AMF Annex 41nada

Annex 41
A Report from the IEA Advanced Motor Fuels Implementing Agreement
Alternative Fuels for

Marine Applications
Ralph McGill
Fuels, Engines, and Emissions Consulting
William (Bill) Remley
Alion Science and Technology
Kim Winther
Danish Technological Institute
May 2013
Annex 41
A Report from the IEA Advanced Motor Fuels Implementing Agreement
Alternative Fuels for

Marine Applications
Ralph McGill
Fuels, Engines, and Emissions Consulting
William (Bill) Remley
Alion Science and Technology
Kim Winther
Danish Technological Institute
May 2013
Acknowledgment
TheIEAAMFOrganizationisgratefultothefollowingcountriesandtheir
representativesfortheirsupportinprovidingfundingfortheresearchtodevelopthis
report.Theworkhasbeenmostinterestingandinformative.
DenmarkJesperSchramm,TechnicalUniversityofDenmark(DTU)
FinlandNilsOlofNylund,TheTechnicalResearchCentreofFinland(VTT)
GermanyBirgerKerckow,FachagenturNachwachsendeRohstoffe(FNR)
Thispageintentionallyblank.
ii
Table of Contents
Acknowledgment.................................................................................................
AcronymsandAbbreviations................................................................................
ExecutiveSummaryAnnex41............................................................................
1. Introduction..................................................................................................
2. Background...................................................................................................
3. CurrentSituation...........................................................................................
3.1 LegislationforMarineSOxReduction.........................................................
3.2 LegislationforMarineNOxReduction........................................................
3.3 CompliancewithMarineSOxandNOxLegislation.....................................
4. FuelPricesandAvailability............................................................................
4.1 CurrentMarineFuels..................................................................................
4.2 GlobalFuelConsumptionbyVesselType...................................................
4.3 FuelCost......................................................................................................
5. AlternativeMarineFuelIncentives.................................................................
6. AlternativeMarineFuelsandEngines............................................................
6.1 LiquidorCrudeBasedFossilFuels..............................................................
6.2 LiquidBiofuels.............................................................................................
6.2.1 Methanol.........................................................................................
6.2.2 Biocrude..........................................................................................
6.3 GaseousFuels..............................................................................................
6.4 ExhaustGasTreatmentSystems.................................................................
7. AssessingAlternativeFuelsforMarineUse....................................................
7.1 LiquidFossilFuelsAdvantages....................................................................
7.1.1 FuelSystemandEngineCompatibility............................................
7.1.2 LowerSOxEmissions.......................................................................
7.1.3 Safety...............................................................................................
7.1.4 Availability.......................................................................................
7.2 LiquidFossilFuelsDrawbacks.....................................................................
7.2.1 Price.................................................................................................
7.2.2 Characteristics.................................................................................
7.2.3 FutureAvailability...........................................................................
7.3 LiquidBiofuelsCharacteristics....................................................................
7.3.1 BiodieselAdvantages......................................................................
7.3.2 BiodieselDrawbacks........................................................................
7.3.3 AlgaeFuelsAdvantages...................................................................
7.3.4 AlgaeFuelDrawbacks......................................................................
7.3.5 HydrogenationDerivedRenewableDieselAdvantages..................
7.3.6 HDRDDrawbacks.............................................................................
7.4 GaseousFuels:NaturalGas.........................................................................
7.4.1 NaturalGasAdvantages..................................................................
7.4.2 NaturalGasDrawbacks...................................................................
7.5 FutureMarineFuelUse...............................................................................
iii
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xi
1
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40
40
40
42
55
8. VesselsUsingAlternativeFuels......................................................................
8.1 VesselsUsingULSDandLSRF......................................................................
8.2 VesselsUsingNaturalGas...........................................................................
8.2.1 LargeShips.......................................................................................
8.3 VesselsUsingLiquidBiofuels.......................................................................
9. TheWayForwardforFutureMarineFuels.....................................................
9.1 BreakEvenPoints.......................................................................................
10. Conclusions...................................................................................................
11. Recommendations.........................................................................................
References...........................................................................................................
AppendixAMarineAfterExhaustTreatmentSystems.......................................
A.1 SelectiveCatalyticReductionandExhaustGasRecirculationSystems.......
A.2 ScrubberSystems........................................................................................
iv
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57
57
63
64
67
68
71
75
77
83
83
85
List of Figures
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
CurrentandPossibleFutureECAs........................................................................
NorthEuropeanSECAEffectiveasofAugust11,2007.........................................
ShipOperatorsChallenges...................................................................................
IMODieselEngineNOxEmissionLimits...............................................................
GlobalMarineFuelConsumptionEstimates,IMO2009.......................................
TypicalHeavyMarineFuelTypeDistribution.......................................................
TheTotalWorldMarineFleetAccordingtoIMO.................................................
WorldBunkerFuelDemand.................................................................................
BunkerworldIndexPricesofHFSO380andMDO................................................
CostofLighterLowSulphurFuelsComparedtoHighSulphurBunkerFuel........
SulfurContentofConventionalMarineFuels......................................................
WrtsilDirectInjectionDualFuelConceptforMethanolinLarge
FourStrokeEngines..............................................................................................
13. WrtsilPortInjectionDualFuelConceptforGasUseinLarge
FourStrokeEngines..............................................................................................
14. CostsofScrubberSystems[CoupleSystems,AlfaLaval]......................................
15. ProjectedPricesofMarineFuels..........................................................................
16. WeightsandVolumesofMarineFuels.................................................................
17. LNGBunkeringShipSeagasalongsidetheVikingGrace...................................
18. ExistingandPlannedProductionPlantsandLNGTerminalsintheSECA.............
19. LNGBunkeringBarge............................................................................................
20. BitVikingwithLNGFuelTanksontheMainDeck.............................................
21. LNGTanksonTopDeckofWSFIssaquahClassFerry...........................................
22. ConceptIllustrationofTOTEContainerShip........................................................
23. FuelSelectionProcessisResponsibilityoftheChartererand
IsInfluencedbyManyFactors..............................................................................
24. BreakEvenAnalysisforScrubberInstallationon38,500dwtTankers................
A1.SCRSolutionbyMAN............................................................................................
A2.AdvancedEGRSystembyMAN............................................................................
A3.ScrubberSystembyAlfaLaval..............................................................................
A4.FicariaSeawaysEquippedwithPresumablyWorldsLargest
RetrofitScrubberin2009.....................................................................................
A5.ClosedLoopScrubberbyWrtsil........................................................................
A6.DryScrubberSystembyCoupleSystems,Germany.............................................
4
5
6
10
13
14
15
15
16
17
22
26
29
31
41
44
46
53
55
61
62
64
68
69
83
84
85
86
86
87
List of Tables
1. MARPOLAnnexVIMarineSOxEmissionReductionAreaswith
FuelSulfurLimits..................................................................................................
2. MARPOLAnnexVINOxEmissionLimits...............................................................
3. GlobalMarineFuelUseEstimatedfromIMOandSingaporePort
BunkeringStatistics2009......................................................................................
4. FeedstocksandDerivedFuels...............................................................................
5. MarineFuelPricesinJuly2012inUSD/MetricTonbyPort.................................
6. Comparisonof50/50BlendofAlgaeandF76PetroleumFuelwith
PetroleumF76.....................................................................................................
7. CostsAssociatedwithConvertingMarineVesselstoLNGOperation..................
8. FuelUsageandStorageVolumesforThreeTypesofVessels..............................
9. BarrierstoIntroductionofLNGandPossibleActions..........................................
10. 2020MarineFuelMix...........................................................................................
11. LNGUsageLevelsfortheBase,High,andLowCasesPredictedby
LoydsRegister......................................................................................................
12. CurrentOrderBookforNewLNGFueledVessels................................................
13. SummaryofEvaluationofPropellantSystems.....................................................
vi
9
10
14
21
35
38
43
44
52
56
56
59
72
Acronyms and Abbreviations

ABS
ASTM
BN
BTL
BV
CCS
CCW
CO2
CNG
CNOOC
DFDS
DME
DNV
DSME
ECA
EEDI
EGCS
EGR
EU
FAME
GATE
GHG
GL
GTL
GTM
HDRD
HFO
HRD
ICS
IF
IFO
IMO
ISO
JIV
AmericanBureauofShipping
AmericanSocietyforTestingandMaterials
basenumber
biomasstoliquid
BureauVeritas
ChineseClassificationSociety
CaliforniaCoastalWaters
carbondioxide
compressednaturalgas
ChinaNationalOffshoreOilCorporation
DetForenedeDampskibsSelskab
dimethylether
DetNorskeVeritas
DaewooShipbuilding&MarineEngineering
EmissionsControlArea
EnergyEfficiencyDesignIndex
exhaustgascleaningsystem
exhaustgasrecirculation
EuropeanUnion
fattyacidmethylester
GasAccesstoEurope
greenhousegas
GermanischerLloyd
gastoliquid
GreenTechMarine
hydrogenationderivedrenewablediesel
heavyfueloil
hydrotreatedrenewablediesel
InternationalChamberofShipping
intermediatefuel
intermediatefueloil
InternationalMaritimeOrganization
InternationalStandardsOrganization
jointindustryproject
vii
JV
LBG
LNG
LOA
LPG
LR
LS
LSFO
LSRF
MARPOL
MBM
MDO
MEGI
MGO
MnT
MSAR2
NaOH
NOx
PM
OSV
REM
RFO
RFS
RMG
RO/RO
S
SABIC
SCR
SECA
SI
SOx
STQ
TENT
TOTE
ULSD
jointventure
liquefiedbiogas
liquefiednaturalgas
lengthoverall
liquidpropanegas
LloydsRegister
lowsulfur
lowsulfurfueloil
lowsulfurresidualfuel
marinepollution;thus,theInternationalConventionforthe
PreventionofPollutionfromShips
marketbasedmeasure
marinedieseloil
mainenginegasinjection
marinegasoil
milliontonnes
MulPhaseSuperfineAtomizedResidue
sodiumhydroxide
nitrogenoxides
particulatematter
offshoresupplyvessel
RemOffshore
residualfueloil
RenewableFuelsStandard
residualmarinegas
rollon,rolloff
sulfur
SaudiBasicIndustriesCorporation
selectivecatalyticreduction
SOxEmissionControlAreas
sparkignition
sulfuroxide
SocietedestraversiersduQuebec
TransEuropeanTransportNetwork
TotemOceanTrailerExpress
ultralowsulfurdiesel
viii
USD
U.S.dollar(s)
WSF
WashingtonStateFerries
UnitsofMeasure
cSt
centistokes
dwt
deadweightton(s)
g
gram(s)
HP
horsepower
kg
kilogram(s)
km
kilometer(s)
kW
kilowatt(s)
kWh
kilowatthour(s)
m
meter(s)
MJ
megajoule
MT
Megaton;MetricTon
MW
megawatt(s)
nm
nauticalmiles
ppm
partspermillion
psi
poundspersquareinch
rpm
rotationsperminute
TEU
twentyfootequivalentunit
ix
Executive Summary Annex 41

The marine shipping industry is facing challenges to reduce engine exhaust emissions
and greenhouse gases (GHGs) in particular, carbon dioxide (CO2) from their ships.
International regulatory bodies such as the International Maritime Organization (IMO)
and national environmental agencies of many countries have issued rules and
regulationsthatdrasticallyreduceGHGandemissionsemanatingfrommarinesources.
These new rules are impacting ships that engage in international and coastal shipping
trade, the cruise industry, and ship owners and operators. Of particular note are
regulations in Emissions Control Areas (ECAs) such as the North American ECA, which
cameintobeingin2012,andtheSOxEmissionControlAreas(SECAs),whichhavebeen
in effect in the Baltic Sea and North Sea and English Channel since 2006 and 2007,
respectively. Ships operating in the ECAs and SECAs are required to use lower sulfur
fuels or add sulfur oxide (SOx) exhaust scrubbers. It is also expected that future ECAs
will be coming into effect in countries that see heavy ship traffic. Effecting nearterm
local(SECA/ECAdriven)nitrogenoxide(NOx)andSOxreductionsisthemostpressing
issue as a result of these regulations. Over the longer term, addressing GHG and
particulatematter(PM)emissionswillprovidefurtherenvironmentalchallenges.
Manyshipoperators,withpresentdaypropulsionplantsandmarinefuels,cannotmeet
these new regulations without installing expensive exhaust aftertreatment equipment
orswitchingtolowsulfurdiesel,lowsulfurresidual,oralternativefuelswithproperties
that reduce engine emissions below mandated limits, all of which impact bottomline
profits.Theimpactofthesenewnationalandinternationalregulationsontheshipping
industries worldwide has brought alternative fuels to the forefront as a means for
realizing compliance. The alternative fuels industry has grown dramatically for both
liquid and gaseous fuels. Each of these alternative fuels has advantages and
disadvantagesfromthestandpointoftheshippingindustry.
Thisreportexaminestheuseofalternativefuelsforusebythemarineshippingindustry
to satisfy or partially satisfy the new emissions and fuel sulfur limits. It also looks at
exhaustaftertreatmentdevicesthatcanbeusedtolowertheengineexhaustemissions.
Alargepartofthemarinefuelconsumption(approximately77%)isoflowquality,low
priceresidualfuelreferredtoasheavyfueloil(HFO),whichtendstobehighinsulfur
and is almost entirely consumed by largecargocarrying ships. The average fuel sulfur
contentofHFOusedtodayformarinedieselenginesis2.7%withamaximumallowable
limitof4.5%,whichpresentschallengesastherequiredfuelsulfurlevelsforuseinthe
ECAs and globally are lower. Almost 90% of the worlds marine fuel is used by cargo
ships.Thisreportdealsonlywithfuelssuitableforheavydutydieselenginesproviding
propulsion and auxiliary energy on commercial ships which is the bulk of marine fuel
consumption.
xi
Currently,themostpracticalsolutionistouselowsulfurfuelswheninanECAandother
situationsrequiringuseoflowsulfurfuels.Thereareliquidbiofuelsandfossilfuelsthat
arelowinsulfurandcansatisfythefuelsulfurrequirementsoftheECAsandMARPOL
(InternationalConventionforthePreventionofPollutionfromShips)AnnexVI.Inlieuof
usinglowsulfurliquidfuels,anotheroptionistheuseofscrubbersfittedintheengine
exhausttoremovetheSOx.
This report examines a variety of liquid fossil and biofuels. Liquid biofuels that are
available for marine use are biodiesel; fatty acid methyl ester (FAME); algae fuels;
methanol; hydrogenationderived renewable diesel (HDRD), which is also known as
secondgeneration biodiesel; and pyrolysis oil. The advantages and disadvantages of
thesefuelsformarineusearediscussed.
TheaftertreatmentapproachformeetingtheNOxandSOxlimitsistoinstallemission
compliant engines or selective catalytic reduction (SCR) equipment for NOx reduction
andexhaustaftertreatmentdevicesknowasscrubbersforSOxreduction.Whenlooking
at these technologies, the cost tradeoffs for their installation, operation, and
maintenance versus the costs of the alternative fuels must be considered. The report
discussestheeconomicsandbreakevenpointforusingscrubbersversusconventional
fossilfuelsbasedonoperationswithinanECA.
Gaseousfuelsareanotheroptionbutrequireadifferenttypeoffuelhandlingsystem,
fuel tanks and gas burning engines that are not currently in use on most ships. The
gaseous fuels that are available for marine use are natural gas and propane (liquid
propane gas [LPG]). Not only are these fuels very low in sulfur content, they combust
such that NOx, PM, and CO2 are also reduced. Natural gas can be carried as a
compressedfuelcalledcompressednaturalgas(CNG)orinaliquidstatecalledliquefied
naturalgas(LNG).
Currently,thepriceofnaturalgasisveryattractiveandassuchisagoodcandidatefor
servingasashipsfuel.Thereareanumberofshipsthathavebeenbuilttousenatural
gasasfuel,mostlyinthecoastwisetradeoronfixedroutessuchasferries.
At present, vessels using natural gas as a fuel are in the small to mediumsize range
withlargershipsbeingbuiltorconvertedforoperationonLNGfuel.Theonlylargeships
currentlyusingLNGasafueloninternationalvoyagesareLNGcargocarriers.
ForLNGtobecomeanattractivefuelforthemajorityofships,aglobalnetworkofLNG
bunkeringterminalsmustbeestablishedorLNGfueledshipswillbelimitedtocoastal
tradeswherethereisanLNGbunkeringnetwork.Thesituationissometimesdescribed
asachickenandeggdilemma.Untilthebunkeringinfrastructureisinplace,theship
ownersmaynotcommittooperatingnaturalgasfueledshipsandvisaversa.Currently,
LNGbunkeringismoreexpensiveandcomplicatedthanfossilfuelbunkeringandisonly
availableinalimitednumberofplaces.TheportofStockholm,Sweden,hasestablished
xii
anLNGbunkeringportwithdocksidefuelingandaspecialpurposeshipthatperforms
shiptoshipLNGfueling.
As the shipping industry considers alternatives to HFO, part of the market will shift
toward marine gas oil (MGO) and part toward LNG or other alternative fuels. Marine
vessels equipped with scrubbers will retain the advantage of using lowerpriced HFO.
Shipping that takes place outside ECA areas might choose HFO or lowsulfur fuel oil
(LSFO)dependingonfutureglobalregulations.ShipsoperatingpartlyinECAareaswill
probablychooseMGOasacompliancefuel.HeavyshippingwithinECAareas,however,
mightbeincentiveenoughforacompleteshifttoLNG.
Compliance with the new emission requirements will raise operating costs for ship
owners and operators in terms of new construction ships that will have more
complicatedfuelsystemsandperhapsaftertreatmentdevicesandmoreexpensivelow
sulfurfuelswhenintheECAsandotherlowsulfurcomplianceportsandcoastalwaters.
Existingshipsthatdonothavedualtanksmayhavetoberetrofittedwithdualfossilfuel
systemssotheycanperformfuelswitchingwhentheyenteranECA.
xiii
xiv
1.
Introduction
Recent sulfur and emissionsrelated limits imposed on fuels used in the shipping
industryarecausingtheindustrytolookatalternativefuelsasawayofcomplyingwith
thenewlimits.Thisstudyfocusesonthedetailsofthesenewemissionsrequirements,
theirimplementationtimeframes,thetypesofalternativefuelsavailableforcomplying
withtheserequirements,thecostsofcompliancedependingonthepathwaytaken,and
alternativemethods(suchasexhaustgasscrubbers)forloweringtheexhaustemissions.
The report discusses in detail the advantages and disadvantages of liquid fossil and
gaseousfuelsandbiofuelsthatareavailableformarineuseandcanhelpshipowners
andoperatorscomplywiththefuelsulfurandexhaustemissionlimits.
Also discussed are marine vessels currently using alternative fuels and vessels being
convertedtouseorbeingbuiltwithonboardpowerpropulsionplantsusingalternative
fuels.
Last,thisreportassessesthefutureofalternativemarinefuelsanddrawsconclusions.
2.
Background
The worlds total liquid fuel supply currently stands at approximately 4,000 Megatons
(MT)peryear.Marineliquidfuelsconstituteasignificantproportionat300400MTper
year.Almost90%oftheworldsmarinefuelisusedbycargoships.Passengervessels,
fishing boats, tug boats, navy ships, and other miscellaneous vessels consume the
remaining10%.
Thevastmajorityofshipstodayusedieselenginessimilarinprincipletothoseincars,
trucks,andlocomotives.However,marinefuelsdifferinmanyaspectsfromautomotive
enginefuels.
Thequalityofmarinefuelsisgenerallymuchlowerandthequalitybandismuchwider
than are those of landbased fuels. Marine engines must accept many different fuel
gradesoftenwithlevelsofhighsulfurcontentthatwouldseriouslyharmthefunctionof
exhaust gas recirculation (EGR) and catalyst systems on automotive engines. The
viscosityofmarinefuelsisgenerallymuchhigherupto700cSt,whereasroaddiesel
fuel rarely exceeds 5 cSt. Most marine fuels thus require preheating to enter the fuel
system.
This finding also means that traditional emissions abatement technologies for road
based transport suchasdiesel particulate filters, exhaust gas recirculation systems,
andoxidationcatalystscannoteasilybeusedonships.Therisksofsulfurcorrosion
and very high soot emissions call for different solutions such as scrubbers or alkaline
sorptionsystemsasseparatesolutionsorincombinationwithtechnologiesknownfrom
roadbasedemissionsabatementtechnologies.
Recent domestic and international efforts to reduce the impact of greenhouse gases
(GHGs)onclimatechangeandengineemissionsthataffectthehealthofmanyhasled
international regulatory bodies such as the International Maritime Organization (IMO)
andnationalenvironmentalagenciestoissuenewrulesandregulationsthatdrastically
reduceGHGsandemissionsemanatingfrommarinesources.Thesenewruleshavefar
reachingimplicationsfortheinternationalshippingtrade,thecruiseindustry,andship
owners and operators in particular. Of particular note are regulations in Emissions
ControlAreas(ECAs)suchastheNorthAmericanECA,whichwentintoeffectin2012,
andtheSOxEmissionControlAreas(SECAs),whichhavebeenineffectontheBalticSea
and North Sea and English Channel since 2006 and 2007, respectively. On August1,
2012, enforcement of the North American ECA commenced. The North American ECA
covers the coastal waters of the UnitedStates and Canada out to 200 nautical miles.
Ships operating in the ECAs and SECAs are required to use lowersulfur fuels or add
sulfuroxide(SOx)exhaustscrubbers.RegulationsforaCaribbeanECAwillgointoeffect
for Puerto Rico and the U.S. Virgin Islands. Allowing for the lead time associated with
the IMO process, the U.S.Caribbean ECA will be enforceable in January 2014 (Ref.1).
ThereisthepotentialthatECAswillbeestablishedfortheNorwegianandBarentsSea,
MediterraneanSea,Japan,Australia,MexicoandPanama,theArctic,andAntarcticain
the future (Ref. 2). The rules for these areas will mandate reductions in emissions of
sulfur (S), nitrogen oxides (NOx) and particulate matter (PM). Current and possible
FutureECAsareshowninFigure1.
Figure1.CurrentandPossibleFutureECAs(Source:Ref.2)
Approximately10%oftheworldsshippingoccurswithintheBalticSearegion(Ref.3),
whichisshowninFigure2.

