INTERVIEW: Shell Sees Range of Hydrogen-Based Fuels Emerging But Fossil Bunker Demand Persisting to 2040s

Ebbinhaus is general manager for decarbonisation at Shell Marine. Image Credit: Alexandra Ebbinghaus / LinkedIn

Global energy producer Shell is seeing 'a mosaic of different fuels' emerging for shipping's energy mix, and the company is seeking to play a role in a range of alternative bunker markets.

At present the company has conventional bunkers, liquid biofuels, LNG and bio-LNG available for its customers. But the company sees a range of other options starting to become available, albeit each with its own advantages and disadvantages, Dr Alexandra Ebbinghaus, general manager for decarbonisation at Shell Marine, said in an interview with Ship & Bunker.

"There's a mosaic of different fuels coming up which are based on hydrogen," Ebbinghaus said.

"You have the synthetic fuels -- the synthetic methane and methanol, and then of course ammonia and hydrogen itself.

"When we look at those, each is disadvantaged against the fuel oil from the availability, cost and performance point of view.

"I think the main difference is that for a synthetic methane or methanol, the engine technology, the vessel technology and the infrastructure exists to put those into the vessel.

"At the moment we see a lot of options, and the need to do much more work to realise these options into actual opportunities."

Conventional Bunkers

But despite all of the alternatives emerging in the marine fuels market, Shell still sees a market -- albeit a diminishing one -- for conventional bunkers for decades to come, Ebbinghaus added.

"You'll still see demand for fossil fuels in the 2030s and 2040s," she said.

"What we hope is that in order to meet our ambition of meeting climate goals, the switch happens quite quickly from the 2030s onwards."

Biofuels

Liquid biofuel demand remains restrained at present, Ebbinghaus said.

"[Biofuel] demand is very much dependent on the pricing," she said.

"If you can offer things at a lower cost, you could sell a million tonnes a year; if you don't, it goes down to tens of thousands of tonnes.

"It's relatively low at the moment, more in the tens of thousands of tonnes than the hundreds of thousands."

Rotterdam saw a total of about 250,000 mt of bio-fuel oil blend sales last year and about 50,000 mt of bio-distillate blend sales. The port authority does not publish data showing what the biofuel content of these blends was.

LNG

LNG is for now the dominant alternative bunker market, with 604,000 mt of sales at Rotterdam last year and 50,000 mt in Singapore.

"We like to say that LNG is a fuel in transition," Ebbinghaus said.

"Today, it's the lowest-emissions fuel you can buy which is mature.

"The criticism for LNG is methane slip, in the upstream where you get the natural gas from and on board from the engine. Work is ongoing on both."

This research and development work on methane slip could reduce the problem significantly over the next decade, she added.

"The major oil and gas companies have put the target forward to eliminate methane slip upstream by 2030," Ebbinghaus said.

"Engine manufacturers are working at reducing methane slip from new engines.

"So the downside of LNG in this regard is going to reduce over time, and hopefully be eliminated by 2030 or from 2030 onward.

"Then if you look at the performance of a synthetic LNG, it can approach or be net-zero."

The firm has recently carried out a bio-LNG trial, and is planning more later this year.

Ammonia

Shell sees ammonia as a good possibility in the marine space. but sees significant challenges in the short term, Ebbinghaus said.

"Ammonia production is lower-cost; you just have to get your green electricity," she said.

"But the use of ammonia on the vessel is completely unproven.

"We don't have an engine which runs on ammonia, we don't know what the engine efficiency is, we don't know what exhaust gas treatment you need to address the NOx and N2O emissions, we do not know the safety constraints.

"The promise of ammonia is really that you have lower costs than the synthetic carbon fuels for the fuel manufacturing, but you do not know what the vessel costs are going to be.

"Ammonia, for us, has much more of a big question mark associated with it; it may not happen, but if it happens it has a good possibility."

Methanol

The firm sees stronger prospects for methanol in the short term once green forms of the product become available at scale.

"On the methanol side, you are starting to see some small elements of demand coming out, and supply agreements," Ebbinghaus said.

"Shell is definitely looking at the opportunity space for methanol.

"The disadvantage of methanol versus LNG is that all production is fossil-based for both, but the fossil LNG on a well-to-wake basis still has the opportunity to reduce the emissions by up to 23%, whereas fossil methanol is actually worse than fuel oil on a well-to-wake performance."