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Forecast with current economic growth
• HFO will be around, but with a
declining share
• MDO will remain a strong
alternative
• LNG will boost when
infrastructures develop
• Alternative fuels will be develop
100 %
90 %
80 %
70 %
60 %
Alt.
50 %
LNG
40 %
MDO
30 %
HFO
20 %
10 %
0%
2010
2015
2020
2025
2030
Source: Global Marine Fuel Trends 2030; Lloyds & UCL
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Short term
• Drivers: SOx regulation in 2015 and IMO Tier III in 2016
• MDO/MGO most used in SECA (>95%)
• LNG vessel solutions mature
- Developed infrastructure will boost LNG
• SCR and scrubbers will be needed for HFO solutions
• Niche fuels like methanol, hydrogen etc under consideration
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Long term (2030-)
• LNG frequently used – infrastructure in place
• HFO solutions will exist, but with steadily declining share
• Niche fuels – Methanol, hydrogen... – will have local impact
More diverse fuel palette!
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Thank you for your attention