Figure2.NorthEuropeanSECA
EffectiveasofAugust11,2007(Source:Ref.4)
Someoftheregulatoryandcompetitivechallengesfacingshipoperatorsareshownin
Figure3.
Elements in Figure 3 are sometimes competing against each other, especially

considering the reduction of NOx, sulfur, and carbon dioxide (CO2). As an example,
achievingareductionofsulfurbyusingawetscrubbermeansincreasingpowerusage
significantlytopumpwater,which,intheend,willleadtoanincreaseinCO2emissions,
as well as other pollutants associated with power production. Similarly, although NOx
could be reduced by lowering the combustion temperature, that adjustment reduces
the efficiency of the main engine and hence increases CO2 and sulfur emissions. A
selectivecatalyticreduction(SCR)installationtoreduceNOxuseschemicals,whichalso
deliverapenaltyintermsofCO2emissionsandtheenvironmentandshouldbetaken
intoconsideration.
Possibilitiestoreduceemissionsareinfluencedbythefreightratesthatshipownerscan
obtain and the fuel prices and taxes of the market. The dilemma therefore lies in
devisinganincentivetoincreaseefficiencyandtherebylowershipsfuelconsumption.
Shorttermlocal(SECA/ECA)NOxandSOxreductionsarethemostpressingissues.Over
thelongerterm,addressingGHGandPMemissionswillprovidefurtherenvironmental
challenges.
Theshippingindustryalsofacesdiminishingshippingratesandasignificantriseinfuel
prices, including taxes in the form of marketbased measures (MBMs) to promote the
reduction of GHG emissions. Another relevant factor is that acquisitions or takeovers
are common in the marine sector. Ship operators face the risk of takeover by
competitorsiftheyarenotsufficientlystrong.Thereisariskthatoperatorsfocusingtoo
muchonenvironmentalissueswillbetakenoverbystrongercompetitors(Ref.5).
In particular, freight rates in 2011 and at the beginning of 2012 were often at
unprofitable levels for ship owners. Substantial freightrate reductions were reported
within the dry bulk, liquid bulk, and containerized cargo segments. Vessel oversupply
continued to be a driving factor behind reductions in freight rates. Ship operators
attempted torealize savings through greater economiesof scale by investing in large
capacityshipsinthetankeranddrybulkmarketsegments(Ref.6).
Incentives in the form of MBMs to reduce GHG emissions from international shipping
could result in a fuel levy (tax). The international shipping industry has indicated a
preferenceforthefuellevyratherthananemissionstradingscheme(Ref.6).
NewVessels
NOx
Reduction
Policing
Sulphur
Reduction
CO2
Reduction
Ship
Operators
Challenges
Future
Fuel Taxes
Freight
Rates
Figure3.ShipOperatorsChallenges
Manyshipoperatorswithpresentdaypropulsionplantsandmarinefuelscannotmeet
these new regulations without installing expensive exhaust aftertreatment equipment
orswitchingtolowsulfurdiesel,lowsulfurresidual,oralternativefuelswithproperties
that reduce engine emissions below mandated limits, all of which impact bottomline
profits.Theimpactofthesenewnationalandinternationalregulationsontheshipping
industries worldwide has brought alternative fuels to the forefront as a means for
achieving compliance. The alternative fuels industry has grown dramatically for both
liquid and gaseous fuels. Each of these alternative fuels has advantages and
disadvantagesfromthestandpointoftheshippingindustry.Itisvitallyimportantthat
the nations recognize the impact that the new marine regulations will have on their
marineindustriesandimplementpoliciesthatwillminimizetheseimpactsandpavethe
wayforsmoothtransitionstouseofalternativemarinefuelsandoperatingprocedures
that will meet GHG and emissions limits without jeopardizing international maritime
trade.
3.
Current Situation
Worldwide,marinefuelaccountsfor20%oftotalfueloildemand(Ref.7),notingthat
fueloilisexcludinggasoline.Currently,annualglobaldemandformarinefuelisgreater
than300MTandconsistsofbothdistillateandresidualfuels.Alargepartofthemarine
fuel consumption (approximately 77%) is of lowquality, lowprice residual fuel also
known as (a.k.a.) heavy fuel oil (HFO), which tends to be high in sulfur and is almost
entirelyconsumedbylarge,cargocarryingships.Theaveragefuelsulfurcontentofthe
HFO formulations used today for marine diesel engines is 2.7% with a maximum
allowable limit of 4.5% (Ref. 8). (See Figure 11 for average fuel sulfur limits.) The fuel
must also be heated to lower the viscosity so it flows easily and then is put through
purifiersandfilterstoremovecontaminantsbeforeitispumpedtothedieselengines.
3.1
Legislation for Marine SOx Reduction
New and existing regulations derived from the International Convention for the
PreventionofPollutionfromShips(MARPOL)affectingtheSOxemissionsfromshipsare
summarizedinTable1.
Table1.MARPOLAnnexVIMarineSOxEmissionReductionAreaswithFuelSulfur
Limits
EuropeanSECAs
NorthSea,English
Channel
BalticSea
NorthAmericanECAs
UnitedStates,Canada
Global
Year
FuelSulfur(ppm)
CurrentLimits
10,000
2015
CurrentLimits
2015
1,000
10,000
1,000
2012
2015
2012
2020a
10,000
1,000
35,000
5,000
FuelSulfur(%)
1
0.1
1
0.1
1
0.1
3.5
0.5
Alternativedateis2025,tobedecidedbyareviewin2018.
3.2
Legislation for Marine NOx Reduction
InadditiontohavingtomeetthefuelsulfurlimitsinTable1,shipsoperatingintheECAs
mustmeettheMARPOLAnnexVIMarineTierIIINOxlimitsin2016.
Table 2 (Ref. 9) shows the applicable NOx limits for ships and the dates that they
becameorwillbecomeeffective.
Table2.MARPOLAnnexVINOxEmissionLimits(Source:Ref.9)
Tier
TierI
TierII
TierIII
a
Date
2000
2011
2016a
NOxLimit,g/kWh
130 n < 2000
45 n0.2
44 n0.23
9 n0.2
n<130
17.0
14.4
3.4
n2000
9.8
7.7
1.96
InNOxEmissionControlAreas(TierIIstandardsapplyoutsideECAs).
NOxemissionlimitsaresetfordieselenginesaccordingtoenginemaximumoperating
speed (n,rpm), as shown in Table 2 and presented graphically in Figure 4. Tier I and
TierIIlimitsareglobal,whereastheTierIIIstandardsapplyonlyintheNOxECAs.TierIII
NOxlimitswillapplytoallshipsconstructedonorafterJanuary1,2016,withengines
over130kWthatoperateinsideanECANOxarea.
Figure4.IMODieselEngineNOxEmissionLimits
10
3.3
Compliance with Marine SOx and NOx Legislation
Given the proliferation of the ECAs and the possibility that more ECAs, such as in the
MediterraneanSeaandthecoastofMexico,maycomeintobeinginthefuture,thereis
astrongincentiveforshipownersandoperatorstoexploretheuseofalternativefuels
tosatisfythelowerfuelsulfurandNOxlimits.
AnotherapproachformeetingtheNOxandSOxlimitsistoinstallemissionscompliant
enginesorSCRequipmentforNOxreductionandexhaustaftertreatmentdevicesknown
as scrubbers for SOx reduction. When looking at these technologies, the cost tradeoff
fortheirinstallation,operation,andmaintenanceversusthecostofthealternativefuel
mustbeconsidered.
This report deals only with fuels that are suitable for heavyduty diesel engines
providing propulsion and auxiliary energy on commercial ships, which is the bulk of
marinefuelconsumption.
Turbine engines are rarely used on commercial ships. Part of the reason is that gas
turbinesaregenerallycostlyandlessefficientthandieselenginesandthereforeareless
suitedforcommercialuse.Thesamegoesforsparkignition(SI)engines.Steamturbines
are extremely fuel flexible but are also slow starting. Furthermore, they require a
rathersteadyloadinthehighband,whichiswhytheyarenotcommon.
Otherfuelsnotincludedforpractical,economical,orsafetyrelatedlimitationsofships
arethefollowing:
Nuclearfuels
o Thorium
o Uranium
o Plutonium
o H3
Windorsolarpower
o Sails
o Kites
o Windturbines
o Photovoltaiccells
Solidboilerfuels
o Coal
o Coke
o Peat
o Lignite
GasturbineorSIenginespecificfuels
o Kerosene
o Ethanol
o Gasoline
11
Gasificationfuels
o Woodandothercellulosicbiomass
o Sludgeandotherorganicwastes
Electrochemicalfuels
o Hydrogen
o Batteries
AdistinctionshouldbemadebetweendropinfuelsasdefinedinSection5,whichcan
be distributed through existing channels, and non dropinfuels, which require a
completely new infrastructure. Marine fuels in particular should be available
everywhere in the world. For this reason, particularly rare and exotic fuels are not
includedinthisdiscussionoffuturemarinefuels.
12
4.
Fuel Prices and Availability
Thissectionexaminesthecostandavailabilityofmarinefuels.
4.1
Current Marine Fuels (World Market)
Thereissomeuncertaintyastoglobalmarinefuelconsumption.Thevariationbetween
studies suggests a possible range between 279400MT/year. On the basis of several
studies,IMOestimatesthetotal2007fuelconsumptionat333MT/year(Figure5).
Figure5.GlobalMarineFuelConsumptionEstimates,IMO2009
(Source:Ref.11)
MarinefuelstandardsaresetinISO(InternationalStandardsOrganization)8217.There
are10gradesofresidualfuelofwhich380and180arethemostcommon.
TheIMOestimatesthat77%ofallmarinefuel(257MT/year)isresidualfueloil(RFO).
HighsulfurRFOuseisconcentratedonthelargestlonghaulvessels(Ref.10).
Figure 6 shows a typical fuel mix sold in Singapore one of the worlds busiest
seaports.
13

Figure6.TypicalHeavyMarineFuelTypeDistribution
(Source:SingaporePortBunkeringStatistics2009,
http://www.mpa.gov.sg/sites/port_and_shipping/port/bunkering/
bunkering_statistics/bunker_sales_volume_in_port.page)
BecausetheSingaporePortsellspracticallynoMGOormarinedieseloil(MDO),itwill
beassumedthatthedistributionisvalidforheavyfuelsonly(i.e.,77.2%ofthemarket).
Distillate fuels will thus add up to 22.8%. The resulting fuel statistics, including lighter
fueltypesnotsoldinSingapore,areshowninTable3.
Table3.GlobalMarineFuelUseEstimatedfromIMOandSingaporePortBunkering
Statistics2009
FuelType
OtherNames
Heavyfuel500CSt HSFO500CSt,RFO,RMG 500a,
IFO500,MFO500
Heavyfuel380CSt HSFO380CSt,RFO,RMG 380,
IFO380,MFO380
Heavyfuel180CSt HSFO180CSt,RFO,RMG 180,
IFO180,MFO180
Distillatefuels
Diesel,Marinediesel,MGO,
MDO,LFO
Others
Total
a
RMG=residualmarinegas;IFO=intermediatefueloil.
14
MarketPercent
(%)
Megatons
perYear
10
33
60
200
20
23
77
100
333
4.2
Global Fuel Consumption by Vessel Type
TheIMOestimatesthetotalworldfleetasof2007tobe100,243vesselsabove100GT
(Ref.11). The fleet consists of approximately 40% cargo ships, 20% tankers, and 25%
containerships,accordingtoDetNorskeVeritas(DNV)(Ref.12);seeFigures7and8.
Figure7.TheTotalWorldMarineFleetAccordingtoIMO(Source:Ref.11).
Only 25% of the vessels run on RFO; however, they account for 77% of global marine
fuelconsumption.
Service,passenger,
fishing
Cargoships
Figure8.WorldBunkerFuelDemand(Source:Ref.10)
15
4.3
Fuel Cost
Highviscosity, highsulfur fuel oil (HSFO) is the least costly fuel, whereas prices for
lighter fuels with less sulfur generally have higher costs. The baseline for HSF380 is
about $700 USD/ton. Marine diesel MDO (or MGO) fuels are about $1,000 USD/ton.
Figure9showsindexpricesfromBunkerworld.
Figure9.BunkerworldIndexPricesofHFSO380(top)andMDO(bottom)
(Source:Ref37)
16
Theoncostsofdifferentlightfuelsaresomewherebetween$100and$400USD/ton,as
showninFigure10.Thedifferencevarieswithtime.
Figure10.CostofLighterLowSulphurFuelsCompared
toHighSulphurBunkerFuel(Purvin&Gertz)(Source:Ref.10)
World LNG prices are in the range of 0.05 EUR/kWh, which corresponds to about
$1,000USD/ton, which is comparable to light fuel (MGO or MDO). However, LNG
typically holds 2025% more energy per ton compared to MDO, so the price is
attractive.
17
18
5.
Alternative Marine Fuel Incentives
Currently,thereareanumberofincentivesforusingalternativefuels.Theseincludethe
following:
TheMARPOLAnnexVISOxandNOxlegislationdiscussedinSection2.
Thepricefluctuationsoffossilfuels.
ThepredictionofadieselfuelshortageinEurope(Ref.13).
Possible scarcity of lowersulfur distillate fuel in 2015 when the switch from
1.0%to0.1%sulfurrequirementtakeseffect(Ref.2).
CurrentECAswiththeirSOxandNOxlimits.
TheproliferationofECAs,withthepossibilitythatfutureECAsmaycomeinto
force in the Mediterranean Sea and off the coasts of Mexico and Singapore
(whichhas,infact,requestedanECA).
In the United States, the Renewable Fuels Standard (RFS), which requires a
certainamountofrenewablefuelsaspartoftheavailablefuelinventory.
TheintroductionbyIMOinMARPOLAnnexVIoftheEnergyEfficiencyDesign
Index (EEDI), which would make mandatory some measures to reduce
emissions of GHGs, such as CO2 from international shipping. The EEDI
standardsphaseinfrom2013to2025.TheEEDIcreatesacommonmetricto
measureandimprovenewshipefficiency.Thismetriciscalculatedastherate
ofCO2emissionsfromaship.
Alternative fuels that can help satisfy the above requirements and having certain
attributes can possibly be substituted for the fossil fuels currently in use. These
alternativefuelsneedtohavethefollowingcharacteristics:
Ideally,thefuelsshouldnothaveamajorimpactontheengineandshipboard
fuelsystemssuchthatthesesystemsmustbeextensivelymodifiedorreplaced.
No degradation of engine performance occurs with their use that would

