The choice of dual-fuel engines in the maritime industry can have a significant impact on fuel supply pathways by 2050. Dual-fuel engines allow ship owners to switch between conventional fuels and new fuels based on economic changes and regulations. Studies indicate that the competitiveness of fuels will be a key factor in the final consumption of ships.
The Impact of Carbon Prices on Fuel Consumption
The model presented in this study examines various scenarios. In the baseline scenario, maintaining the Tier-2 penalty under the IMO carbon neutralization framework at $380 per ton of carbon dioxide equivalent (tCO2e) by 2050, methanol dual-fuel engines will account for nearly 10 percent of the fleet's engine capacity, while methanol alone constitutes only 2 percent of the fleet's energy consumption. In this situation, conventional fuels remain more economically viable.
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However, if the global carbon price rises to $700 per ton of tCO2e, this equation will change. In this case, the use of new fuels including methanol and ammonia will reach about 61 percent of the global fleet's energy consumption.
Production Costs and Fuel Competitiveness
Research shows that the overall costs of using electrolytic methanol and electrolytic ammonia are nearly equal. While the cost advantage of producing electrolytic ammonia is affected by high logistics costs and the need for specialized crew training, these costs can significantly impact the competitiveness of fuels.
This study also identifies four key uncertainties that could affect the competitiveness of new fuel pathways. The levelized cost of hydrogen (LCOH) and biogenic CO2 costs are among these influencing factors. If the LCOH decreases to $2 per kilogram of hydrogen by 2050, methanol and ammonia could achieve 36 percent of the global fleet's energy demand.
Ultimately, the future of fueling hubs will be significantly influenced by these changes. Liquid fuels such as methanol and ethanol are easily transferred and refueled, likely enhancing existing fueling hubs. On the other hand, the adoption of ammonia could lead to the formation of new hubs based on access to low-cost fuels and scalability.
According to Lynn Loo, CEO of the Global Center for Marine Carbon Reduction (GCMD), "Many of the ships ordered in the next decade will still be operational by 2050. Therefore, ship owners are making important decisions regarding their engine choices while uncertainties about the future of fuels remain." This statement emphasizes the challenges faced in offsetting the costs of new and traditional fuels in the current geopolitical context.
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