The right choice of alternative fuels? (Biofuels)

• Main Author: Suen, Daniel Hung Cheung
• Other Authors: Chiu Sai Hoi, Benson
• Format: Final Year Project
• Language: English
• Published: Nanyang Technological University 2023
• Subjects: Engineering::Civil engineering
• Online Access: https://hdl.handle.net/10356/172600
• Institution: Nanyang Technological University

This project attempts to identify if there is a ‘right’ choice of alternative fuel in the shipping industry through quantitative and qualitative research methods, such as an online survey of 50 respondents and 3 interviews with industry practitioners from various ship owning and chartering firms. In my area of study, I will be assessing on biofuel’s feasibility as the ‘right’ choice of fuel, whereas my teammates, Khairul will be assessing on methanol, and Wei Kiat on ammonia likewise. Based on identifying the key considerations for shipowners by studies such as environmental benefits, and economic factors such as vessel adaptation, and availability and production, we have narrowed the scope using the PESTLE method for only the economic and environmental factors. Common biofuels include Fatty Acid Methyl Ester (FAME), Biomass to Liquid (BTL) and Hydrogenated Vegetable Oil (HVO). The environmental benefits for biofuels in the literature review findings include biodegradability in the event of fuel spills, lower toxicity than fossil fuels, reduced sulfate aerosol concentration emissions, while some potential cons include higher sludge forming in the purifier. For economic factors, fuel prices such as higher cost for biofuels than fossil fuels, ‘drop-in’ ability of biofuels which allows no retrofitting needed hence zero capital expenditure for shipowners, and capital expenditure for building biofuel storage and distribution facilities. Also, for operational expenditure, higher manpower and sludge disposal cost for maintaining engines due to the sludge increase, and lastly economies of scale in biofuel production. The general observed finding is that methanol is the overall most likely to be chosen, followed by ammonia and lastly biofuels. Biofuels were examined to be the lowest cost of the three, as there is no expensive engine retrofitting required, and its ability to blend with fossil fuels, should constitute it as the more economically viable option of the three alternative fuels. However, other economic factors such scalability and availability might have weighed it down in the survey analysis. We examine that the greatest challenged faced by biofuels is the availability and scalability, which is also an issue for the other fuels, as well as biofuel usage causing excess sludge in the purifier and damaging of the ship’s engines, as identified in the literature review research section and by the interviewees. Biofuel costs were discussed as a point for consideration and hedging bunker prices are important for carriers, by using hedging tools such as swaps due to the volatility of biofuel cost. For ammonia, Wei Kiat’s research narrowed toxicity to be the main issue and that as an alternative fuel, it is still in its development phase. Ammonia is the only one of three researched fuels that produces no carbon when burned. For methanol, Khairul’s research describes how scalability and availability is the main drawback, however, it’s easier to achieve than biofuel and ammonia as it is traded more widely. It is also highly flammable which constitutes higher safety risk. Retrofitting expense is high for both methanol and ammonia, which are found to be similar in cost. Lastly, this paper explores possible recommendations to tackle these challenges, such as, higher government fiscal policies and aid, and a joint taskforce with various stakeholders to research and test biofuel feasibility conjointly.