requireenginereplacementorextensivemodification.
ThefuelslowertheengineSOxandNOxemissions.
The fuels are competitively priced with the current Heavy Residual Fuel Oil
priceofapproximately$700(USD)/ton(Ref.14).
19
The alternative fuels are available in sufficient quantities worldwide or

regionallyforbunkering.
Thefuelscanbemixedwithcurrentfossilfuels.
Thefuelsaresafetouseanddonotpresentanymajorenvironmentalrisks.
Afuelsatisfyingtheserequirementsiscalledadropinfuel.
In addition to regulatory and monetary incentives for alternative fuels, the Trans
European Transport Network Executive Agency has taken action through its
2011EU92079S Project to identify and minimize the barriers when building and
operatinganLNGfueledvessel(Ref.15).
Theprojectwasselectedforfundingunderthe2011TENT(TransEuropeanTransport
Network) Annual Call, and will examine the technical requirements, regulations, and
environmentaloperationpermitsthatneedtobemetinordertoshiftfromtraditionally
fueledenginestoLNG.LNGisrapidlyemergingasacheaperandmoreenvironmentally
friendly fuel for the maritime sector, and its uptake is encouraged by the European
Union.
Specific aspects related to the manufacturing, conversion, certification, and operation

phases of an LNGfueled vessel will be analyzed. These results will be exchanged with
other ongoing LNGrelated projects, as well as with the European Maritime Safety
Agency.Theprojectwillbeimplementedinapartnershipwithstakeholdersconsisting
of shipowners, cargo owners, LNG suppliers, ports, and marine equipment
manufacturers. Among participating shipowners will be Viking Line, operator of the
2,800passenger,dualfuelcruiseferrytheVikingGrace.
The project will receive 1.2 million in funding from the European Union under the
TENTprogram.Thiscontributionconstitutes50%oftheoverallbudget.
The projectwill be managed by the TransEuropean Transport Network Executive

Agencyandissettobecompletedbytheendof2014(Ref.16).
20
6.
Alternative Marine Fuels and Engines
Currently,thereareliquidfossilfuels,liquidbiofuels,andgaseousfuelsthatareinuse
orcanbeusedbyshipsforcompliancewiththeexistingandforthcomingenvironmental
airpollutionrequirements.
The feedstocks for current and future marine fuels are shown in Table 4. Of these;
biodiesel(FAME),methanol,algae,andHDRDareconsideredviablealternativemarine
fuelsandarediscussedindetailinSection6.3.
Table4.FeedstocksandDerivedFuels
Feedstock
Naturalgas,
biogas
Crudeoil
Vegetableoils,
animalfats,
algaelipids
Biomass
Fuels
CNG,LNG
a
IFO,LSFO,LPG,
MGO
Biodiesel(FAME),
HDRD(second
generationbiodiesel)
BTL,aGTL,methanol,
DME,pyrolysisoil,LBG
CNG=compressednaturalgas;BTL=biomasstoliquid;GTL=gastoliquid;DME=dimethyl
ether;andLBG=liquefiedbiogas.
There are liquid biofuels and fossil fuels that are low in sulfur andcansatisfy thefuel
sulfurrequirementsoftheECAsandMARPOLAnnexVI.Inlieuofusinglowsulfurfuels,
anotheroptionistousescrubbersfittedintheengineexhausttoremovetheSOx.
TheEffshipProjectinvestigatesmethanolanddimethylether(DME)asalternativefuels
inWorkPackage2(Ref.17).ThefueloptionsmentionedareLNG,methanol,DME,and
gastoliquids(GTL)formulations.However,noconclusionhasyetbeenreached.
MANDiesel&Turboselectronicallycontrolled,gasinjected,lowspeedmainenginegas
injection (MEGI) engine types are available in dualfuel versions with the LPGfueled
version designated MELGI (Ref. 18). The liquid MEGI engines performance is
equivalentintermsofoutput,efficiency,andrpmtoMANDiesel&TurbosMECand
MEBseriesofengines.AstheliquidMEGIenginesfuelsystemhasfewmovingparts,it
isalsomoretolerantofdifferentfueltypesandaccordinglycanrunonDME.Itcanburn
gasorfueloilatanyratiodependingonthefuelaboardandtherelativefuelcost,andit
operateswithnomethaneslip.
21
DualfuelsystemsareavailablebothformethanolandLPG(propanedualfuel[Ref.19]).
6.1
Liquid or CrudeBased Fossil Fuels (IFO, LSFO, MGO,

and MSAR2 Bunker Oil)
AccordingtotheIMO(Ref.20),about77%oftotalmarinefuelsusedonaglobalbasis
are residual fuels (e.g., IFOs). LSFOs and MGOs are used as secondary fuels for
compliancewithECAandSECArestrictions.
Along with global warming, potential sulfur content remains the main concern with
conventionalmarinefuels.Thesulfurcontentisgenerallyhighcomparedtoroadfuels,
as shown in Figure 11. According to DNV, the total SO2 emission from ships is about
130kilotonsperyear.
Figure11.SulfurContentofConventionalMarineFuels(Source:Ref.4)
The emissions of both sulfur and other pollutants can also be reduced effectively by
boosting the efficiency of the propulsion system. It is worth mentioning that marine
transportonlargecontainershipsonlyrequires2to3gramsoffuelperton*km(Maersk
Lineaverage).Roadtransportbytruckrequiresabout15g/ton*km(globalaverage).
22
Someconventionalmeansofefficiencyboostingmaybeveryeffective.Forinstance,the
anticipatedMrskTripleEshipsoffer50%CO2reductionbymeansofa16%increasein
container capacity, a 19% reduction in engine power, and a design speed that is
2knotslower(Ref.21).
Existing ships such as the Emma Maersk have turbocompounding and other
technologiestoincreasetotalefficiency.
Fossil fuels that are available for marine use are ultralow sulfur diesel (ULSD) fuel,
whichisthetermusedtodescribedieselfuelswithsubstantiallylowersulfurcontent,
andlowsulfurresidualfuel(LSRF).ForULSDtheamountofsulfurcanvaryfromcountry
to country. For example in the United States and Canada it is 15 ppm and in other
countriesitcanbeaslowas10ppmandhighas50ppm.Notallcountriesrequirethat
marinedieselbeULSDbutintheUSandCanadaULSDisrequiredformarinedieselfuel
aswellasovertheroadandoffroaddieselpoweredvehicles.Asof2006,almostallof
the petroleumbased diesel fuel available in Europe and North America is of a ULSD
type.
LSRFisanotherfossilfuelthatcansatisfythecurrentrequirementsforlowfuelsulfur
content.LSRFcanbeproducedby(1)therefineryprocessesthatremovesulfurfromthe
oil (hydrodesulphurization), (2)the blending of highsulfur residual oils with lowsulfur
distillateoils,or(3)acombinationofthesemethods.
Itisconceivablethatthesefuelswillsufficeforthemarineindustryforlowsulfurfuels
until2016whentheNOxrequirementsareeffective.Atthistime,theuseofthesefuels
will require the installation of NOx aftertreatment devices such as SCR, EGR, or the
installationofemissionscomplaintenginestosatisfytheNOxlimitswithintheECAs.
Itispossiblethatconventionalfossilbasedfuelswillremainthefuelofchoiceforalong
time. In different scenarios, the IMO projects a rather low penetration of alternative
fuels,rangingfrom510%(tankshipstocoastwise,respectively)in2020toamaximum
2050% (tank ships to coastwise, respectively) in 2050 (Ref. 20). Thus, fossil fuels are
predictedtobepredominantintheforeseeablefuture.
Maersk successfully tested a lowcost alternative to heavy fuel oil called MSAR2
(MulPhaseSuperfineAtomizedResidue)bunkeroilusinga2strokemarinedieselengine
ofaMaerskLinecontainership,anenginefairlytypicalofatypetobefoundonmodern
ships.Thetestswerecarriedoutinlate2012.
Quadrise,theinnovatorsofthisMarineMSAR2bunkeroil,anticipatethatcommercial
volumeswillbeproducedprogressivelyfrommid2013,withafullcommercialrollout
thefollowingyear.
Quadrisewasformedinthe1990sbyagroupofformerBPspecialistswhodeveloped
newtechnologytoproduceMSARfromavarietyofheavyhydrocarbonswithsuperior
23
combustion characteristics. In 2004, a longterm alliance agreement was established

withAkzoNobel,aworldleaderinsurfacechemistry.
MSARFuelTechnologyrendersheavyhydrocarbonseasiertousebyproducingalow
viscosityfueloilusingwaterinsteadofexpensiveoilbaseddiluents,andalsoproducesa
superiorfuelwithenhancedcombustionfeatures.
The process involves injecting smaller fuel droplets in a stable waterbased emulsion
intothecylinder,resultinginacompletecombustionthatproduceslowerNOxandPM
exhaustgasemissions.
Besidesthelowcostbenefitsitofferstoshipownersasaheavyoilbunkerfuel,thenew
technologyhelpsoilrefinersasitfreesupvaluabledistillatestraditionallyusedforHFO
manufacture, providing a viable alternative process for handling the bottom of the
crudeoilbarrelwithoutsignificantexpenditureandresultinginincreasedprofitability.
TheMSARprocesstransformshydrocarbonsthataresolidatroomtemperatures(and
havetobeheatedtotemperaturesover100Cinordertoflow)intoaproductthatcan,
dependingonclientrequirements,bestoredandtransportedatambienttemperatures
of1530C.Asaresult,theenergyrequirementsforhandlingandtransportingMSAR
are lower than those of HFO, which is generally handled at temperatures in excess of
50C.
MSAR fuel can be handled using the same equipment and vessels used for
conventionalHFO.OperatingproceduresandcontingencyplansdevelopedforHFOare
generallysuitable,andwherenecessaryadapted,forMSARpurposes(Ref.22).
6.2
Liquid Biofuels (Fuels from Vegetable Oils and Animal

Fats, Straight, Hydrogenated, or Esterified)
Liquid biofuels available for marine use are biodiesel, FAME, algae fuels, methanol,
hydrogenationderived renewable diesel (HDRD), which is also known as second
generationbiodiesel,andpyrolysisoil.
SoybeanoilhasbeenusedbytheMolsLinien(Ferryline)inDenmark.Fishandchicken
oilshavealsobeentested.
Thepotentialforoilsandfatshasbeenexploitedbytheautomotivesectorforyears,so
it is questionable how much potential actually remains. Drawbacks of these fuels are
limitedmiscibilitywithIFOfuel,sensitivitytofrost,andtheproblemofconservation.
Biodiesel(FAME),algaefuel,methanol,HDRD,andpyrolysisoilarevirtuallysulfurfree.
The algae and HDRD fuels are compatible with diesel engines and their associated
shipboardfuelsystems.Biodiesel(FAME)isnotcompatiblewithcertainnonmetallicand
24
metallic materials and usually requires modification of current engines and shipboard
fuelsystems.Pyrolysisoilishighinacidity,hasalowcetanenumber,ispracticallysulfur
free,andisnotmixablewithdieselfuelsomustbemodifiedformarineuse(Ref.23).
FAMEisawellknownandprovenblendingcomponentforroadbaseddieselmachines
buthasnotfounditswayintouseasamarinefuel.
Within the ISO 8217 framework, FAME is currently being adapted as a blending
component for heavy marine fuel. It is foreseen that a volume concentration ofup to
7%willbeallowedinthenearfuture.
Fattyacidmethylestersarearefinedversionofvegetableoilsoranimalfats.Theyare
commoninroadtransportandwerealsousedinDenmarkbyM/FBittenClausenuntil
March2011.Theprojectwassuccessfulwithablendof25%animalbasedFAME.
FAMEingeneraldoesnotcauseanyproblemsintheengineitself.Longtermstorage,
however, can be problematic. Tank paint and engine gaskets, hoses, nonmetallic, and
somemetallicfuelwettedpartsmayneedtobeadaptedtoFAME.
ThemainproblemwithFAMEissustainabilitybecauseFAMEproductionreliesheavily
onpalmoilproduction,whichisofteninconflictwiththepreservationofnaturalrain
forests.Therefore,FAMEisgenerallynotseenasaviablelongtermoption.
In addition to the sustainability problem, the use of FAME in some U.S. marine
applicationshasnotbeensuccessful.TheU.S.NavyprohibitstheuseofFAMEbiodiesel
giventhattheNavyuseswatertodisplacethefuelinitsshipboardtanksforballastand
hascentrifugalpurifiersonboardtoseparatethefuelandwater.FAMEcausesahuge
emulsionanddoesnotallowthefueltobeseparatedfromthewater.FAMEiscorrosive
tometalsurfacesonceitmixeswithwaterandthemixturefallsout.TheUnitedStates
CoastGuardhadmicrobialgrowthproblemsononeofitscuttersinDuluth,Minnesota,
when it lifted a 2% blend of FAME biodiesel. The problem prevented the vessel from
sailing.Thetankshadtobeemptiedandcleanedandthevesselhadtoberefueledwith
FAMEfreedieselfuel.Thecutternowprocuresthefuelbeforethemandatoryblendto
avoidfuelqualityissues(Ref.24).
6.2.1 Methanol
Methanol as a general fuel has been recommended by CEESA, an interdisciplinary
research cooperation from Denmark. The reason is that biomasstomethanol/DME is
foreseen to be the most energyefficient pathway to procuring transport energy by
2050.
Conversionsofmarinevesselstomethanolaresignificantlylesscostlythanconversions
toLNGbecauseofthesimplicityofthestoragesystemformethanol.Althoughmethanol
25
itselfisslightlymorecostlythanLNG,thetradeoffbetweenmethanolandLNGinvolves
thecomplexityofthefuelsystemversusthecostofthefuel.
Methanolincreasestheriskofcorrosion,whichmustbemetwithsufficientupgrading
offueltanks,etc.,andthelowenergycontentpercubicmeter(m3)ofmethanolmeans
thatittakesupcargospaceontheship.
Methanolhaspropertiesthataresimilartothoseofmethanewhenitisinjectedintoan
engine.Itcanbeusedinadualfuelconcept,asproposedbyWrtsil(Figure12).
Figure12.WrtsilDirectInjectionDualFuelConcept
forMethanolinLargeFourStrokeEngines
6.2.2 Biocrude(PyrolysisOil)
Biocrude,suchastheGermanbioliqSynCrude,isanintermediarypyrolysisoilproduced
from, for example, the CatLiqTM process. The feedstock can be either solid biomass or
sludge. Like fossil crude, biocrude can also be refined into gasoline or diesellike
products. However, biocrude in its initial form is perhaps the cheapest liquid biofuel
possible.
26
Themainchallengesareits:
Lowcetanenumber
Highwatercontent
Poorlubricity
However,theuseofbiocrudeasafeasiblemarinefuelisyettobeproven.
6.3
Gaseous Fuels
Gaseous fuels available for marine use are natural gas and propane (i.e., LPG). These
fuelsarenotonlyverylowinsulfurcontentbuttheyalsocombustsuchthatNOx,PM,
and CO2 are reduced. Natural gas can be carried in a compressed state called
compressednaturalgas(CNG)orinaliquidstatecalledliquefiednaturalgas(LNG).
PropaneorLPGismentionedfromtimetotimeasapotentialmarinefuelscandidate.
However,thereseemstobeverylimitedmaterialavailableonLPGsviabilityasamarine
fuel.ThegeneralviewaroundtheglobeseemstobethatLPGisapremiumproductand,
as such, is priced accordingly and is too expensive compared to other alternative fuel
options. So, although the supply is there, its current markets are in automotive
transportation and domestic heating and cooking, markets that have a different price
referencethanshipping.
In terms of safety, propane is heavier than air and thus presents an explosive safety
hazardifitweretoaccumulateinthebilgesorlowsectionsofashipsengineroomin
theeventofaleakinthefuelsystem;thus,itisnotconsideredsafeforshipboarduse.
CNG is made by compressing natural gas to less than 1% of the volume it occupies at
standardatmosphericpressure.Itisstoredanddistributedincontainersatapressureof
200248bar(29003600psi),usuallyincylindricalorsphericalshapes.
LNG achieves a higher reduction in volume than CNG. The liquefaction process
condensesthenaturalgasintoaliquidatclosetoatmosphericpressurebycoolingitto
approximately162C(260F).TheenergydensityofLNGis2.4timesthatofCNGor
60% of that of diesel fuel. This makes LNG attractive for use in marine applications
wherestoragespaceandendurancearecritical.
The natural gas for CNG and LNG can also be derived from renewable biogas and is
sometimescalledbiomethane.
LNGisoneofthemostpromisingalternativemarinefuels.Ittakesupabout1/600thof
thevolumeofnaturalgasinthegaseousstate.Hazardsincludeitsflammabilityandlow
freezing temperature (163C (260F), such that marine regulations require extra
safetyprecautionslikedoublewallpiping,gasdetectionssystems,etc.,inenginerooms.
27
NorwayalreadyhasanestablishedLNGinfrastructure(forshortseashipping).Inthefall
of2011,26LNGshipswerereportedinoperationinNorway(Ref.25),ofwhich15were
ferries.Another15LNGshipsareunderconstruction.InPoland,twodualfuelLNGships
arebeingbuiltfortheferrycompanyFjordline.
Itissometimessuggestedthatabouthalfthecommercialfleetofmarinevesselscould
be converted to LNG. However, these would not be the largest vessels, because the
range would probably not satisfy oceangoing ships. Thus, in terms of amount of
convertedfueluse,thepercentagewouldbemuchlowerthanhalfthefleet.Ithasbeen
estimated that there will be a consumption of 2.4 MT of LNG in 2020 (Ref. 26). This
projectedamountcorrespondstolessthan1%ofglobalshipping.
Foreconomicreasons,LNGconversionsgenerallyrequirethat3040%oftheoperation
is located within ECA areas. Otherwise, the capital investment will be too heavy
(Ref.19).
A major concern with LNG is the possibility for debunkering (or emptying the fuel
tanks).Thisstepisnecessarywhenashipistobeanchoredforanextendedperiodof
time.UnlessspecialLNGdebunkeringfacilitiesareavailableintheport,thegaswould
boil off, causing huge methane losses to the atmosphere. In case of grounding
accidents, a technique for debunkering would also be necessary. Another concern is
pressureincreasewhenconsumptionoccursbelowthenaturalboiloffrate,whichwill
happenifthereisnoreliquefactionplanavailableonboard.Reliquefactionofboiloff
gasrequiresabout0.8kWh/kggas.OnelargeLNGcarrier,suchasQatarQmax,requires
56MWofreliquefactionpower,correspondingtoaboiloffrateof8tons/hour.
Athirdconcerntobeaddressedismethaneslipfromlargermarineenginesburninggas.
Methane slip will be present, especially on fourstroke, dualfuel engines (Figure13),
partlyfromthescavengingprocessinthecylinderandpartlyfromtheventilationfrom
the crank case, which is being led to the atmosphere. In addition, there is some
uncertaintyastowhetherfutureregulationswillallowLNGtankstobesituateddirectly
below the outfitting/accommodation of the ship. If not, this constraint could cause
difficultiesinretrofittingcertainships.
LNG is chemically identical to biomethane. Biomethane is generally known to be the

mostCO2friendlyfuelofall(Ref.27).RecentactivitiesintheareabelongtotheHolland
InnovationTeamandAngloDutchBioLNG;see(Ref.28).
Biogasrequiresdualfueltechnologyforthemarineengineandextrastoragefacilities,
either as pressure tanks or cryogenic tanks for LBG. Biogas is usually produced from
inland biowaste and thus presents challenges in terms of costs to transport LBG to
marinevessels.
28
Port Gas Injectors

