Compliance Options

Option 1 – Burn Distillates

Marine fuels are categorised as being either a distillate or a residual.

Distillates are the lighter grade fuels from the refining process. Residuals are the heavy factions from the refinery. The most common distillate fuels are marine gas oil (MGO) and marine diesel oil (MDO), more properly known as DMA and DMB respectively.

Advantages

• No major vessel modifications or capex (capital expenditure) needed – usually limited to minor system modification and bunker tank cleaning
• Relatively simple changeover process between 0.50% (VLSMGO) and 0.10% (ULSMGO) when transiting ECAs
• Cleaner fuel – reduced maintenance demands and reduced risk of engine failure

Disadvantages

• More expensive in comparison with high sulphur residuals
• Uncertainties on availability in every port
• Potential problems with low temperature flow characteristics of some distillates
• Reports of flashpoints below 60°C, which is the minimum temperature required under SOLAS

Option 2 – Burn Hybrids or Blends

Early experiences suggest that the shipping industry has adapted well to the switch to the new very-low-sulphur fuel oil (VLSFO) products, but the huge variability in their characteristics has brought issues.

Advantages

• No major modifications or capex needed – usually limited to minor system modification and bunker tank cleaning
• Usually cheaper than distillate fuels

Disadvantages

• Uncertainties on availability in every port
• Some heavier blends may contain cat fines
• Many VLSFO products are blends of different components. If there is a mixture of aromatic and paraffinic blend components, it increases the risk of instability.
• There are reported cases where the VLSFO product met ISO 8217 specification limits for TSP at time of bunkering subsequently became unstable within a matter of weeks
• Higher risk of incompatibility
• VLSFOs with a high paraffinic content are more vulnerable to wax formation if the temperature drops below a certain point.
• We have seen an increase in reported engine liner wear that may be related to the cylinder oil used
• VPS has recently issued several bunker alerts where flashpoints have been below 60°C, which is the minimum temperature required under SOLAS

Option 3 – Install EGCS

Exhaust Gas Cleaning Systems (EGCS) are commonly referred to as scrubbers. These systems effectively wash the exhaust gas to remove sulphur dioxides and particulate matter. Vessels operating an EGCS can continue to legally burn fuels with a sulphur content of greater than 0.50%.

There are 3 different categories of EGCS:

Open loop systems

• Water is taken from the sea and pumped into the scrubber wash tower.
• The natural alkalinity in seawater means it does not need chemicals to be added prior to scrubbing.
• This method can be used in most seas around the world where alkalinity levels are high.
• The effluent is then treated and discharged back to sea.

Closed loop systems:

• Seawater or freshwater is treated with an alkaline chemical before entering the wash tower to scrub the exhaust gases.
• Wash water is re-circulated, and any losses made up with additional water.
• A small amount of the wash water is bled-off to a treatment plant before discharge to sea, or they can be run in ‘zero discharge’ mode where the effluent is held in a tank and later disposed ashore

Hybrid systems:

• can operate in either open or closed loop mode.
• Depending on design, they may operate with either freshwater or seawater when in closed loop mode.

Advantages

• Moderate capex (US$3-5m) with expected payback period to be reasonably short
• Expected low fuel costs – the difference in price between high sulphur residuals and compliant MGO was expected to increase significantly in 2020, but this impacted by the COVID-19 pandemic

Disadvantages

• Systems and equipment require lot of space
• High power demands resulting in 3-5% fuel penalty
• If not installed and maintained to a good standard, there are concerns on reliability which could result in transitory non-compliance
• The long-term viability of EGCS could be impacted by any future legislation on effluent discharge standards
• The future availability of high sulphur fuel is uncertain and there are concerns that some refineries could divert supplies elsewhere if not profitable
• Installation time could be several weeks and requires several months prior planning

Option 4 – Burn LNG

LNG is a particularly attractive fuel from an environmental point of view because it emits zero SOx and virtually zero particulate matter.

LNG is natural gas – predominantly methane (CH4) – in liquid form. Exact composition depends on source and generally contains a mix of heavier hydrocarbons, CO₂, water and nitrogen.

To make storage and handling manageable, it is condensed into a liquid at close to atmospheric pressure by cooling it to approx. -162°C.

Advantages

• Lower fuel cost (but high delivery costs – see below)
• Green credentials

Disadvantages

• High capex with expected long payback period – cost of gas or dual-fuel engines and storage and handling system
• Limited infrastructure of LNG supply might restrict vessel’s trading options
• Bunkering challenges – higher risk operation and strictly controlled
• Delivery costs push up the real cost of fuel
• Lower energy density compared with traditional marine fuels – therefore more volume needed
• The global warming potential (GWP) of methane is significantly higher than CO₂
• Large tanks and restrictions on their position can result in loss of cargo carrying capacity
• Crew will require additional training in bunkering, storing and managing LNG

Option 5 – Use Other Alternative Sources

There are a number of alternative fuels or energy sources that are either available or currently in development.

The take-up of these options is low and, where they have been adopted, they are one of several modes used on board – pieces of the multi-fuel jigsaw.

Typical options include:

• Methanol (CH₃OH): Easy to manage and store but main challenges are its low flash point and relatively poor energy density
• Hydrogen fuel cells: Fuel cell systems use an electro-chemical reaction to generate electricity. Strong green credentials but there are concerns on their high cost, size and weight and expected life.
• Liquefied Petroleum Gas (LPG): Composition can vary but consists mainly of propane and butane, propylene and other light hydrocarbons. Similar positives and challenges to that of LNG as a marine fuel.
• Battery: A low maintenance (and arguably low carbon) solution is battery power but the current technology does not meet the needs of an ocean-going vessel.