Coronavirus-related lockdowns around the globe have, in massively reducing car and air transport, temporarily enforced some of the measures needed to combat global climate change. But when the world comes out of its enforced semi-hibernation, recovery measures to kick-start economies will likely have the opposite effect, with industries and transport scaling up again.

In the midst of the growing pandemic, a report into how adopters of LNG as a ship's fuel can maintain — despite its major methane emissions downside — a pathway to further decarbonisation was issued by the marine-fuel lobby group SEA\LNG.

Even SEA\LNG recognises that, as a fossil fuel, LNG falls short when aiming for the IMO targets to cut emissions by 40% by 2030 and 50% by 2050. The answer, it claims, is the development and adoption of carbon-neutral versions: liquefied biomethane (LBM) or liquefied synthetic methane (LSM).

Greenhouse gases

Much analysis suggests burning fossil-based LNG can result in significantly higher greenhouse gas emissions as methane has a hugely greater global-warming potential than CO2.

Methane can be lost into the atmosphere over various stages of the production and use of LNG. In shipping, methane slip — the loss of unburned gas — is highly dependent on the type of engine, its performance, and load. It can be cut in high-pressure, gas-injection diesel cycle engines.

However, LNG is touted to provide a 20%-plus improvement in carbon emissions on a well-to-wake basis over heavy fuel oil, which is why it has been seen as a stepping stone to decarbonisation while other technologies and fuels are not yet ready.

There are a couple of obvious advantages to the strategy of converting to LBM or LSM. Both the biogas and synthetic versions can be used in the engines of existing LNG-fuelled ships, and the means of transporting and bunkering them are well developed and can also be adopted.

These two factors alone would future-proof a lot of meaty investments made by shipowners.

LBM can be created by anaerobic digestion fed from wet feedstocks or the gasification of woody biomass, while LSM is produced by water electrolysis with the resulting hydrogen combined with CO2 derived from air capture or a biogenic source — but needs to be made using renewable electricity to be considered a zero-carbon fuel.

The basic conclusions of the SEA\LNG-commissioned report, compiled by consultancy CE Delft, are that there is a sufficient supply of biomass to supply the shipping industry with LBM without cutting into food production, and that the cost of producing LSM could be comparable to the pricing of other zero-carbon fuels, such as hydrogen or ammonia.

All very well so far. But even if sufficient quantities of LBM and LSM can be produced, the report admits it would be unrealistic to assume that all of it would be available to shipping.

More importantly, all green fuels have to be produced with clean energy to be zero carbon, and maritime demand could take up almost all of the entire conceivable supply of renewable electricity in 2030. Using LSM to decarbonise shipping by 2050 would require 25% to 30% more renewable electricity than forecasts suggest will have been added to global supply, the report adds.

But not only is the supply of renewable electricity a limiter on the development of zero-carbon marine fuels, so will be the cost of developing it. The only answer the report can give is that global government policies are vital to ensure investment in massively ramping up green generation.

Fossil carbon levy

This would also require policy measures such as a fossil carbon levy, emissions trading or a low-carbon fuel standard to be enacted.

We are not talking about a $10 per tonne levy here. Even a carbon mark-up of between $50 and $100 per tonne of CO2 — a price level considered consistent with achieving the temperature target for 2030 as outlined in the Paris Agreement on climate change — will not be sufficient to incentivise a switch from fossil LNG to LBM or LSM by that date, the report says.

And to achieve that switch by 2050, a $300 to 400 per tonne mark-up on CO2 is likely needed.

As a result, estimates for the cost of synthetic methane vary significantly. Prices for 2030 are put anywhere between $23 and $110 per MMBtu and around $15 to $60 per MMBtu for 2050. At the earlier deadline, fossil-based LNG is forecast to be $1 to $11 per MMBtu cheaper than very low-sulphur fuel oil, while LSM would be the most expensive bunker fuel.

The current global capacity of renewable electricity is insufficient to produce enough LSM to power a significant share of the shipping fleet — and that is without factoring in how much green energy would be needed to produce hydrogen, which is a necessary feedstock for all zero-carbon fuels, the report concludes.

In just a few months, the coronavirus has exerted an unprecedented shock to global economies, from which the world will have to work very hard to recover. It has also given us a glimpse of the magnitude of response necessary to enact decarbonisation. Very expensive investments and strategic policies will be impossible to avoid.