Diesel main injector
Diesel pilot injector
Figure13.WrtsilPortInjectionDualFuelConcept
forGasUseinLargeFourStrokeEngines
6.4
Exhaust Gas Treatment Systems (EGTSs)
AnalternativetousinglowsulfurfuelsforreducingtheSOxemittedintheexhaustisto
clean the exhaust gas using scrubber technology. This technology is proven for use at
shoreside power stations worldwide. These systems can clean the exhaust to the SOx
levelthatisequivalenttotherequiredfuelsulfurcontent.UsingaSOxscrubberoffers
shippers the flexibility of using either a lowsulfur fuel or highersulfur fuel. The
scrubbingefficienciesofSOxscrubberspresentedin(Ref.8)areasfollows:
PMtrappinggreaterthan80%
SOxremovalgreaterthan98%
SOxscrubbersareclassifiedaswetordry,asfollows:
Wetsystemuseswater(seawaterorfresh)asthescrubbingmedium
Drysystemusesadrychemical,suchascalciumhydroxide.
Wetsystemsarefurtherdividedintothefollowing:
Openloopsystemsthatuseseawater.
29
Closedloop systems that use freshwater with the addition of an alkaline

chemical.
Hybridsystemsthatcanoperateinbothopenloopandclosedloopmodes.
Foracomparisonofthesystems,seeSection6.8andTable3oftheLloydsRegister(LR)
publication,UnderstandingExhaustGasTreatmentSystems,GuidanceforShipowners
and Operators, from June of 2012 (Ref. 29). This publication also provides a detailed
discussion of SOx scrubbing and NOx abatement systems, as well as two case studies
performedontwoferries,thePrideofKentandtheFicariaSeaways.
Basedona2009planusingaSOxexhaustscrubberthatwasinstalledonaDetForenede
DampskibsSelskab(DFDS)passengercarferry,itwasestimatedthatthepaybackperiod
couldbeaslowastwoyears.Theplanistooperatethescrubberinthehighlyefficient
sodiumhydroxide(NaOH)modeincoastalwatersandinthesaltwatermodeintheopen
seawherealowersulfurscrubbingefficiencyissufficient(Ref.8).
OnlyafewshipsareoperatingwithSOxscrubbersorhaveorderedthem,andmanyof
these are on a trial basis. Royal Caribbean Cruise Lines has contracted with Wrtsil
HamworthyfortheinstallationoffourhybridscrubbersforitstwonewSunshineclass
vesselsafteranearlierpilotinstallationaboarditsLibertyoftheSeas.Thefirstvessel
isduetoreceivedeliveryinautumn2014,andthesecondinthespringof2015(Ref.30).
Exhaust gas SOx scrubbers by Green Tech Marine (GTM R15 Scrubber) were recently
installed by Norwegian Cruise Lines (NCL) in their Pride of America. The scrubbers
wereinstalledinMarch2013duringtheshipsdrydocking.Thesmallfootprintandlow
weight of the Green Tech system is compact, and thus no passenger or crew space is
lost,theinstallationneedsnosteelworkmodification,andthescrubbertakesupabout
thesameamountofspaceastheexhaustsilenceritreplaces.Thesystemcanoperatein
closedoropenmode(Ref.31).KoreasSTXOffshore&ShipbuildingawardedWrtsila
contracttosupplyexhaustgascleaningsystemsforfournewcontainerrollon,rolloff
(RO/RO, or ConRo) vessels being built for Italys Ignazio Messina & Co. The Wrtsil
systems to be supplied will clean both SOx and particulate matter emissions from the
main engines, auxiliary engines, and the boiler. Deliveries are scheduled to take place
during 2013 and 2014, and the vessels are to be delivered by the shipyard to Ignazio
Messina & Co during the second half of 2014 (Ref.32). Great Lakes Seaway shipping
line,AlgomaCentralMarine,isbuildingsixnew225mlongEquinoxclasslakersthat
willbe45%morefuelefficientthanexistinglakers.Theywillbeequippedwithcomplete
Wrtsil propulsion packages that come with fully integrated, freshwater scrubber
systems(Ref.33).
Exhaust gas treatment systems for NOx, (NOx reducing devices) will provide the
flexibility to operate ships built after January 1, 2016, in ECAs designated for NOx
emissioncontrol.
30
Tier III NOx limits will apply to all ships constructed on or after January 1, 2016, with
engines over 130kW that operate inside an ECANOx area. Unlike the sulfur limits in
Regulation14ofMARPOLAnnexVI,theTierIIINOxlimitswillnotretroactivelyapplyto
ships constructed before January1, 2016 (except in the case of additional or
nonidenticalreplacementenginesinstalledonorafterJanuary1,2016[Ref.29]).
For compliance with Tier II NOx emission limits, shippers can implement onengine
adjustmentsandmodificationsthatwillbeabletosatisfytheselimits.ForTierIIINOx
compliance,thecurrentthinkingisthateitherSCRorEGRtechnologieswillbenecessary
for meeting the Tier III limits. For a detailed discussion of NOx emission reduction
technologies, consult the Lloyds Register publication, Understanding Exhaust Gas
Treatment Systems, Guidance for Shipowners and Operators, from June of 2012 at
http://www.lr.org/eca(Ref.8).
Scrubbersystemsarepricedatabout$3millionUSD.ThepricedifferencebetweenHFO
380andLSFOisroughly$40USD/ton,whereasthepricepremiumofMGOcomparedto
HFO380isabout$330USD/ton.Thepaybackofscrubbersystemstypicallyreliesona
pricedifferenceof$200600USD/ton.ScrubbersystemcostsareshowninFigure14.
Cost of scrubber system

3
M
2
1
MEUR
0
0
10
15
20
25
MW
Figure14.CostsofScrubberSystems[CoupleSystems,
AlfaLaval](seeRef.34forcostcalculations)
Theproblemswithscrubbershavetodowiththelossofcargocapacityduetothelarge
physicalsizeofthesystems.Winteroperationcanalsobeachallenge(Ref.35).
SeeAppendixAforillustrationsandoperationaldetailsofsomeexhaustaftertreatment
systemsprovidedbyvariousvendors.
31
32
7.
Assessing Alternative Fuels for Marine Use
When assessing fuels, it is necessary to evaluate several parameters related to the

technical,economic,andenvironmentalimplicationsoftheuseofeachfuel.
Theconsiderationshavebeengroupedintofivemaincriteriawithsubcriteria.
Engineandfuelsystemcost,including
o Newvesseloncost
o Retrofitinvestments
o Increasedmaintenancecost
Projectedfuelcost,including
o Projectedfuelpricepermegajoule(MJ)
o Availabilityandcostofinfrastructure
o Longtermworldsupply
o Fuelconsumptionpenalty(e.g.,becauseoflesserefficiency,boiloff)
Emissionabatementcost,including
o PMportcompliance(e.g.,fuelchange)
o SOxSECA(e.g.,scrubber)
o NOxSECA(e.g.,SCR,EGR)
o CO2EEDI(e.g.,slowsteaming,heatrecovery)
Safetyrelatedcost,including
o Approvals(classification)
o Additionalinsurancecost
o Crewtrainingandeducation
Indirectcost,including
o Reducedrangebetweenbunkering
o Reducedcargocapacity
o Increasedwaitingtimeinports
The following paragraphs discuss the favorable attributes and drawbacks of the
alternativemarinefuelswithregardtotheirpracticalityandaffordabilityformarineuse.
7.1
Liquid Fossil Fuels (ULSD, LSRF) Advantages
7.1.1 FuelSystemandEngineCompatibility
These fuels are currently inuse in manymarine engine installations or can be usedin
currentmarineenginesbecauseoftheirsimilaritytothefuelsthatareinusetoday.The
lighter ULSD or lowsulfur diesel (LSD) is similar to distillate diesel fuel that is used in
medium and highspeed shipboard diesels and on ships burning residual fuel when
enteringafuelsulfurrestrictionzone.Forshipsnormallyburningresidualfuel,special
33
proceduresmustbeobservedwhentransitioningtothelowerviscositydistillatefuels.
The diesel engine manufacturers have developed a Smart Switch to facilitate this
operation, and there are publications and bulletins available for switching to and
operatingonlowsulfurfuels.
Thesefuelsarecompatiblewithcurrentshipboarddieselenginesandfuelsystems.For
ships that do not operate for a substantial amount of time in an ECA, the
owners/operators may choose to use lowersulfur fuels only when transiting an ECA.
Thisscenariorequirestheinstallationofadditionalfueltankswithassociatedpipingand
pumpsforthelowsulfurfuel.
7.1.2 LowerSOxEmissions
Thelowersulfurlevelsinthesefuelsensurethattheshipwillbeincompliancewiththe
lowersulfurlimitsrequiredintheECAsandbytheIMO.
7.1.3 Safety
Thefuelsaresafetousehavingsimilarcharacteristicstocurrentdistillateandresidual
dieselfuels.
7.1.4 Availability
They are commercially available for ship bunkering. Most of the ports that currently
offerhighsulfurfueloilsalsohaveavailablethelowsulfurfueloilofthesamegrade.
7.2
Liquid Fossil Fuels (ULSD, LSRF) Drawbacks
7.2.1 Price
The cleaner, lowersulfur distillate and residual fuels are more expensive than the
current fuels. The lowsulfur residual fuels have a higher price than the highsulfur
residualfuelsbecauseofthecostofthedesulfurizationprocessandincreasingdemand.
Theexistingpricedifference(basedonavailablepublicbunkerprices)betweendistillate
(0.10.5%sulfur)andresidualfuel(2.03.5%sulfur)isabout$300USDmorepertonfor
distillate.Basedonapreliminaryreportonlowsulfur(1%)marinefuels,thepremium
cost of the lowersulfur HFO could be as much as $100 USD/metric ton (Ref. 36). The
prices of marine fuels at two European ports in July 2012 are summarized in Table5
(Ref.37).
34
Table 5 shows that the lowersulfur fuels are more expensive than the heavy residual
fuels.Thedistillatefuels(lowsulfurMGO[LSMGO]andMDO)havepricepremiumswell
abovethoseoftheresidualfuels.
Table5.MarineFuelPricesinJuly2012inUSD/MetricTon(MT)byPort
Port
LowSulfur
LowSulfur
HighSulfur HeavyFuel HighSulfur HeavyFuel
HeavyFuel (LS380) HeavyFuel (LS180) LSMGO
(IF380)
(1%S)
(IF180)
(1%S)
(0.1%S) MDO
Copenhagen
$597.50
$658.50
$630.00
$683.50
$907.50 $865.50
Rotterdam
$580.00
$631.50
$602.00
$653.00
$865.00
7.2.2 Characteristics
The cleaner fuels, especially if distillate is used, have different characteristics, such as
lowerviscosity,thatcancausefuelsystemandengineoperationproblems.Theengines
canoperatesatisfactorilyonthelowerviscosityandlowersulfurfuelswhentheproper
changeover precautions are followed. When switching from a heavy fuel to distillate
fuel, there could be incompatibility problems that result in filter clogging; in addition,
theproperbasenumber(BN)lubeoilmustbemaintainedwhenoperatingonthehigh
orlowsulfurfuel,andtheviscositymustbemaintainedattheproperleveltoprevent
fuelpumpdamage.ThefuelsystemmodificationsnecessaryforoperationonbothHFO
andthelowsulfurdistillateaddcomplexitytothealreadycomplexfuelsystem.There
arealsomodificationsrequiredtothelubeoilsystemsothattheproperBNlubeoilis
used, depending on the fuels sulfur level, to avoid engine damage. MAN B&W has
publishedadetailedmanualtitledOperationonLowSulfurFuels(Ref.8)thatexplains
thestepsthatshouldbetakenfordesigningormodifyinganexistingHFOfueloilsystem
for operation on lowsulfur fuels. When California enacted the lowsulfur fuels
requirement for ships in California Coastal Waters (CCW), ships experienced problems
withenginestallingandlossofpropulsionwhenshiftingfromresidualtodistillatefuel.
7.2.3 FutureAvailability
Thereisaconcernthatwhenthe0.1%ECAfuelsulfurlimittakeseffectin2015,there
couldbeaEuropeanshortageofMGO.Europeiscurrentlyinanetshortageofmiddle
distillatesandhastoimportthem(Ref.38).Thus,therecouldbeasupplychallengein
2015.

35
7.3
Liquid Biofuels Characteristics
7.3.1 Biodiesel(FAME)Advantages
Fuel System and Engine Compatibility Many marine engine manufacturers

have certifiedtheir engines for operation on biodiesel ora blendof biodiesel
anddieselfuel.Theoriginalenginemanufacturershouldbeconsultedforthe
amount of biodiesel their engines can burn (i.e.,B20, etc.). B20 represents a
fuel of 80% diesel fuel and 20% biodiesel. Likewise, B100 represents a fuel
totallymadeuptotallywithbiodiesel.
Lower SOx Emissions Neat biodiesel contains almost no sulfur, so SOx

exhaustemissionsarepracticallyzero.Blendingwithregulardiesellowersthe
sulfurcontentproportionally.
SafetyBiodieselisassafeasdieselfuel.Ithasahigherflashpointthandiesel,
is biodegradable, and degrades quickly in water. The flash point of B100 is
approximately300F(149C),comparedto120170F(4977C)forpetroleum
diesel.
AvailabilityBiodieseliscommerciallyavailableatpricescomparabletothose
ofmarinedieselfuel.Forqualitycontrol,itisproducedtospecificationssetby
theAmericanSocietyforTestingandMaterials(ASTM)andtheEuropeanUnion
(EU).Ithasbeenclassifiedasanadvancedbiofuel.
7.3.2 Biodiesel(FAME)Drawbacks
LowTemperatureOperationBiodieselhasahighcloudpointcomparedwith
petroleum diesel that can result in filter clogging and poor fuel flow at low
temperatures(i.e.,32Fandlower).Thefeedstockusedforthemanufactureof
the biodiesel has a strong influence on the cloud point.Additives canalso be
usedtolowerthecloudpoint.
Fuel System and Engine Compatibility Biodiesel, especially in higher

concentrations,candissolvecertainnonmetallicmaterialssuchasseals,rubber
hoses,andgaskets.Itcanalsointeractwithcertainmetallicmaterials,suchas
copperandbrass.Foranexistingship,thefuelsystemandenginesmayhaveto
be modified by changing out susceptible parts with biodieselcompatible
componentsforsatisfactoryoperation.
Cleaning Effect Biodiesel especially in higher concentrations has a

solvent/scrubbing action that cleans/removes deposits from the fuel system,
36
resultingincloggedfuelfilters.Thefuelsystemshouldbethoroughlycleaned,
removingalldepositsandresidualmoisturebeforeusingbiodieselortherewill
beinordinatehighuseoffuelfilters.
LongTerm Storage Stability Biodiesel can degrade over time, forming

contaminantsofperoxides,acids,andotherinsolubles.Ifbiodieselisstoredfor
morethantwomonths,thefuelshouldbecloselymonitoredandtestedtosee
thatitremainswithinspecification.Anantioxidantcanalsobeused(Ref.39).
7.3.3 AlgaeFuelsAdvantages
Potential Algae can grow at amazing rates compared to farmland crops.

