Study: LNG and methanol 'dead ends' in shipping's decarbonisation

New research argues that shipping industry investment in ’transitional fuels’ such as LNG and methanol could delay future maritime use of ammonia as a fuel unless vessels and infrastructure are designed for credible conversion.

Green ammonia, produced exclusively with renewable energy, is positioned in the research as the maritime sector’s ’main scalable zero-emission shipping fuel’.

In, When is a stepping stone a dead-end? Insights into ‘stepping stone’ pathways from the maritime shipping transition, an academic paper from University College London’s (UCL) Energy Institute, researchers found that shipping’s favoured transitional fuels do not automatically help the sector reach a future scenario that sees maritime moving largely to ammonia as a marine fuel. 

Instead, the authors say the industry risks taking costly detours in using LNG and methanol as marine fuels, unless work is done to design and build assets, skills or policies to genuinely support a future shift to ammonia.

In their research, UCL Energy Institute’s Pinar Langer, Will McDowall, Marie Fricaudet, Nishatabbas Rehmatulla and Tristan Smith examined whether LNG and methanol can act as ’stepping stones’ to ammonia as a fuel in shipping.

They said the paper develops “an analytic framework for thinking about stepping stone pathways” and applies the framework through four categories - material and financial resources, technological knowledge and capabilities, institutions, and expectations and narratives.

The authors state their conclusion as: “We find that neither [LNG nor methanol] offer direct stepping stones.”

They add that LNG “has the potential to provide a stepping stone pathway, but only if more-stringent policies drive the uptake of truly ‘ammonia ready’ LNG infrastructure.”

LNG as a stepping stone to ammonia: some overlap, added cost, risk

In its look at LNG as a stepping stone, the paper notes that the fuel can create useful knowledge and design links for ammonia, around cryogenic handling, fuel preparation, tank design and regulatory learning.

Patent analysis cited in the paper also points to a technology overlap between LNG and ammonia, including gas storage, propulsion systems and boil-off management.

Still, the study authors argue that the crossover advantages for LNG and ammonia systems depend heavily on what “ammonia ready” means in practice.

Many LNG assets, the authors note, are marketed as a bridge while not being designed in ways that make later conversion straightforward.

The authors note that “very few ‘ammonia-ready’ ships actually meet the high readiness standard required to achieve the savings associated with readiness”, adding that formal readiness notations are often little more than “a drawing on paper”.

Looking at cost comparisons, the paper says an LNG dual-fuel route to ammonia for a 14,000 TEU containership implies an initial additional investment of US$40M at newbuild, followed by US$15M to US$30M for retrofit if the vessel was built as ’ammonia-ready’ with features such as piping, cabling and ventilation already in place.

Even then, the paper says retrofit economics remain difficult.

The authors also warn that use of transition fuels comes with a risk of narratives that could slow any transition to lower-carbon and zero-carbon fuels, as well as the threat of investment lock-in for assets.