Converting tankers to green fuels is technically and economically feasible with careful fleet transition planning and consideration of asset age, a new report found.
The report , released by the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS), outlines the project results related to converting tankers to methanol or ammonia fuels.
Transitioning the world fleet to climate-friendly alternative fuels is seen essential for the decarbonization of the shipping industry. However, vessels being built or ordered today will likely be operating for decades to come, and many alternative fuels are not yet available at scale.
Therefore, shipowners face a challenge in choosing which alternative fuel and technologies they should build their decarbonization strategies around, as well as how to most effectively time their investments in these solutions. For example, is it better to build a vessel that is ready to operate immediately on alternative fuels such as methanol or ammonia, or a vessel that can be converted to operation on these fuels at a later date – and, if the latter, how much should be invested in preparation for the alternative fuel at the newbuilding stage versus in later retrofitting?
MMMCZCS has analyzed the technical, economic, and environmental impacts of preparing vessels for conversion to alternative fuels.
The report considered reference designs for two types of tankers: LR2 and VLCC. As explained, these vessel types are two of the largest in the tanker segment, often travel long routes, and have a high fuel consumption ― therefore, they can provide a good illustration of the economic and environmental impacts of different choices relating to vessel conversion.
One main takeaway is that the industry possesses the necessary technology and engineering expertise for these conversions.
When it comes to the economic impact, the differences in CapEx vary depending on the desired green fuel and vessel range chosen. In general, the most cost-effective option is tanker conversion from fuel oil to methanol , followed by conversion to ammonia.
MMMCZCS highlighted that conversion to alternative fuels impacts a vessel’s operating envelope, due to the energy density of the alternative fuels and their corresponding fuel tank size requirements. To keep the same operational range as on fossil fuels, shipowners must consider either adding tanks on deck (with a resulting impact on dwt) or giving over part of the cargo capacity to fuel tanks.
“As part of this project, we have focused on options that reduce the vessel’s operating range but preserve its cargo capacity. Based on industry knowledge, we believe that such solutions have commercial applicability,” the center said.
“Our analysis here shows that even conversions after ten years of operation on fossil fuels can still yield considerable environmental impact. However, one must also consider the financial viability of making such a CapEx investment at this point in the vessel’s lifetime,” MMMCZCS concluded.