These growth rates potentially translate to a very high biomass yield per
hectare.However,muchresearchisstillneededtofullyutilizethepotentialof
algaefuel.
FuelSystemandEngineCompatibilityWhenhydrotreated,itisadropinfuel
intermsofcompatibilitywiththefuelsystemandenginecomponents.Testing
to date by the U.S.Navy has shown no adverse effects from using a
50/50blendofalgaefuelandpetroleumdieselfuelonengineandfuelsystem
components.
LowerSOxEmissionsAlgaefuelcontainsalmostnosulfur,sotheSOxexhaust
emissions are practically zero. Blending with regular diesel lowers the sulfur
contentproportionally.
SafetyAlgaefuelisassafeasdieselfuel.
Performance Algae fuels have slightly lower heating values than those of
petroleumdieselandloweraromatics.Blendingwithpetroleumdieselnegates
these drawbacks so the blended fuels performance compares favorably with
petroleum diesel. Algae fuel is produced to a hydrotreated renewable diesel
(HRD)76 specification and, when blended with 50% petroleum diesel, meets
therequirementsforpetroleumdieselF76.Table6showsthecomparisonof
the 50/50 blend with the petroleum F76 fuel and the F76 specification
(Ref.40).
37
Table6.Comparisonof50/50BlendofAlgaeandF76PetroleumFuel
withPetroleumF76
Characteristic
AcidNumber
(mgKOH/g)
Appearance
Ash(wt%)
CarbonResidue
(10%bottoms)(wt%)
CloudPoint(C)
Color
Corrosion@100C
Demulsification@25C
(minutes)
Density@15C(kg/m3)
Distillation(C)IBP
10%Point
50%Point
90%Point
EndPoint
Residue+Loss(vol%)
FlashPoint(C)
CetaneNumber
HydrogenContent
(wt%)
Particulate
Contamination(mg/L)
PourPoint(C)
StorageStab.(16)hrs
Sulfur(wt%)
TraceMetals:Ca(ppm)
TraceMetals:Pb(ppm)
TraceMetals:Na+K
(ppm)
TraceMetals:V(ppm)
Viscosity@40C
MILDTL16884L
Requirements
PetroleumF76
(Typical)
50/50Blend
(Actual)
0.30(max)
Clear&Bright(C&B)
0.005(max)
0.08
C&B
<0.001
<0.05
C&B
<0.001
0.20(max)
1(max)
3(max)
1(max)
0.07
5
1
1a
0.09
11
<2.5
1a
10(max)
800876
Record
Record
Record
357(max)
385(max)
3.0(max)
60(min)
42(min)
3
845
180
218
282
338
364
2.0
65
51
2
806
189
205
263
300
330
1.8
65
59
12.5(min)
13.3
14.0
10(max)
6(max)
3.0mg/100ml(max)
0.5(max)
1.0(max)
0.5(max)
2
11
0.7
0.3
<0.1
<0.1
2
18
<0.1
0.06
<0.1
<0.1
1.0(max)
0.5(max)
1.74.3
<0.1
<0.1
3.3
<0.1
<0.1
2.3
38
7.3.4 AlgaeFuelDrawbacks
Availability Commercial availability is limited. The U.S. Navy is the primary

useranddeveloperofthefuelformarineuse.TheNavysplansaretoreduce
petroleumfueluseasmuchaspossibleintheirfleet.Ademonstrationofthe
Green Strike Force took place in 2012 using a 5050 algae/petroleum fuel
blend,andthereareplanstobesailingthegreenfleetby2016.
Cost The current cost is prohibitive for general commercial use other than
experimentallyorforperformancebaseddemonstrations.
Performance The neat algae fuel has lower heating value and aromatics
thanthatofpetroleumdiesel;whenblendedwithregulardieselfuel,however,
thesedrawbacksarenegated.
7.3.5 HydrogenationDerivedRenewableDiesel(HDRD)Advantages
FuelSystemandEngineCompatibilityHDRDisproducedbyrefiningfatsor
vegetable oils in a process known as fatty acidstohydrocarbon
hydrotreatment.Dieselproducedusingthisprocessiscalledrenewablediesel
todifferentiateitfrombiodiesel,whichisaproductofthetransesterficationof
animal fats and vegetable oils. Renewable diesel and biodiesel use similar
feedstocks but have different processing methods that create chemically
differentproducts.
HDRDhasanidenticalchemicalstructurewithpetroleumbaseddieselasitis
freeofestercompoundsand,whenproducedfromanimalfatwastes,haslow
carbon intensity and is referred to as advanced renewable diesel. It has a
lower production cost because it uses existing hydrotreatment process
equipment in a petroleum refinery. It has better lowtemperature operability
than biodiesel; thus, it can be used in colder climates without gelling or
cloggingfuelfilters.
HDRD is similar to petroleum diesel fuel and is compatible with new and
existingdieselenginesandfuelsystems.Itisproducedtomeetcurrentdiesel
fuelspecificationASTMD975.
LowerSOxEmissionsHDRDfuelcontainsalmostnosulfursotheSOxexhaust
emissions are practically zero. Blending with regular diesel lowers the sulfur
contentproportionally.
SafetyHDRDfuelmeetsthedieselfuelspecificationandisassafeasdiesel
fuel.
39
7.3.6 HDRDDrawbacks
Availability Current availability is limited. There are only a few companies

thathaveinvestedtoproducehydrogenationderivedrenewablediesel.
ConocoPhillips produces renewable diesel from vegetable oil and crude oil.
Nestes plant in Porvoo, Finland, processes vegetable and animal fats into
renewable diesel. Neste also has plants in Singapore and Rotterdam for the
productionofHDRD.BrazilianPetrobrasusescoprocessingofvegetableoilsto
makeHDRD.
Cetane Energy LLC in Carlsbad, New Mexico, produces renewable diesel from
vegetableoilsandwastes.Accordingtothecompany,itstechnologycanwork
withawiderangeoffeedstocks,includinganimalfatandalgaloils.UKbased
RenewableDieselEuropeistheexclusiveagentinEuropeforthestandalone
renewabledieseltechnologydevelopedbyCetaneEnergy.
Othercompaniesthathaveplanstoproduceorareproducingrenewablediesel
fuel through hydrogenation include Nippon Oil in Japan, BP in Australia,
SyntroleumandTysonFoodsintheUnitedStates(DynamicFuels),andUOPEni
inItalyandtheUnitedStates(Ref.41).
7.4
Gaseous Fuels: Natural Gas (Compressed [CNG] or

Liquefied [LNG])
NaturalgasstoredasLNGisaviablefuturemarinefuelmainlyforshortseashipping.
StoredinitscompressedformasCNG,however,itisnotconsideredviableforuseon
longer routes because of its long fueling times, extra space requirements for the fuel
tanks,andthelimitedvolumesthatcanbecarriedthatresultinalimitedrange.Thus,
otherthanforvesselsonshortvoyagesthathavesufficientturnaroundtimeforfueling,
the CNG concept is not considered the best option when using natural gas as a ships
propulsionfuel.
7.4.1 NaturalGasAdvantages
Availability With the new methods for extracting natural gas from shale
formations using the fracking method, the rate of development of new gas
fieldsshouldassureanabundantsupplyforyears.Inthepastcoupleofyears,
the growing global surplus of natural gas has become increasingly apparent.
WhilemuchofthefocusintheUnitedStateshasbeenontherecoveryofshale
gas,thediscoveryofenormousgasreservesoverseasinareaslikeoffshoreEast
AfricaandtheCaspianSeahasmadeitobviousthatfearsaboutscarcitywere
40
not well founded (Ref. 42). Availability is good in most parts of the world to
whichshipssailfrequently.
Cost Natural gas is expected to be cost competitive with residual and

distillatefuelsthrough2035.Currently,itis70%lessthanresidualfueland85%
less than distillate fuel; furthermore, the Energy Information Administration
expectsittoholdthispriceadvantagethrough2035(Ref.43).Figure15shows
thispriceadvantagethatnaturalgasisprojectedtomaintainoverresidualand
distillatefuelsthrough2035.
Figure15.ProjectedPricesofMarineFuels(Ref.43)
Lower Exhaust Emissions The use of natural gas results in the following
reductionsofSOx,NOx,PM,andCO2fromengineexhaustemissions(Ref.44):
o Carbonemissionsbyapproximately25%
o SOxbyalmost100%
o NOxby85%
o PMby95%
ItshouldbenotedthatwhileemissionsofCO2,SOx,NOxandPMarereduced
significantly through the use of natural gas as a fuel, there is a concern over
41
methaneslip.MethaneslipwillbeincludedintheGHGpicture,andthereby
lead to high penalty on future CO2 taxation, etc. Methane slip will always be
presentwiththeknowndualfueltechnologies(e.g.,Ottocycle).
ShipConstructionRulesRulesforthesafeconstructionofshipsusingnatural
gasbasednaturalfuelhavebeendevelopedandpublishedbytheclassification
societies. There are rules, for example, by Det Norske Veritas (DNV), Lloyds
Register(LR),andothers.
AvailabilityofMarineGasEnginesGasburningordualfuelmarineengines
in both slow and mediumspeed configurations are available from engine
manufacturessuchasWrtsil,MANB&W,andRollsRoyce(BergenEngines).
Wrtsildevelopedaslowspeed,dualfuelenginein1973formarineuseand
followed with a highpressure, twostroke gas engine for marine use in 1986.
Currently,Wrtsiloffersaseriesofdualfuel,mediumspeedmarineengines.
MAN B&W offers a slowspeed marine gas engine, and Rolls Royce has a
mediumspeed marine gas engine that meets the Tier III NOx limits that will
becomeeffectivein2016.MitsubishiHeavyIndustries,Ltd.,plansacombustion
engine that efficiently burns highpressure gas through direct injection. The
enginewillbemarketedtocustomersafteremissionslevelsandfueleconomy
aretestedthroughatrialrunthatstartsinlate2013atMitsubishiHeavysKobe
shipyard. It is intended for LNG carriers, large tankers, and containerships
(Ref.45).
ExperiencewithNaturalGasasMarineFuelAhistoryspanningmanyyears
of experienceexists duringwhich ships have safely operated with LNG as the
primaryfuel.Section8.2describestheoperationofshipswithnaturalgasasa
fuel.
7.4.2 NaturalGasDrawbacks
Not Compatible with Existing Engines and Fuel Systems Natural gas is not
compatible with existing liquid fuel systems and requires the modification of
existing engines and changes or additions to the existing shipboard fuel
systems, as well as otherchanges for safety reasons. Table7 is from a report
prepared by M.J. Bradley for the American Clean Skies Foundation (ACSF)
(Ref.46) and shows the costs associated with converting three vessels of
differentsizestoaccommodatenaturalgasservice.
42
Table7.CostsAssociatedwithConvertingMarineVesselstoLNGOperation
TOTAL
Size
Engine
FuelSystem CONVERSION
Type
(tons)
Engines
Cost
Cost
COST
Tug
150 21,500HP $1.2million
$6.0 million
$7.2million
Ferry
1,000 23,000HP $1.8million
$9.0million
$10.8million
GreatLakes 19,000 25,000HP $4.0million
$20million
$24million
BulkCarrier
In comparison, the conversion of the Bit Viking, a 177meterlong chemical

producttanker,torunonLNGwasestimatedtocostabout$10millionUSD.Up
to75%oftheconversioncostwascoveredbytheNorwegianNOxfund,which
awarded$7millionUSDtowardtheproject(Ref.47).
NewShipConstructionPremiumThecostofbuildinganewshippoweredby
natural gas has a premium over the construction cost of a conventional ship
withfossilfuel.Thereisacostincreaseforthegasenginesandanotherforthe
gaseousfuel system andassociated LNG storage tanks.A Germanischer Lloyd
(GL)studyin2009notedanadditionalinvestmentof25%overthatofthecost
for constructing a typical new container ship (Ref.48). According to a DNV
report,ifashipspendsmorethan30%ofitsoperatingtimeinanECA,thecost
ofgasfueledenginescanbejustified(Ref.43).
Increased Fuel Storage Space Increased fuel storage space is required to

carrythenecessaryvolumeofgasforendurancesimilartoashipusingliquid
fossilfuel.AgivenweightofnaturalgasstoredasLNGtakesuponlyabout40%
of the volume of the same weight of natural gas stored as CNG at 3,600psi.
Because LNG occupies much less space than CNG, it is the preferred storage
method.WhenstoredasLNG,however,thefueltakesuptwiceasmuchspace
asliquidfossilfuel,andifstoredasCNG,ittakesuptofivetimesasmuchspace
(Ref.46).Table8showsthevolumeoftheonboardfuelstoragerequirements
forthreetypesofmarinevessels.
43
Table8.FuelUsageandStorageVolumesforThreeTypesofVessels
TypicalMinimum
OnboardFuel
Storage
Fuel
DailyFuel
Vessel
Type
HP
Use(gal)
Towing
Distillate 3,000
1,417
Tug
100car
Distillate 6,000
2,268
Ferry
Great
Residual 10,000
6,934
LakesOre
Carrier
[days]
14
VolumeofOnboard
FuelStorage
Dist.or
Residual
LNG
CNG
[gal]
[ft3]
[ft3]
[ft3]
20,000 2,674
4,830 12,178
16,000
2,139
21
145,000
19,385
3,864
9,742
38,183 96,264
Figure 16 from Reference 46 shows the relative weights and volumes of the
marinefuels.
Figure16.WeightsandVolumesofMarineFuels
IncreasedFuelingTimeStoredasCNG,itisnotconsideredviablebecauseof
longfuelingtimes,extraspacerequirementsforthefueltanks,andthelimited
volume that can be carried that results in a limited range. So, other than for
vessels on short voyages that have sufficient turnaround time for fueling, the
CNG concept is not considered the best option when using natural gas for a
shipspropulsionfuel.
Increased Safety Requirements Thecarriage of natural gas as a fuelentails

additional safety requirements over fossil fuels and results in construction
features that are reflected in the higher construction cost. (See New Ship
ConstructionPremiumonpage33fortheincreasedcosts.)
44
Limited Bunkering Infrastructure For LNG to become an attractive fuel for

the majority of ships, a global network of LNG bunkering terminals must be
establishedorLNGfueledshipswillbelimitedtocoastaltradeswhereanLNG
bunkering network already exists. The situation is sometimes described as a
chickenandeggdilemma.Untilthebunkeringinfrastructureisinplace,ship
ownersmaynotcommittonaturalgasfueledshipsandvisaversa.Currently,
LNG bunkering is more expensive andcomplicatedas compared to what is in
placeforfossilfuelandisonlyavailableinalimitednumberofplaces.
AGLarticlecalledLNGSupplyChain(Ref.49)madethefollowingobservation:
o Attheendof2011,nosupplychainforLNGasshipfuelexists,withthe
exception of that serving Norwegian coastal waters. The primary reason
forthisisthatLNGsuppliershaveyettobeconvincedthatthistechnology
willtakeoff.Moreover,LNGusershavetobeconvincedthatLNGwillbe
madeavailableatattractivepricelevelsandtherightlocations.
o In principle, Europe is well prepared for this future as local LNG

production is up and running in Norway. A number of large LNG import
terminals already exist, with some of these having or planning an export
facility,whichisanecessarysteptowardssmallscaleLNGdistribution.At
present,however,largeLNGterminalsarenotyetequippedforexporting
smallerquantitiesofLNG.
Since these statements were issued, studies have been undertaken to equip
LNGbunkeringfacilitieswithintheEuropeanECAstohaveLNGsupplycapacity
by2015;andprojectshavebeenstartedtoprovideLNGbunkeringcapabilities
at some ports. Major 0il and gas producers are showing an interest in
developing an LNG marine fuel supply infrastructure. Shell has acquired
Norwegian LNG producerand distributor Gasnor for$74million with plans to
target European marine customers. The purchase of Gasnor will give the oil
majorafootholdintheemergentmarketforLNGbunkering.Gasnorsupplies
LNG to Norway primarily by truck and is in the process of establishing LNG
quayside bunkering at the German Port of Brunsbuttel (Ref.50). A plan has
been developed and land set aside for an LNG bunkering port in Rotterdam.
AlthoughalargeGasAccesstoEurope(GATE)LNGimportterminalopenedat
theendoflastyear,thisLNGisdestinedmostlyforpowerplants.Theprincipal
companies involved want to build a smaller outbound terminal next to the
GATE so the LNG can be supplied as fuel for ships (Ref. 51). The Port of
Rotterdam and the Port of Gothenburg plan to have infrastructure for LNG
bunkering available once the lower marine fuel sulfur regulations come into
effectin2015(Ref.52).
A1,305,000LNGbunkeringprojectbeingcarriedoutbyAGAABinthePortof
Stockholm, Sweden, is to proceed with the help of a 261,000 contribution
45
fromtheEuropeanUnionsTENTprogram.Thelatteramountistobeusedfor
the conversion of anexisting ferry byAGAAB to an LNGbunkering vessel for
shiptoshipbunkering.
AGA, which is supplying the fuel for the LNGfueled ferry Viking Grace,
convertedanexistingvessel,theFjalir,intoapurposebuiltLNGbunkeringship
thatwasrenamedtheSeagasataceremonyonMarch20,2013,andwillbe
stationedatLouddeninStockholm.Itwillprovide6070tonnesofLNGfuelon
a daily basis to the Viking Grace, and later to other ships in the Port of
Stockholm.ThetimeittakestofueltheVikingGracewillbeloweredtojust
under one hour and will be performed from ship to ship (the Viking Grace is
now fueled from shoreside). Figure 17 shows Seagas alongside the Viking
Grace.
Figure17.LNGBunkeringShipSeagasalongsidetheVikingGrace
Thebunkeringvesselwillbetestedwith1,000tonnesofLNG,correspondingto
areductionof300tonnesofCO2and10tonnesofSO2intermsofequivalent
emissionsfromtraditionalshippingfuels.Thetestresultswillbemeasuredin
close collaboration with the Swedish Transport Agency and the Stockholm
County Administrative Board, the main authority in charge of environmental
permits.
46
Theresultswillenableevaluationofthepotentialofsuchabunkeringvessel,as
wellasthedefiningoftheneedforfuturepermitswithregardtoanincreasing
useofLNGasafuelintheshippingindustry.
The project will be managed by the TransEuropean Transport Network

ExecutiveAgencyandissettobecompletedbyDecember2013(Ref.53).
Also anticipating a European LNG marine fuel infrastructure is a 50/50 joint

venture(JV)betweenLindeGroupandbunkersupplierBomin.LindeGrouphas
thecontracttosupplytheLNGforthenaturalgasfueledferry,VikingGrace,
andhaspartneredwithBomintobuildaEuropeaninfrastructureforthesupply
ofLNGfuelforships.TheJVwillstartitsoperationsinthelatterpartof2012
with headquarters in Hamburg. Linde will contribute its experience in
cryogenics and its engineering knowhow whereas Bomin will support the JV
withitstrackrecordinmaritimebunkerfueltradingandoperations.Thenew
company will establish operations in a number of key ports throughout the
ECAsinnorthwestEurope.By2015,approximately70vesselsareexpectedto
beoperatingonLNGintheNordicregion,accordingtoastudybytheDanish
MaritimeAuthority(Ref.54).
Other ports are looking at the development of LNG bunkering facilities.

