Although none of the ZEVs are estimated to be more competitive than conventional shipping by 2030, the technology options are evolving rapidly and it is possible that over the next 10 years the gap could reduce even further than this study estimates. If this gap does not close then there may be a need for regulatory intervention in the near future, to drive the viability compared to conventional fossil fuels.

The new report assesses seven technology options for ZEVs, applied to five different case-study ship-types (bulk carrier, containership, tanker, cruise and RoPax) across three different regulatory and economic scenarios. These options consist of various combinations of battery, synthetic fuels and biofuel for the onboard storage of energy, coupled with either a fuel cell (ammonia or hydrogen) and motor, internal combustion engine; or a motor for the conversion of that energy store into the mechanical and electrical energy required for propulsion and auxiliary services.

All analyses are performed against a heavy fuel oil (HFO) reference ship. This is assumed to run on HFO with a two-stroke engine and a scrubber on board to ensure compliance with sulfur emissions regulations.

The costs of some of the components considered—fuel cells, batteries and hydrogen storage—could all reduce significantly, especially if they become important components of another sector’s decarbonization, or if action taken during shipping’s transition assists with the technology’s development.

Relative profitability of ZEV technologies aggregated for all ship types and scenarios. Click to enlarge.

For those in shipping with niche access to a low-cost supply of zero-emission fuel or energy sources, or an ability to pass on a voyage cost premium to a supply chain that values zero-emission services, the gap may already be closed.

From preliminary conversations with shipowners, it was clear to the authors that the key considerations would be around wanting options that were viable at a moderate carbon price (e.g. $50/tonne CO₂) and without too great an increase to the capital cost of the ship. It was also clear that the impact of the CO₂ emissions must not just be moved upstream, to the electricity generation or fuel production process.

Among the conclusions of the study were:

• Advanced biofuels appear the most attractive ZEV solution currently available. They consistently outperform their zero-emission competitors economically due to their low capital cost implications for machinery and storage, and low fuel and voyage costs.

• Battery technology is simply not competitive for trans-oceanic applications and still requires significant further evolution in terms of performance and cost reduction before it could be preferable to synthetic fuel options, unlike for some of the smaller ferries travelling very short distances.

• In terms of competitiveness, the middle ground is synthetic fuels: hydrogen and ammonia.

None of the zero-emission options in their current specifications completely satisfy the shipowner requirements; the most significant gap identified was the voyage (fuel) costs.

There is no doubt that decarbonization is a huge challenge for our sector and that we all have a clear responsibility to ensure actions are taken to drive our operational emissions to zero at a pace matching actions taken across the rest of the world and other industry sectors. By assessing different decarbonization options for different ship types, we identify the drivers that need to be in place to make them a competitive solution and we aim to show the opportunity for a successful and low-cost decarbonization pathway for shipping.

—Katharine Palmer, LR’s Global Sustainability Manager

Zero Emission Vessels 2030 is the latest in LR’s series of reports looking at fuel and technology trends for the marine industry, aimed at developing new knowledge and tools that can contribute to policy debate. Previous reports include Global Marine Trends 2030, Global Marine Fuel Trends 2030 and Global Marine Technology Trends 2030 and Low Carbon Pathways 2050.