Decarbonisation And Shipping: Alternative Fuels

• Published date: 22 July 2021
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity, Renewables, Climate Change
• Law Firm: Hill Dickinson
• Author: Ms Rachel Hoyland and Peter McDonnell

As shipping pivots towards greener operations, and opportunities to increase ship efficiency decrease (as they inevitably must), a major issue the industry must get to grips with is fuel transition.

Shipping is heavily reliant on fossil fuels, and the huge majority of ships globally are powered today by hydrocarbon based fuel oils, albeit with some variation in grade and specification. Burning this fuel releases large quantities of carbon dioxide into the atmosphere, which significantly contributes to its insulative properties and to global warming and climate change. Fuel oils have found favour in the marine industry, and almost all other industries, due to their high energy density, wide availability and the relative ease with which they may be stored, transported and handled. Although care is certainly needed, and fuel oils are not without inconveniences and difficulties, we live in a world almost universally well adapted to handling these.

Replacing ubiquitous and convenient fossil fuels is a challenge, which all industries face. However, some dimensions of the challenge specific to shipping include:

1. limited storage capacity on board ships coupled with, in some cases, long distances between land based refuelling stops
2. the necessary proximity of fuel storage and human living quarters on board ships
3. uncertainty (in some cases) as to schedule and future ports of call and a preference to retain flexibility as to port calls (i.e to be able to fuel anywhere globally)
4. limited storage capacity ashore at ports and terminals

Alternative fuels - candidates

The industry has by no means agreed on a shortlist of alternative fuels. However, in order to illuminate some of the considerations at play, we take a quick look below at some pros and cons of three future fuel candidates:

Hydrogen

Pros: speed and ease of refuelling; green production by way of electrolysis powered by renewable energy is possible; suitable for use in fuel cells; already produced in substantial volumes for use in the chemical industry; falling cost of renewable energy may lower green production costs.

Cons: currently produced mostly from fossil fuel sources; green production currently expensive; low energy density, requiring 8 x more volume than fuel oils for equal power output, and consequent storage capacity issues; must be kept at -253C to be stored as a liquid; highly combustible and explosive, giving rise to safety issues; combustion produces nitrous oxides; fuel cells not currently...