WrtsilisworkingwithShelltodeveloptheinfrastructureforhandlinggasfor
marinebunkering.IntheUnitedStates,WrtsilhasadealwithShelltosupply
thebunkeringforgasfueledshipsontheU.S.sideoftheGulfofMexico,such
asthedualfueledoffshoresupplyvessels(OSVs)byHarveyGulfInternational
Marine(Ref.55).
In Asia, Singapore has set up a joint industry project (JIP) to provide

recommendationstotheSingaporegovernmentonenablingLNGbunkeringin
Singapore. The JIP will cover operational safety, alignment with industry
expectations and best practices, and compliance with environmental and
economicbenefitstotheshipownersandthepublic(Ref.56).
LloydsRegisterpublishedacomprehensive56pagestudyinAugust2012titled
LNGfuelleddeepseashippingTheoutlookforLNGbunkerandLNGfuelled
newbuild demandup to2025(Ref. 57). The study wasstarted in April 2011.
TheobjectwastounderstandhowaglobalLNGbunkeringinfrastructuremight
developandtoassessthelikelihoodthatLNGwillbecomewidelyadoptedasa
fuelfordeepseashipping.Inthisstudy,LR:
o Identifiedstrategicportsandlocationsaroundtheworldforpossiblesiting
ofLNGbunkeringinfrastructurefacilities,andalsosolicitedtheopinionsof
bunkeringportsontheirlikelyprovisionoffutureLNGbunkeringfacilities.
47
AssessedthelikelyscaleofdemandforLNGfuelednewconstructionand
LNG as a fuel for deep sea shipping up to 2025, using a proprietary
interactivedemandmodel.
The results of the demand model, which is based on three possible future
scenariosforLNGpricingandimplementationofglobalsulfurlimits,showthat
competitivepricingofLNGcouldhelppromotewideadoptionofthisfuelsuse
fordeepseashipping.
The model showed there is a fine balance of factors, such as fuel price
differentials and the timing of global sulfur limit enforcement, that will
influencethemarineindustrysdecisionsaboutfutureuseofthesefuels.
From a survey of shipowners on deep sea trades and bunkering ports, the
researchers made the following findings regarding deep sea trade and
bunkeringports.
Regardingdeepseatrade:
o LowsulfurfueloilisashorttermoptionforcompliancewithSOxemission
regulations.
o Abatementtechnologiesareamediumtermoption.
o LNGfuelled engines are a viable option in the medium and long term,
particularlyforshipsonlinertrades.
Regardingbunkeringports:
o LNGbunkeringisexpectedforshortseashippinginECAs.
o LNG bunkering may eventually cascade into deep sea trade facilitated by
regulations.
o LNG bunker demand is highly dependent on LNG pricing and its

comparable price difference with competing fuels, for example, HFO and
marinegasoil(MGO).
48
UsingtheLNGbunkerdemandmodel,threescenarioswereexaminedbasedon
thefollowingassumptions:
o WiderimplementationofECAs.
o Theimplementationdateofstrictglobalsulfurfuellimits.
o ThepropensityofshipownerstoadoptLNGasafuelfornewbuilds.
o ThereliabilityofforecastsofbunkerfueloilandLNGbunkerprices.
ThedetailsofthethreeforecastscenariosforLNGfuelednewbuildsandLNG
bunkerdemandandtheresultsofthedemandmodelarelistedbelow.
A Base Case scenario assumes current number of ECAs and a 0.5% global
bunkerfuelsulfurlimitimplementedfrom2020,whichshowedthat:
o Atotalof653LNGfuelednewbuildswereforecastedfortheperiodupto
2025(4.2%ofglobaldeliveriesfrom2012to2025).
o Cumulative LNG bunker demand is expected to reach 24 million tonnes

(MnT) by 2025 for deep sea trades (amounting to 1.5% of global LNG
productionand3.2%ofglobalHFObunkerconsumption).
AHighCasescenarioassumesa25%decreaseontheforecastedLNGbunker
pricesusedintheBaseCasemodelanda25%increaseinpropensitycompared
toaBaseCasescenariofornewbuildstoconverttoLNGfueleddesignsfrom
20202025.Specificfindingsincludethefollowing:
o Atotalof1,963LNGfuelednewbuildsareforecastedfortheperiodupto
2025(or12.6%ofglobaldeliveriesfrom2012to2025).
o CumulativeLNGbunkerdemandisexpectedtoreach66MnTby2025for
deepseatrades(amountingto4.2%ofglobalLNGproductionand8.0%of
globalHFObunkerconsumption).
ALowCasescenarioassumesa25%increaseinforecastedLNGbunkerprices
usedintheBaseCasemodelandimplementationofglobalsulfurlimitsshifting
to 2023.Sensitivity testing indicatedthatshifting implementation to2025 for
theLowCasewouldgeneratezerodemandforLNGfuelednewbuilds:
o A total of 13 LNGfueled newbuilds forecasted for the period up to 2025

(or0.1%ofglobaldeliveriesfrom2012to2025).
o CumulativeLNGbunkerdemandisexpectedtoreach0.7MnTby2025for
deep sea trades (amounting to 0.001% of global LNG production and
0.002%ofglobalHFObunkerconsumption).
49
Lloyds Register also noted that operating on lowsulfur distillate fuels is a

relatively easy way to comply with fuel oil sulfur limits but the study authors
expressedconcernthatiftheworldfleetofcommercialshipsconvertstousing
distillate fuel by 2020, the current production of distillate fuel oil would not
meetmarinebunkerfueldemand.
Accordingtoa2011report,OutlookforMarineBunkersandFuelOilto2030,1
therefineryindustrywouldneedtoproduceanadditional4millionbarrelsper
dayofdistillatesinordertomeetdemandforbunkerfueloilsforshippingon
implementationofthe2020IMOglobalsulfurlimits.
Lloyds Register observed in their port survey (Ref. 57) that where an LNG
import terminal exists, or is being developed nearby, most ports see the
importing terminal as a key driver of providing LNG in small parcels for
bunkeringoperations.
Lloyds Register concludes that LNG as a fuel is one option that deep sea
shippingoperatorshaveforcomplyingwithfutureemissionsregulations.
Usingsurveysofshipownersondeepseatradesandbunkeringportsandthe
modeling of LNG fueled newbuild and bunker demand, they arrived at the
followingconclusions:
1. LNGfuelledenginesareaviableoptionfordeepseatradesinthemedium
term(510years)andlongterm(10+years),particularlyforshipsonliner
trades. This conclusion can be drawn from both the shipowner survey as
wellasthebunkeringportsurvey.
2. Considering the Base Case scenario model, with what we know today
about the factors affecting adoption of LNG, 653 newbuilds are expected
to adopt LNGfueled engines by 2025 on deep sea routes. This amount
represents 4.2% of global newbuilds forecasted for delivery during the
period20122025.
3. The model output for the High Case scenario was much more favorable
towardLNGfuelednewbuildswhentheforecastpriceofLNGbunkerfuel
wasreducedby25%.Ontheotherhand,theLowCasescenariomodel
withahigherforecastpriceofLNGbunkerfuelandalaterimplementation
date of global sulfur limits generated demand for just 13 LNGfueled
newbuildsfordeepseashippingupto2025.
Meech,R.,2011.OutlookforMarineBunkersandFuelOilto2030,preparedthroughthe
partnershipofFGE(FactsGlobalEnergy)andRobinMeechofMarineEnergy&ConsultingLtd.
50
4. LNG bunker demand is highly dependent on LNG pricing and its

comparablepricedifferencewithcompetingfuels(e.g.,currentandfuture
alternative fuels). This conclusion can be drawn from the bunkering port
surveyandisconfirmedfromoutputsoftheLNGdemandmodelforLNG
fuelednewbuildsandLNGbunkeringintheLowCasescenario.
Lloyds Register will continue monitoring global commercial developments of

LNGasafuel,andwillprovideannualupdatesoftheforecastsofLNGfueled
newbuilds and LNG bunker demand. In addition, LR will carry out ongoing
validation and sensitivity studies for the model, updating it annually and
involving industry stakeholders including gas suppliers, engine makers,
shipowners,andshipyards(Ref.57).
A comprehensive North European LNG infrastructure study was released in

March of 2012 in Denmark (Ref. 26). Infrastructure owners and operators in
Belgium,Denmark,Finland,Norway,andSwedenparticipatedinthestudy.
The infrastructure for use by LNG for ships in Denmark was investigated by
Litehauz (Ref.58) in 2010. This region is dominated by short sea shipping
aroundtheBalticSea.
The general conclusion of this study is that if the investments in ports and
vessels are limited to the most fuelconsuming ports and vessels, fuel cost
savings will cover the investments. This finding does not include oceangoing
ships,onlyshipsthatportregularlyinportswithintheECAarea.
The key barriers for introduction of LNG identified in the Denmark study are
summarizedinTable9.
Barriers to the introduction of LNG do not appear to be technical but are

instead associated with supply chain issues and obvious economic issues.
Several manufacturers have addressed the technical barriers regarding
engines/turbines, and most of the prominent remaining issues appear to be
associated with the filling stations and the amount of onboard storage
required.
51
Table9.BarrierstoIntroductionofLNGandPossibleActions
Barriers
Technical
Themoredemandingfootprint
onboardthevesseltakesup
commercialspace.
PossibleActions
Pursuenewdesignandtechnical
developmentoftanksand
reconsiderationofsafety
measures.
Supply
Forshortseashipping,thefilling
stationsinkeyportsarelacking.
Providefundsforpilotprojects,
technologydevelopments,etc.
Developoptionsformobiletanks
tobetruckedonboardand
installed.
Fillingstation/bunkering
Regulation
Safetyregulationsforshiptoship
transferarelacking.
Safetyregulationsforbunkering
whilepassengersareonboardare
lacking.
Supporteffortstodeveloprevised
rules.
Developsafetymeasure(s)toallow
bunkeringwhilepassengersareon
board.
Politicaladministrative
Thereisnorewardfornaturalgas
conversioninpublictenders.
Concessionperiodsaretooshortfor
capitalinvestments.
Buildincriteriaintendersto
incentiviseinvestments.
Prolongconcessionperiods,where
possible.
Tosummarize,thefollowingarethekeyfindingsrelatedtotheuseofLNGfor
shipsinDenmark:
o Propulsiontechnologyinshipsismatureandproven.
o Thedistributionnetworkisnotyetdevelopedforuseinships.
o Addressingsafetyconcernspresentchallengesbutaremanageable.
o LNGcanentertheexistingbunkeringvaluechain.
An immediate focus on the ferry sector in Denmark will reap benefits in a

relativelyshorttime.Fortheshortseashippingsector,onewaytopromotethe
conversion to LNG is to support the development of storage and bunkering
facilities in main ports. Given the general expectations in the shipping
52
community, LNG will presumably be the de facto choice at least for the next
510years,andthedemandforfacilitiesandbunkerswillbeforLNG.
ItshouldbenotedthatLNGterminalsinFigure18aremostlyrelativelysmall
unitsthatcannotsupplyanoceangoingcontainerorsimilarvesselbutmainly
servesmallsupplyboatsandferries.LNGbunkeringvesselswillbeneededfor
oceangoingvesselsthatarerestrictedbydraftorsize.
Figure18.ExistingandPlannedProductionPlantsandLNGTerminals
intheSECA(Ref.26)
In other LNG bunkering news, Shell Oil is moving to bring LNG fuel one step
closer to being available for its marine and heavyduty, onroad customers in
North America by taking a final investment decision on two smallscale
liquefaction units. These two units will form the basis of two new LNG
transportcorridorsintheGreatLakesandGulfCoastregions.
53
In the Gulf Coast corridor, Shell plans to install a smallscale liquefaction unit
(0.25milliontonsperannum)atitsShellGeismarChemicalsfacilityinGeismar,
Louisiana. Once operational, this unit will supply LNG along the Mississippi
River,theIntraCoastalWaterway,andtotheoffshoreGulfofMexicoandthe
onshoreoilandgasexplorationareasofTexasandLouisiana.
To service oil and gas and other industrial customers in Texas and Louisiana,
Shell is expanding its existing relationship with fuels and lubricants reseller
Martin Energy Services, whose publicly traded affiliate, Martin Midstream
PartnersL.P.,willprovideterminals,storage,transportation,anddistributionof
LNG.
ShellhasamemorandumofunderstandingwithEdisonChouestOffshore(ECO)
companies to supply LNG fuel to marine vessels that operate in the Gulf of
Mexico and to provide what is anticipated to be the first LNG barging and
bunkering operation in North America at Port Fourchon, Louisiana. LNG
transport barges will move the fuel from the Geismar production site to Port
Fourchon,whereitwillbebunkeredintocustomervessels.
IntheGreatLakescorridor,Shellplanstoinstallasmallscaleliquefactionunit
(0.25milliontonsperannum)atitsShellSarniaManufacturingCentreinSarnia,
Ontario,Canada.Onceoperational,thisprojectwillsupplyLNGfueltoallfive
Great Lakes, their bordering U.S. states and Canadian provinces, and the
St.LawrenceSeaway.TheInterlakeSteamshipCompanyisexpectedtobethe
firstmarinecustomerinthisregion,asitbeginstheconversionofitsvessels.
Pending final regulatory permitting, these two new liquefaction units are
expectedtobeginoperationsandproductioninaboutthreeyears(Ref.59).
Using smallscale liquefaction technology, Waller Marine plans to install

