DNV GL vs ABS: The discrepancy about the marine fuels of ...

It is only a chart but what type of chart—A decisive one! The projection of marine fuel consumption up to 2050! IMO 2020 seemed so big but ... Source:MaxPixels. Itisonlyachartbutwhattypeofchart—Adecisiveone!Theprojectionofmarinefuelconsumption upto2050!IMO2020seemedsobigbutitwasalmostnothingcomparedtoit.TheCOVID-19issotraumaticnow,butevenincludingthedeeprecessionthatiscausing,itwillnotcomparetoitinthelongtermeither.By"it"Iamreferringtothegreatestchallengeoftheshippingindustryforthedecadestocome:Thedecarbonizationofthesectoror,inotherwords,thefullreplacementoffossilfuelsasmarinefuelsforcarbon-neutralones,fuelsthatcurrentlyarejustintheirinfancy.Howcoulditbethattwoofthetopclassificationsocieties,DetNorskeVeritas(DNVGL)andTheAmericanBureauofShipping(ABS),haveforecastedsuchdifferentresultsfortheconsumptionofmarinefuelsforthenextdecades?DNVGLreleasedin2018itsprojectionupto2050inthedocument"MaritimeForecast"whichwaspartofits"EnergyTransitionOutlook,"(projectionsthattheyupdateyearly).DespiteIdonotliketheresultsbecausetheystillshowalargeuseoffossilfuelsbytheyear2050,Ifindsuchachartveryrealisticunderthescenarioofamoderateefforttodecarbonizethesector;byamoderateeffortIrefertotheIMO´sproposal:"InitialIMOStrategyonReductionofGHGemissionsfromShips."Hence,IdonotliketheresultsbutIlikesomuchthecharttothepointthatIhaveuseditinseveraltalksIhavehadinshippingconferences(inthe"oldgooddays"whenthoseconferenceswerefeasible)andevenrequestedpermission toDNVGLtoincludeitinmybook"IMO2020:ARegulatoryTsunami."ThechartcapturesthegradualandirreversiblerolethatLNGwillplayasamarinefuel:Growingeveryyearattheexpenseofoil,andagreatdifficultyforthenewcleanfuelsofthefuturetogainmarketshare.ThiswillhappeniftheIMOdoesnotreceivemuchstrongerpressurebytheEuropeanUnionandtheUS(underaDemocraticadministration,ofcourse)tospeedtheprocessofdecarbonization.Inthelastchapterofmybook,IdealwiththethreatthatLNGwillmountagainstthenewcarbon-neutralmarinefuelsofthefuture. ABSreleasedthisyearthedocument"PathwaystoSustainableShipping."Theyalsodidaprojectionupto2050formarinefuels.ItagreeswithDNVGLinthefactthatoilwillreduceitsshareasmarinefuel;however,thereisalargediscrepancyabouttheroleofLNG.Forme,theABSforecastunderestimatessignificantlytheroleofthatfuel.Theyseejustamodestincrease,whilethecarbon-neutralfuelswillregisterasignificantincreaseupto2050.Hence,whileDNVGLseesLNGasthemainmarinefuelinthelongtermiftheefforttodecarbonizeismoderate,ABSseesLNGbarelyasathirdplayer(almostamarginalone)inthemixofmarinefuels,basicallyremainingadwarffuelthatneitherthreatensoilnorthecleanfuelsofthefuture.WhydotheseprojectionsforLNGarenotrealistic? Iinviteyoutoreadthelastchapterofmybook,whichyoucaneitherbuyonAmazonordownloadforfreeasPDFfromthefollowinglink:PRMbook.HereIjustdropthemainreasons.First,LNGisincreasinglybecomingthepreferredfuelforagoodnumberofverylargenewbuilds,mainlycontainercarriersandcruises.Second,LNGisalreadyacheapfuel(whatistakingplacewithoilpricesisatemporaryphenomenon)andmaybecomeevencheaperduenotonlytotheextractionofshalegasintheUSandCanadabutalsotothevastreservesthatarebeingdiscoveredindifferentregionsoftheworld.Third,LNGallowsshipownerstocomplywithIMO´sregulationssuchasIMO2020,andevenarguethattheyarereducingtheircarbonemissionsbyabout20%or25%.LNGsupporters,forinstance,aresovocalaboutLNGasacleanfuelthatyoualmostforgetthatitisafossilfuelandthatthemaritimeindustrywillneverreachcarbonneutralitybyusingitbecause80%or75%ofcarbonemissionsisstillplentyofgreenhousegasses.Fourth,theinfrastructureforLNGinkeyportsaroundtheworldhasbeenbuiltduringthelastdecade.Inthecomingyears,muchmoreinfrastructurefornaturalgaswillbedeveloped.Thenewfuelsofthefuture,however,arestillintheirinfancywhichmeansthattheystillneedtopassthroughmanyhurdlesbeforebeingrecognizedasreliablemarinefuels.Forthetimeoneortwoofthemareconsideredacceptableforoceangoingvessels,theywillstillconfrontahugechallenge:almostnoinfrastructureversusalargeinfrastructureforLNG.Fifth,thescenariothatLNGshipswillsuddenlyreplacetherichmethaneLNGwithsometypeofliquifiedbiomethaneorsyntheticmethanemarinefuelisnothingelsethanafantasystory.Aregovernmentsandfossilfuelcompaniesgoingtoleaveunexploitedgiganticreservesofgas?Thelargeranindustryexpands,themoredifficultistoreduceitlater.ThatiswhythescenariobyABSisnotright.Itwillnothappen,takingintoaccountmainlythatindustrializedcountries,eventheEuropeanUnion,havebeensubsidizingtheinfrastructureforLNGasamarinefuel.Andevenundertheassumptionthatgovernmentschangegearsandtakeastrongerroleagainstfossilfuels,thechartwouldlookdifferentatthechartbyABS:TheshareofLNGwillnotbesmallin2050becauseeachyearitwillbetakensharefromoil(withthecurrentexceptionofthisyearandthenextoneduetothecollapseofoilprices,ofcourse)verymuchasDNVGLpredictsor,inotherwords,in2050LNGwillbeeitherthelargestmarinefuelinthemarketorthesecondone,butnotinafartherthirdrankasABSisprojecting.(Howcouldweincreasetheshareofcarbon-neutralfuels?Well,inthisarticleIwantedtocommentonthetwodifferentprojections.Theanswertothatquestion,youwillfindinthelastchapterofmybook.)  68 8Comments Like Comment Share VincentSwinkels DirkCRoukema Like Signintolikethiscomment Reply Signintoreplytothiscomment 1y Reportthiscomment ZachHughbanks Agreethatnaturalgaswillgainmarkershare,ifthecruiseindustrycomesbackstrong.Ifnot,therippleinsomemarketscouldcreateunder-performing(hunkeringassets),whichcouldmaketheprocessbumpy. Ipersonallyseeadifferentspreadthaneitherclasssociety... Like Signintolikethiscomment Reply Signintoreplytothiscomment 2y Reportthiscomment RobertTagg Pablo,Ithinkthedifferencesbetweenthe2018DnV-GLstudyandthe2020ABSstudyastherelatedtoLNGareanindicationoftheincreasedrecognitionoverthepast2yearsthatLNG,consideringmethaneslipatversionsstagesintheproduction,transportation,andshipboardcombustion,willnotbeasimportantinthelongtermdecarbonizationofmarinetransportation.LNGisnowconsideredatransitionfuelonthepathwaytorenewablelow-carbonfuels. Like Signintolikethiscomment Reply Signintoreplytothiscomment 5Likes 2y Reportthiscomment JimWalsh Predictingthefuturebasedontheperformanceofthebiggerisbetterboxship,cruiselineandClassbraintrust???Wherearetheynow?LNG/methaneishowmuchmoredamagingtotheplanetthanCO2asaGHG?LeadershipisusingacombinationofproventechandLNGisshorttermatbestyes? Like Signintolikethiscomment Reply Signintoreplytothiscomment 1Like 2y Reportthiscomment AlexandraGrist Iagreecanonlybeshortterm..i.e.onelifecycleofaship25/30yearsmax.WehavetocontinuetohighlightthisbecausethemoreweasanindustryacceptandcometotermsthatLNGisnotthefinalsolutionthemorewewillinvesttodayinthegenuinezero-emissionfuelsorpropulsionofthefutureandbereadyfor2050 Like Signintolikethiscomment Reply Signintoreplytothiscomment 3Likes 2y Reportthiscomment PeterMcBeathMBAFIBCFCMIFIOD ImprovingrouteefficiencieslikecomingtoUKinsteadofEUforraildistributionoffersgreatsavingstoshippingandoffersmuchgreaterspeedofdeliveryandsecurityofgoodsthatcanbetrackedinreal-time!Iamdevelopingthisplan. 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