FIThe shipping industry is being urged to accelerate its decarbonization efforts considering ambitious new targets and regulatory developments. With aims to cut CO2 emissions by 40 percent by 2030 and reduce total annual greenhouse gas (GHG) emissions from international shipping by at least 20 percent by 2030 and 70 percent by 2040, the sector faces significant challenges ahead.
Spurred on by the tightening regulation of the European Union, a key objective of the international maritime sector is for green technologies, fuels, and energy sources to constitute at least 5 percent, and preferably 10 percent, of shipping’s energy consumption by 2030. Achieving these revised GHG reduction targets will necessitate a multifaceted approach, including improvements in energy efficiency, the adoption of alternative fuels, innovative ship designs, and new propulsion methods. Insurers such as Allianz are at the forefront, supporting the industry’s experiments with biofuels, ammonia, methanol, green hydrogen, electric vessels, and wind-assisted propulsion systems like wing sails, rotors, and foils.
New Technology, New Infrastructure
However, the path to decarbonization is fraught with challenges. The industry must simultaneously integrate new technologies and phase out fossil fuels, while developing the necessary infrastructure for alternative fuels, including bunkering and maintenance. Safety concerns are also paramount, with terminal operators and vessel crews having to handle potentially toxic or highly explosive alternative fuels.
However, methanol is considered easier and safer to handle than LNG and ammonia primarily due to its liquid state at ambient conditions and lower infrastructure requirements.
Expanding shipyard capacity is essential as the demand for green ships accelerates, stated Allianz in its recent Safety and Shipping Review 2024. Currently, this capacity is constrained, leading to long waiting times and high building costs. The global shipbuilding industry, which peaked at constructing 2,700 vessels annually in 2010, now faces a significant shortfall, needing to build or refit over 3,500 ships annually until 2050, Allianz predicted. Moreover, the number of operational shipyards has more than halved between 2007 and 2022, exacerbating delays and costs. Capacity constraints could also impact repairs and maintenance, with damaged vessels or those with machinery issues potentially facing prolonged delays.
Ammonia and LNF: Risks of Fire and Explosion
Alternative fuels also create new challenges for shipping, such as maritime rescue and wreck removal. If a large container ship or tanker powered by LNG or ammonia were to run aground or capsize, the risk of fire and explosion would complicate efforts to remove fuel and refloat the vessel, Allianz report warned. Among renewable fuels, methanol is considered easier and safer to handle than LNG and ammonia, mainly due to its liquid state and lower infrastructure requirements.
At the same time, the number of vessels operating in Arctic waters continues to grow. The Arctic environment increases risks to vessels, crews and the environment. Harsh conditions, sea ice, dangerous weather and the remote location of the region limit the availability of infrastructure in case of emergencies.
The shipping industry needs swift and coordinated action to expand shipbuilding capacity and develop sustainable marine technologies, Allianz argues. The future of the sector depends on the ability to innovate and adapt in the face of unprecedented challenges.
Methanol vs. LNG and Ammonia: A Safety Comparison
Methanol
Toxicity: Methanol is highly toxic if ingested, inhaled, or absorbed through the skin, posing significant health risks.
Flammability: Methanol has a low flashpoint, making it highly flammable, but its explosion range is lower compared to other fuels like hydrogen.
Handling: Methanol is easier to store, and handle compared to LNG because it remains liquid at ambient temperatures and pressures, reducing the complexity of fuel systems onboard ships.
LNG
Toxicity: LNG is non-toxic and does not pose the same health risks as methanol or ammonia.
Flammability: LNG is highly flammable, and leaks can create explosive atmospheres, particularly in confined spaces.
Handling: LNG requires cryogenic storage at very low temperatures, which complicates its handling and infrastructure requirements.
Ammonia
Toxicity: Ammonia is highly toxic and can cause severe health problems upon exposure.
Flammability: Ammonia is less flammable than methanol and LNG, but its combustion can produce NOx emissions, which are harmful pollutants.
Handling: While ammonia does not require cryogenic storage, it requires special handling and storage measures due to its toxicity and corrosive nature.
Read more:
Allianz Safety and Shipping Review 2024
https://commercial.allianz.com/news-and-insights/reports/shipping-safety.html#download
European Council: FuelEU maritime initiative: Council adopts new law to decarbonise the maritime sector
https://www.consilium.europa.eu/en/press/press-releases/2023/07/25/fueleu-maritime-initiative-council-adopts-new-law-to-decarbonise-the-maritime-sector/
ABS: SUSTAINABILITY WHITEPAPER METHANOL AS MARINE FUEL
https://nps.edu/documents/114698888/117858780/ABS_Methanol-as-Marine-Fuel+%282021%29.pdf/01f7e112-7176-3f79-eec7-d74516f2ad26?t=1680217344499#:~:text=URL%3A%20https%3A%2F%2Fnps.edu%2Fdocuments%2F114698888%2F117858780%2FABS_Methanol
Decarbonization of Maritime Transport: Investigation and Examination of LNG, Methanol, and Ammonia Usage on Marine Vessels
https://link.springer.com/chapter/10.1007/978-981-99-1677-1_5
Atmosphere: A Prompt Decarbonization Pathway for Shipping: Green Hydrogen, Ammonia, and Methanol Production and Utilization in Marine Engines