nominal 500,000gallonperday LNG trains in phases as the market and
demand for marine LNG fuels expands. The first trains are planned for the
WallerPointLNGterminalinCameronParish,Louisiana,andadditionaltrains
are planned for a second terminal that it is developing through its subsidiary
WallerEnergyPartners,LLC,atasitethatwasintendedtobesecuredonthe
MississippiRiverinthefirstquarterof2013.
To enable the supply and distribution of LNG to and from small scale LNG
terminals and for bunkering LNG as a marine fuel, Waller has also conceived
and designed a series of small LNG vessels ranging from its 2,000 to
10,000m3capacity river transport and bunker barges and its 10,000 to
30,000m3 coastwise ATB LNG vessels. Figure 19 shows Waller Marines
30,000m3 ATB LNG RV bunker barge. Waller has received an approval in
principalfromABS.
54
Figure19.LNGBunkeringBarge
Waller Marine states that with strategically located LNG supply facilities, a
distribution by Waller barges to smallscale LNG storage terminals combined
with ship fueling with Waller LNG bunker barges at anchorages, ports, and
terminals throughout the United States, vessel owners will have access to
competitively priced LNG. Waller anticipates that substantial savings can be
achieved by vessel owners using LNG fuels with payback for conversion costs
being as short as six months. Waller has also initiated a vessel conversion
strategyandisworkingwithpartnersonprovidingfundingfortheconversion
of ships to be fueled by LNG. Working with engine manufacturers and
equipment suppliers, Waller is engineering shipboard LNG fuel storage and
supplysystemsforvesselshavingarangeofhorsepower.Thecompanyisalso
developingpremanufacturedsystemstoreduceoreliminatedowntimeduring
conversion.
7.5
Future Marine Fuel Use
Table 10 shows a best estimate distribution and mix of marine fuel consumption in
2020.FossilfuelsareconsideredtoremainthedominantfuelwithLNGshowingalarge
percentageofusagebysmallervesselsonfixedroutesoperatinginSECAsandECAs.
55
Table10.2020MarineFuelMix(Mton/year)
VesselTypes
No.ofVessels
Small
Vessels,
Ferries,etc.
55,000
HFO[Mton/yr]
204
204
LSFO[Mton/yr]
MGO/MDO
[Mton/yr]
LNG[Mton/yr]
Biofuels,etc.
[Mton/yr]
TotalFuel
[Mton/yr]
Percentof
Market(%)
110
110
44
25
69
15
15
60
204
136
400
15%
51%
34%
100%
CargoShipswith CargoShipswithout
SulfurRemoval
SulfurRemoval
Total
30,000
20,000
105,000
Lloyds Register predicts the following usage levels of LNG by 2025 using their Base,
High,andLowCasescenarios(Table11,Ref.57).
Table11.LNGUsageLevelsfortheBase,High,andLowCasesPredictedbyLoyds
Register
Scenario
BaseCase
HighCase
LowCase
NewbuildsusingLNGasFuel
forDeepSeaTrades2012
653
1,963
13
56
CumulativeLNGConsumption
20122025forDeepSeaTrades
(MnT)
24
66
0.7
8.
Vessels Using Alternative Fuels
Thefollowingparagraphsdiscussthetypesofvesselscurrentlyusingorundercontract
tousealternativefuelsorthathavebeenmodifiedandthemarinefuelstheyareusing
forcompliancewiththelowsulfurfuelandNOxemissionrequirements.
8.1
Vessels Using ULSD and LSRF
Currently, vessels using residual fuels are switching to an LSRF, a distillate fuel, or a
blendofdistillateandresidualfuelstomeetbothECAfuelsulfurlimitsandfuelsulfur
limits in lowfuel sulfur zones, such as Californias Coastal Waters (CCW) fuel sulfur
requirements within 24 nautical miles (nm) of the California coast and the EUs Ports
Directive 2005/33/EC, which requires a 0.1% maximum sulfur limit on fuels used at
berth in EU ports (Ref. 60). The European Union Port Directive for lowsulfur fuel
became effective on January 1, 2010. In the United States and Canada for 2012, the
distillatemarinefuelisULSDsothemajorityofvesselsfuelingwithmarinedieselinthe
UnitedStatesareusingtheULSDfuelthatiswellwithintheECAsulfurlimits.About70%
ofU.S.shippingreliesondistillatefueloil,andtheremaining30%reliesonresidualfuel
oil. By contrast, more than 90% of international shipping is fueled by residual fuel oil
(Ref.46).Atthistime,theuseoflowsulfurdistillatesorlowsulfurresidualfuelsisby
farthemostprevalent,whereastheuseofscrubbersforSOxremovalisnotwidespread.
Thefutureavailabilityoftheselowsulfurbunkersisofconcerntotheshippingindustry,
especiallygiventhe0.1%sulfurlimitonfuelsusedintheECAsbeginningin2015andthe
0.5%sulfurlimitthatmustbefollowedonaglobalbasis.TheInternationalChamberof
Shipping(ICS)hascalledontheIMOtoexpediteastudyontheworldwideavailabilityof
lowsulfur bunkers and on whether availability issues could impact the cost of these
fuels,makingthemprohibitivelyexpensive(Ref.13).
8.2
Vessels Using Natural Gas
Vessels currently using natural gas as a fuel are mostly in the small to mediumsize
range with larger ships being built or converted for operation on LNG fuel. The only
largeshipscurrentlyusingLNGasafueloninternationalvoyagesareLNGcarriers.The
following paragraphs describe the distribution of LNGfueled vessels and what the
futurelookslikeforconstructionofnewLNGfueledships.
SmalltoMediumSizeThemajorityofshipsoperatingonnaturalgastodayaresmall
tomediumsizeconsistingofOSVs,carandpassengerferries,patrolcraft,andtugs.In
thespringof2011,therewere22vesselsoperatingonLNGfuel,andallexceptonewas
operatinginNorway.Thisnumberhasincreasedto37accordingtoDNVintheMarch
57
2013MarineLogreporttitled,WhoHasGasandWhoWantsIt?,andthisnumberis
expectedtoreach63by2015.ThesenumbersdonotincludeLNGcarriers.
Eighteen (18) more natural gas vessels are to be delivered in 2013 with many more
planned.Inadditiontotheshiptypesmentioned,RO/ROshipsareincludedamongthe
new builds (Ref. 61). Delivered this year (2013) is the 214meterlong, LNGfueled
passenger vessel Viking Grace for Viking Lines with a capacity of 2,800 passengers
(Ref.62). The 57,000gt M/S Viking Grace entered service between Turku, Finland, to
thelandIslandsofStockholm,Sweden,onJanuary15.ThefourWrtsil8L50DFdual
fuel engines and associated technology enable the Viking Grace to sail without
restrictionsinbothSECAsandnitrogenemissioncontrolareas(NECAs)(Ref.63).
Norwegian shipping company Fjord Lines two new 170meter international cruise
ferries will be powered by LNG. When the Fjords Line MS Stavangerfjord is put in
operationinAprilthisyear(2013),itwillbethefirstandlargestcruiseferryintheworld
tosailwithasingleLNGengineFjordLinechoseRollsRoyceasthesupplierofthe
LNG engines in both ferries. Emissions of the RollsRoyce engines are below the limit
values of IMO Tier III. The four RollsRoyce engines supplied for each ferry were
12cylinder LNG engines of type B35:40V12PG with an output rating of
5,600kW@750rpm. The ferries have 306 cabins and space for more than
1,500passengersand600cars(Ref.64).
TworecentlyorderedNorwegianfishfeedtransportersaretobeLNGfueled.Theywill
haveanadvancedLNGgaselectricpropulsionsystem.Themainparticularsare69.90m
inlengthoverall(LOA),withabeamof17.20mandadepthof7.90mfromtheupper
deck.DeliveryofthevesselsisplannedforJuneandSeptemberof2014(Ref.65).
InadditiontotheseLNGfueledEuropeanvessels,HarveyGulfInternationalMarineof
New Orleans,Louisiana, is building five 302foot STXMarinedesigned, dualfuel OSVs
at Trinity Offshore Yards, in Gulfport, Mississippi, in the United States (Ref. 66 and
Ref.67).TheOSVswilluseWrtsil6cylinder,34DFdualfuelenginesandtheWrtsil
LNGPacsystemtechnology.ShellOilhascharteredthreeoftheHarveyGulfOSVsforuse
in support of Shells operations in the U.S. Gulf of Mexico. Also planned for North
Americanserviceisa130meterlongCanadianferrythatcanuseeithernaturalgasor
marinedieselfuelthathasbeenorderedbyCanadasSocietedestraversiersduQuebec
(STQ). It will have a capacity of 800 passengers and 180 cars. The diesel electric
propulsion plant will have four dieselpowered generators (Ref. 68). The ship is being
builtbyFincantieriCantieriNavaliItalianiinItalyandwillbeusedonroutescrossingthe
St.Lawrence River. The ferry vessel is scheduled for delivery by the end of 2014
(Ref.67). Wrtsil has been awarded the contract for the gaspowered propulsion
machinery. The Wrtsil 34 dualfuel generating sets will provide the main power
generation and can be switched to MDO for fuel redundancy if LNG is not available.
Wrtsil will also supply its LNGPac system consisting of onboard fuel storage tanks,
LNG bunkering, and handling equipment. Wrtsil will also provide the safety control
andautomationsystems(Ref.69).
58
For South American service, Australian shipbuilder Incat Tasmania Pty. Ltd., launched
the worlds first highspeed passenger RO/RO ship to operate on LNG. Sea trials were
conductedinJanuary2013.The99mLNGshipwasbuiltforSouthAmericancompany
BuquebusforoperationonitsRiverPlateservicebetweenBuenosAires,Argentina,and
MontevideoinUruguay.Ithasacapacityformorethan1,000passengersand153cars,
with a projected lightship speed of 53knots and an operating speed of 50knots. The
vesselwillbethefirstinstallationofLNGpowered,dualfuelenginesinanIncathigh
speedferry,andthefirsthighspeedcraftbuiltundertheHSCcodetobepoweredby
gasturbinesusingLNGastheprimaryfuelandmarinedistillateforstandbyandancillary
use(Ref.70).
In China, a contract was signed in July 2012 for two dualfueled 6,500 HP tugs. The
vesselswilleachbepoweredbytwo6cylinderWrtsil34DFinline,dualfuelengines.
ThefirstofthetugswasexpectedtobedeliveredinJune2013(Ref.71).
Table12listsnewLNGfueledvesselsorderedthrough2015(Ref.72).
Table12.CurrentOrderBookforNewLNGFueledVessels(20122015)a
DeliveryYear
(Numberof
Vessels)
Delivery2012(4)
Delivery2013(18)
VesselType
Platformsupply
Car/passengerferry
Car/passengerferry
Harborvessel
HighspeedRoPax
RO/RO
RO/RO
RoPax
RoPax
Generalcargo
Car/passengerferry
Car/passengerferry
RO/RO
RO/RO
RoPax
Tug
Platformsupply
Platformsupply
Patrol
Car/passengerferry
Tug
Tug
59
Ownerb
REM
ToghattenNord
ToghattenNord
IncheonPortAuthority
Buquebus
SeaCargo
SeaCargo
Fjordline
Fjordline
Eidsvaag
Norled
Norled
Nordlines
Nordlines
VikingLine
BukserandBerging
HarveyGulfIntl
HarveyGulfIntl
FinnishBorderGd.
STQ
CNOOC
CNOOC
Classification
Societyb
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
DNV
LR
DNV
ABS
ABS
GL
LR
CCS
CCS
Table12.(Cont.)
DeliveryYear
(Numberof
Vessels)
Delivery2014(9)
Delivery2015(3)
Notes:
Classification
VesselType
Ownerb
Societyb
Car/passengerferry STQ
LR
Car/passengerferry STQ
LR
Tug
BukserandBerging
DNV
Platformsupply
HarveyGulfIntl
ABS
Platformsupply
HarveyGulfIntl
ABS
Gascarrier
SABIC
BV
Gascarrier
SABIC
BV
Platformsupply
RemeyShipping
DNV
Platformsupply
SiemOffshore
DNV
Platformsupply
HarveyGulfIntl
ABS
Containership
TOTE
ABS
Containership
TOTE
ABS
(1)HarveyGulfInternationalMarinehasoptionsforuptofive
moredualfuelplatformsupplyvessels.
(2)TOTEholdsoptionsforthreemorecontainerships.
DoesnotincludeLNGcarriers,inlandwaterwayvessels,andconversions.
ABS=AmericanBureauofShipping;BV=BureauVeritas;CCS=ChineseClassificationSociety;
CNOOC=ChinaNationalOffshoreOilCorporation;REM=RemOffshore;SABIC=SaudiBasic
IndustriesCorporation;TOTE=TotemOceanTrailerExpress.
AnumberofconversionstoLNGareplannedorhavebeencompleted.Somerecentand
plannedvesselconversionstoLNGarediscussedinthefollowingparagraphs.
The Bit Viking (Figure 20), a 177meterlong, chemical product tanker originally
delivered in September2007, wasconverted to LNG from HFO and redelivered toher
ownerinOctober2011.ShecurrentlyisoperatingalongtheNorwegianCoast.TwoLNG
storagetankswithacombinedcapacityof1,000m3locatedontheshipsmaindeckgive
BitVikinganendurancerangeof12dayssteamingat80%load(Ref.73).
WashingtonStateFerries(WSF)hassentoutaRequestforProposal(RFP)toconvertsix
(6)oftheirIssaquahFerriestoburnLNG.The328footlongferrieswerebuiltin1980to
carry1,200passengersand100cars.Fiveweremodifiedtocarry130carsinthe1990s.
The Washington State Ferry system burns more than 17million gallons of ultralow
sulfur diesel each year considers this their fastestgrowing operating expense. WSF
believesthatLNGhasthepotentialtosignificantlyreduceemissionsandthecostoffuel
(Ref.67).
60

Figure20.BitVikingwithLNGFuelTanksontheMainDeck
TheWSFretrofitplanestimatesafuelsavingsof$195.5millionfromthefirstconversion
in2015totheretirementofthelastconvertedferryin2042.TheuseofLNGwouldalso
reduce emissions. The ferries would be retrofitted with new gas only or dualfuel
enginesandtwo100m3LNGtankslocatedontheupperdecknotusedbypassengers
(Ref.74).
Tohelpensurethatthesafety,security,andoperationalchallengesofsuchamoveare
handled in a responsible manner, WSF has partnered with DNV, which has extensive
experiencewithLNGfueledvesselsandtheinfrastructuretheyrequire(Ref.67).
WSF has received conceptual approval from the U.S. Coast Guard to retrofit the
propulsion system with new engines on the six Issaquah Class ferries to use LNG as a
sourceoffuel.ThesevesselswouldbefueledbytruckinginLNGfromsourcesinBritish
ColumbiaorthePacificNorthwest.Figure21showstheLNGtanksonthetopdeckof
theIssaquahClassferry(Ref.67).
61
Figure21.LNGTanksonTopDeck
ofWSFIssaquahClassFerry
NewYorkCityplanstoconvertoneofthedieseloilfueledStatenIslandAustenclass
ferriestouseLNGforfuel.Ifsuccessful,theconversioncouldsavethecitynearlyhalf
theboatsfuelingcostannually.TheferrywillbeconvertedtoLNGduringaroutinedry
dockingin2013.
The Staten Island Ferry received a $2,340,000 federal grant, and the city contributed
additionalmoneytoreach$3millionfortheconversion(Ref.75).
TotemOceanTrailerExpress(TOTE)ofTacoma,Washington,planstoconverttwoofits
existingshipstoLNG.TOTEhasfinalizedacontractwithGeneralDynamicsNASSCOto
design the conversion of two of its ORCA class RollOn/RollOff ships to burn LNG. In
August2012,TOTEreceivedapermitfromtheU.S.CoastGuardprovidingaconditional
waiverfrommeetingtheNorthAmericanECAfuelsulfurrequirementswhileitconverts
thevesselstoLNG(Ref.76).Theengineering,design,andinstallationoftheenginekits
andconstructionoftheLNGplantcouldcost$84millionforthetwoshipsandtakeup
tofiveyears.Theconversionwilltakeplacewhiletheshipsareinservice.The839foot
long ships operate between Tacoma, Washington, and Anchorage, Alaska, serving the
Alaskan market. The shoreside support infrastructure being built to support the ships
willhelpothertransportationindustriesinPugetSoundtoconverttoLNG(Ref.77).The
company has contracted with General Dynamics NASSCO for the conversion design
(Ref.78).
62
8.2.1 LargeShips
ThemajorityoflargeshipsusingLNGfuelfortheirenginesareshipscarryingnaturalgas
intheliquefiedstateasLNGcargoandthatusetheboilofffromtheircargoasfuelfor
theirpropulsionandauxiliaryengines.Therewere359LNGshipsengagedinthedeep
seamovementofLNGattheendof2011(Ref.79).
DesignsforlargeshipsusingLNGfuelhavebeendeveloped,andacontractfortwonew
LNGpowered container ships has been announced. International classification society
BureauVeritas(BV)hasgivenapprovalinprincipleforthebasicdesignofa14,000TEU
containership to be powered by LNG. The design was developed in a joint industry
project between Koreas Daewoo Shipbuilding & Marine Engineering (DSME), liner
majorCMACGM,andBV.AfeatureofthisdesignisthatthevesselcanalsorunonHFO
ifrequired,increasingflexibilityintheperiodbeforeLNGbunkeringiswidelyavailable.
Thebasicdesignisfora365.5meterLOAvesselwithadesigndraftof14mandadesign
speed of 24 knots. The main engine would be rated at a maximum continuous rating
(MCR)of72,285kW,andthevesselwouldhavearangeof25,000milesfullybunkered.
Compared to the same ship with a conventional fuel power plant, there will be extra
capitalcostfortheengineandfortheLNGtankandgashandlingsystem,andthereisa
loss of cargo space equivalent to 438TEU to make room for the gas tank and
equipment.However,theextracapitalcostandthelossofearningsonatheoreticalfull
ship are more than offset by the fuel economies and lower emissions of this design
(Ref.80).
DSMEalsoparticipatedinajointresearchprojectwithA.P.MollerMaerskforthedesign
of a 7,000TEU container ship burning LNG as a fuel for both propulsion and power
generation. The American Bureau of Shipping (ABS) provided approval in principal in
May2011.
AlsoannouncedrecentlyistheGreenDolphindesignfora180meterLOAbulkcarrier
thathasasoneofitsvariantstheuseofLNGasfuel.Theenginescanberetrofittedto
bedualfuel(Ref.81).
TOTE has contracted for the construction of two LNGpowered containerships to be

MAN powered and NASCCO built. They will be stateoftheart, 764footlong,
3,100TEU containerships for the Puerto Rican trade with options for three more for
domestic service. The ships will be built by General Dynamics NASSCO of San Diego,
California.Constructionofthefirstshipisscheduledtobeginthefirstquarterof2014,
withdeliveryinthefourthquarterof2015.Thesecondshipisscheduledfordeliveryin
thefirstquarterof2016.TheywillbeusedinservicebetweenJacksonville,Florida,and
SanJuan,PuertoRico.TheshipswillbedesignedbyDaewooShipEngineeringCompany
(DSEC)andwillincludeDSMEspatentedLNGfuelsystemandaMAN8L70MEGIdual
fuel,slowspeeddieselengine.Thedoublewalled,typeCLNGfueltankswillbelocated
behindtheshipsaccommodationblockabovedeckforsafety,cargoloading,andspace
63
utilization. See Figure 22 for a conceptual illustration of the new TOTE containership
showingthesternlocationoftheLNGfueltanks(Ref.82).
Figure22.ConceptIllustrationofTOTEContainerShip
Itisestimatedthatbetween2012and2020,1520%ofthenewshipsthatwillbebuilt
willhavethecapacityforburningLNGasapropulsionfuel.Thisestimatedpercentage
equatestoapproximately1,000ships(Ref.43).
8.3
Vessels Using Liquid Biofuels
Theuseofliquidbiofuelsisanattractivealternativetomarineownersandoperatorsas
theirusecanusuallymeanlowersulfuremissions,andshipconversionsaremanageable
andnotasexpensiveasmodifyinganexistingshipforLNG.However,thecost,limited
availability,andcompatibilityissuesofsomebiofuelssuchasbiodiesel(FAME)maylimit
their use in the near future. There are exceptions and those marine users attempting
thelargescaleuseofliquidbiofuelsarediscussedinthefollowingparagraphs.
OneexceptionisthebiofuelandpetroleumblendthattheU.S.Navyhasdevelopedfor
use in its fleet. The fuel is produced to the Navydeveloped hydrotreated renewable
diesel76 (HRD76) specification and consists of 50% HRD76 fuel and F76 petroleum
diesel.Thefuelistrulyadropinfuelanddoesnotrequireanymodificationstoexisting
enginesortheshipsfuelsystems.
The Navy awarded a contract for production of 450,000 gallons of the biofuel; the
contract involves supplying the Navy with 100,000 gallons of jet fuel (hydrotreated
64
renewableJP5orHRJ5)and350,000gallonsofthemarinedistillatefuelHRD76.The
fuel will be used as part of the Navys efforts to develop a Green Strike Group
composedofvesselsandshipspoweredbybiofuel(Ref.83).
The fuel will be manufactured at Dynamic Fuels Geismar, Louisiana, renewable fuels
plantusingU.S.sourcedyellowgrease(usedcookingoil),aswellasSolazymestailored
algaeoilasfeedstocks.TheDynamicFuelplant,whichhasbeeninoperationformore
thanayear,isdesignedtoconvertnonfoodfeedstockssuchasalgaeoil,animalfats,and
greasesintorenewablefuels(Ref.83).
Astheavailabilityofbiofuelsincreasesespeciallythesecondgenerationbiodiesels
there will be the opportunity to supply the marine market with biofuels that can
substituteformarinedistillatefuels.
Stena Line is experimenting with liquid biofuel on a large scale and plans to use
methanoltomeet emissions standards for EuropesSECAs coming into effect in 2015.
StenaLineisworkingwithWrtsilandotherprojectpartnerstoapplyforcofundingof
the copilot project under the TransEuropean Transport Network (TENT) scheme to
converttheStenaLinesGermanicaferrytorunonmethanolin2014.Stenabelieves
that its project fits neatly in line withthe scheme's objective to invest in projects
thatwilldeliverandmakeadifference(Ref.84).
Methanolcanbeproducedasabiofuelandissustainablebecauseitcanbemadefrom
celluloseanddoesnotcompetewithfoodsources.ItcanalsobesynthesizedfromCO2
andhydrogen.
StenaLinehaslaunchedandisconductingatestforusingmethanol,withthefirsttrial
takingplaceontheGothenburgFrederikshavntrainferryStenaScanrail.Dependingon
theoutcome,StenaLineplanstoconverttheStenaGermanicainthefirsthalfof2014
(Ref.85).
Inthelongterm,ifthetrialsarepromising,StenaLinehasavisiontorunthewholeof
its SECA fleet on methanol, and it has an ambitious target of converting 25 vessels to
methanolby2018.
65
66
9.
The Way Forward for Future Marine Fuels
As the shipping industry considers alternatives to HFO, part of the market will shift
toward MGO, part toward LNG, and some possibly to liquid biofuels. Marine vessels
equippedwithscrubberswillretaintheadvantageofusinglowerpricedHFO.Shipping
that takes place outside ECA areas might choose HFO or LSFO depending on future
global regulations. Ships operating partly in ECA areas will probably choose MGO as a
compliancefuel.HeavyshippingwithinECAareas,however,mightrequireacomplete
shifttoLNG.
Unlike the case for road transportation, fuels are not simply procured by the vessel
owner accordingto enginemanufacturers specification. In fact, thechoice of fuel lies
primarilywiththecharterer(theshippingagent)who,inprinciple,rentsthevesselfrom
a shipowner. Depending on the engine type, the charterer then has a choice of fuels.
Typically, highsulfur residual fuels or lowsulfur distillates are among the choices.
Depending on the abatement technologies installed by the ship owner and the
requirements set by the authorities in the specific region of operation, the charterer
thenselectsandacquiresthefuel(Ref.35).
Figure 23 shows the influence on the buying process of marine fuels for large freight
vessels.Thechoiceisbasicallyonthecharterer,whoalsohastoselectavesselforeach
transport. The choice of fuel is then affected by many factors, such as emissions
requirementsontheselectedroute,thefuelsavailabilityandprice,andtheabatement
equipmentinstalledontheship.Thecontractdurationwillbeinfluencingtheowners
decisiononwhethertoretrofitabatementequipment.
Figure 23 applies to large freight vessels. Other segments (groups of customers) are
private boats, fishing boats, ferries, etc. In terms of global fuel use, however, freight
vessels are dominant. According to the IMO, international shipping consumes
approximately83%ofglobalmarinefueluse.
Withreferencetotheorganizationalaspects,itisimportanttonotethattheIMOisan
organizationofmajorimportance.Therefore,itisalsoessentialtopinpointthedecision
making processes that underlie the birth of IMO requirements and how the IMO is
influencedbydifferentpartners.
The IMO issues the MARPOL convention Annexes, which contain the actual emissions
requirements. Current international marine emissions requirements are discussed in
Section3.
67

Figure23.FuelSelectionProcessisResponsibilityoftheCharterer
andIsInfluencedbyManyFactors
9.1
BreakEven Points
Whendecidingonastrategyforcomplyingwithemissionslaws,theallimportanttrade
offisthecostoflowsulfurfuelversusthecostofascrubbersystem.Suchasystemcost
is in the region of $3million USD. Depending on the oncost for lowsulfur fuel, the
breakevenpointthusliesintheregionof730MToffuelusedwithintheamortization
period(35years).ThepaybacktimesshowninFigure24wereinvestigatedbyaDanish
consortiumcalledGreenShipoftheFuture(Ref.86).
For example, DS Norden operates four tankers, with an average of 13.5% navigation
time in ECA areas which is similar to the case in Figure24. The payback time for a
scrubberwouldthusbeatleast6years,morelikely10years.
68

Figure24.BreakEvenAnalysisforScrubberInstallation
on38,500dwtTankers(Ref.86)
Currently, ULSD and LSRF are the most viable marine fuel alternatives for the near
future,andsomepredictdistillatestobecomethemorelikelyoptionoutthrough2020
insteadofexhaustscrubbers(Ref.43).
ThesefuelsaregoodforSOxreductionbecausetheyhavelowsulfurcontentandtheir
availability is good worldwide at bunkering ports. NOx reduction in 2016 for ships
operating in ECAs will require the installation of aftertreatment devices or the
retrofittingofemissioncompliantengines.
Biofuelshavenotmadeinroadsintothemarinefuelsmarketandgiventheirlimited
availability, higher cost, and (in some cases) their incompatibility issues (i.e., higher
concentrations of biodiesel [FAME]) will probably not see largescale use by ship
operatorsasaneatfuel.BecausetheycanbeblendedwithULSDandLSRF,biofuelsmay
findtheirwayintothemarinefuelmarketastheybecomemorewidelyavailable.Inthe
UnitedStates,biodiesel(FAME)canbeblendedintoregulardieselfuelupto5%inthe
revised ASTM D975 Specification for Diesel Fuel Oils used for on and offroad diesel
applications. According to the ASTM, there will be no significant change to diesel fuel
propertiesortheirrequirements(Ref.87).Labelingofthefinishedblendisnotrequired
so that it may not be possible for the purchaser to know whether or not the fuel
containsbiodieselunlessananalysisiscarriedout(Ref.88).Becausethisspecification
coversoffroaddieselfuel,therecouldbesomeusebythemarineoperatorswhouse
69
distillatefuelsorwillbeusingdistillatefuelstosatisfysulfurlimitssetbyECAs,theCCW,
andEUports.
Secondgenerationbiodiesel,a.k.a.renewabledieselorHDRD,maybeviableformarine
useifproductioncanbescaledupanditiscostcompetitive.HDRDcanbeproducedto
meetcurrentdieselfuelspecificationssoitsuseistransparenttotheenduser.Itcanbe
blended with petroleum diesel so that, like biodiesel (FAME), it may find its way into
marine use either as a neat fuel or as a blend with petroleum diesel. Currently,
U.S.capacityforHDRDis297milliongallons,andinEurope,NesteOilhasacapacityof
800,000 metric tons (approximately 244 million gallons), and new capacity is being
added.
ThesecondgenerationbiodieselssuchasHDRDmadefromcertainfeedstocks,suchas
wastevegetableoilsoranimalfats,arecostcompetitivewiththedistillatefuelsbutnot
residualfuel.
70
10. Conclusions
The followingconclusions have been reached as a resultof the research conducted in
developingthisreport.Thefutureofmarinefuelsappearstobeacombinationoffuel
types combined with new propulsion technologies and retrofit fuel systems and/or
emissionssystems.
Given the environmental challenges facing the marine shipping industry to

lowertheexhaustemissionsofSOx,NOx,PM,andCO2,therewillbechangesin
the mix of fuels that shippers use as they attempt to meet international and
localexhaustemissionrequirements.Itwillnolongerbeonesizefitsall.
Forthepresentandforeseeablefuture,theuseoffossilfuelswillcontinueto
bethedominantfuelwithvariousschemesusedtomeetthe1%lowsulfurfuel
requirements in the ECAs. One possible arrangement is to use a lowsulfur
residualfuel.Theotheristouseablendofdistillateandresidualtolowerthe
sulfur content, and the last is to have a dualfuel system, which allows
operatorstoswitchtothelowsulfurdistillatewhenneeded.
As shown in Table 13, it is difficult to find a strategy that meets all

requirements.However,itispossibletocombinealloftheabovewithpartial
LSfueloperation,sonosolutionshouldbeexcluded.
With the arrival of the 2015 ECA sulfur limit of 0.1%, some are predicting a
switchtomostlydistillatefuel,assumingthata0.1%LSRFwillnotbeavailable;
thistrendispredictedtolastuntil2020.
Exhaustscrubbersareaviablealternativetousinglowersulfurfuelsandhave
been shown to be effective in marine installations; as of this date, however,
there are not many ship scrubber installations in existence not enough to
indicateamajortrendtowardtheiruseversususinglowersulfurfuels.
Natural gas stored as LNG is definitely a viable alternative propulsion fuel for
ships and has been demonstrated many times in vessels on fixed and coastal
trade routes and is continuing to appear in newbuilds that will be using LNG
fuelsystemsandgasengines.DevelopmentofaglobalLNGbunkeringsystemis
criticaltotheexpansionofuseofthisfueltothelargershipsizesthattravelon
internationalroutes.
71
Table13.SummaryofEvaluationofPropellantSystems
Engineandfuel
systemcost
LSFO
Dropin
Dropin
Dropin
Dropin
Refining
Refining
Landuse
Projectedfuel
cost
Emission
abatementcost
MGO/GTL/ HVO/SVO/
BTL
FAME
IFO
SOx,NOx,
PM,CO2
MeOH
DME/LPG
LNG/LBG
Dualfuel
Gastank
Dualfuel
Cryotanks
Infra
structure
Infra
structure
Flashpoint
Ventilation
Press/temp
Cargospace
Cargospace
Cargospace
NOx,
PM,CO2
Safetyrelated
cost
Indirectcost
Ethics
Seriousimpediment
Signifficantcost
Feasiblesolutionavailable
LNGshouldremaincostcompetitivewithmarinefossilfuelsfortheforeseeable
futureandprovidesastrongincentivefornewbuildstohavegasenginesand
LNGfuelsystems.Thehigherinitialcostofconstructingagasfueledshipcan
be recovered over the lifetime from the lower fuel costs. In addition, LNG
fueledshipsthatspendalargepartoftheirtimeoperatinginECAswillbeable
to comply with the lowsulfur and NOx Tier 3 requirements for gas engines
withouthavingtoswitchfuelsoraddexhaustaftertreatmentemissionsdevices
forSOxandNOxreduction.
For NOx compliance in 2016 for new ships that operate in the ECAs, the
consensus seemed to be that these vessels would be equipped with
aftertreatmentdevicestoreduceNOxemissions.Shipsusinggasfiredengines
may be able to comply without theneed for an aftertreatment device. There
are gas engines available that are certified as complying with the IMO Tier3
NOxlimits.
Compliancewiththenewemissionsrequirementswillraiseoperatingcostsfor
shipowners and operators in terms of new construction ships that will have
morecomplicatedfuelsystems(andperhapsaftertreatmentdevices)andrun
72
on more expensive lowsulfur fuels when in the ECAs and other lowsulfur
complianceportsandcoastalwaters.Someexistingshipsmayalsohavetobe
retrofittedwithdualfossilfuelsystemsforfuelswitchingwhentheyenterthe
ECAs.
Biofuels do not seem to be an alternative at present given their limited

availabilityandhighcost.Inparticular,FAMEbiodieseldoesnotappeartobe
emerging a good candidate for marine use in large ships because of quality
relatedissues.
It is early to determine what course shipowners are going to take for

compliance with the Tier3 ECA NOx requirements in 2016. As contracts are
awarded for ships that will be new as of that date, the trend will be more
discernible.
TheuseofLNGasamarinefuelisprojectedtogrowto15MTayearby2020to
apossible66milliontonnesin2025.
73
74
11. Recommendations
The following steps are recommended for remaining up to date on developments on
alternativefuelsuse:
Continue this study to determine trends and obtain firsthand information on

howshipoperatorsarecomplyingwiththeECArequirements.
Monitor the progress of large LNGfueled ships coming into the shipping mix
andtheprogressonestablishingmarineLNGbunkeringfacilities.
Monitortheactionsthatshipownersandoperatorsaretakingtobecurrentin
theircompliancenowandforthestricteremissionsrequirementscominginto
effectin2016and2020.
Continuetostudytheprogressofbiofuelproducersandtheirabilitytoproduce
lowcost,highvolumefuelsforthemarineshippingindustry.
75
76
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80
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81
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82
Appendix A Marine AfterExhaust Treatment

Systems
A.1
Selective Catalytic Reduction (SCR) and Exhaust Gas

Recirculation (EGR) Systems
MAN Diesel & Turbo is currently preparing to launch both SCR and advanced EGR
solutionsonthemarket(Ref.89).TheEGRsolutionwillincorporateahighpressureloop
withanintegratedscrubbersothatbothnitrogenoxides(NOx)andsulfuroxides(SOx)
canbereduced.TheSCRsolutionreducesonlyNOx(seeFiguresA1andA2).
FigureA1.SCRSolutionbyMAN(ReducesNOx)
83
TheEGRsystemdepictedherereducesbothNOxandSOx;however,theSOxisreduced
byonly20%.
FigureA2.AdvancedEGRSystembyMAN
84
A.2
Scrubber Systems
AlfaLavalhasrecentlylaunchedretrofitscrubbersonthemarket(FigureA3).Internal
testshaveshownthatthesystemsareeffective(Ref.90).
FigureA3.ScrubberSystembyAlfaLaval
Alfa Laval equippedDFDSFicaria Seawayswith presumably the worlds largest retrofit

scrubberin2009(seetheschematicinFigureA4).
85

FigureA4.FicariaSeawaysEquippedwithPresumablyWorldsLargest
RetrofitScrubberin2009(Source:AlfaLaval)
Wrtsiloffersaclosedsystemfreshwaterscrubber,asshowninFigureA5.
FigureA5.ClosedLoopScrubberbyWrtsil
86
CoupleSystemsGmbHsuppliesadryexhaustgascleaningsystem(EGCS)(FigureA6),
suchasmountedontheMVTimbus.Thesystemisbasedonlimestone,Ca(OH)2,which
turnsintogypsumduringthesulfurneutralizationprocess.Thepressurelossisverylow
at 600800 Pascal as compared to wet scrubbers, where the pressure drop of wet
scrubbersisabout3,000Pascal.Thecostforthesystemisapproximately770,000EUR
fora3.5MWsystemand1,350,000EURfora12MWsystem(seeFigure14).
However,infrastructureisneededforthenewandusedsorptionproduct.
FigureA6.DryScrubberSystembyCoupleSystems,Germany
87
88
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Annex 41

A Report from the IEA Advanced Motor Fuels Implementing Agreement

Alternative Fuels for

A Report from the IEA Advanced Motor Fuels Implementing Agreement

Alternative Fuels for

Acronyms and Abbreviations

Executive Summary Annex 41

Elements in Figure 3 are sometimes competing against each other, especially

Legislation for Marine SOx Reduction

Legislation for Marine NOx Reduction

Compliance with Marine SOx and NOx Legislation

Fuel Prices and Availability

Current Marine Fuels (World Market)

Global Fuel Consumption by Vessel Type

Alternative Marine Fuel Incentives

No degradation of engine performance occurs with their use that would

The alternative fuels are available in sufficient quantities worldwide or

Specific aspects related to the manufacturing, conversion, certification, and operation

The projectwill be managed by the TransEuropean Transport Network Executive

Alternative Marine Fuels and Engines

Liquid or CrudeBased Fossil Fuels (IFO, LSFO, MGO,

combustion characteristics. In 2004, a longterm alliance agreement was established

Liquid Biofuels (Fuels from Vegetable Oils and Animal

LNG is chemically identical to biomethane. Biomethane is generally known to be the

Port Gas Injectors

Diesel pilot injector

Exhaust Gas Treatment Systems (EGTSs)

Closedloop systems that use freshwater with the addition of an alkaline

Cost of scrubber system

Assessing Alternative Fuels for Marine Use

When assessing fuels, it is necessary to evaluate several parameters related to the

Liquid Fossil Fuels (ULSD, LSRF) Advantages

Liquid Fossil Fuels (ULSD, LSRF) Drawbacks

Liquid Biofuels Characteristics

Fuel System and Engine Compatibility Many marine engine manufacturers

Lower SOx Emissions Neat biodiesel contains almost no sulfur, so SOx

Fuel System and Engine Compatibility Biodiesel, especially in higher

Cleaning Effect Biodiesel especially in higher concentrations has a

LongTerm Storage Stability Biodiesel can degrade over time, forming

Potential Algae can grow at amazing rates compared to farmland crops.

Availability Commercial availability is limited. The U.S. Navy is the primary

Availability Current availability is limited. There are only a few companies

Gaseous Fuels: Natural Gas (Compressed [CNG] or

Cost Natural gas is expected to be cost competitive with residual and

In comparison, the conversion of the Bit Viking, a 177meterlong chemical

Increased Fuel Storage Space Increased fuel storage space is required to

Increased Safety Requirements Thecarriage of natural gas as a fuelentails

Limited Bunkering Infrastructure For LNG to become an attractive fuel for

o In principle, Europe is well prepared for this future as local LNG

The project will be managed by the TransEuropean Transport Network

Also anticipating a European LNG marine fuel infrastructure is a 50/50 joint

Other ports are looking at the development of LNG bunkering facilities.

In Asia, Singapore has set up a joint industry project (JIP) to provide

o LNG bunker demand is highly dependent on LNG pricing and its

o Cumulative LNG bunker demand is expected to reach 24 million tonnes

o A total of 13 LNGfueled newbuilds forecasted for the period up to 2025

Lloyds Register also noted that operating on lowsulfur distillate fuels is a

4. LNG bunker demand is highly dependent on LNG pricing and its

Lloyds Register will continue monitoring global commercial developments of

A comprehensive North European LNG infrastructure study was released in

Barriers to the introduction of LNG do not appear to be technical but are

An immediate focus on the ferry sector in Denmark will reap benefits in a

Using smallscale liquefaction technology, Waller Marine plans to install