Comparing fuel price and performance on a per-tonne basis
has sufficed for liquid fossil fuels, but as shipowners evaluate new fuels as
part of their decarbonization plans, this method is no longer accurate.
SEA-LNG has identified a number of situations where
misleading information has been disseminated because energy density has been
overlooked when comparing the economic viability of liquid fossil fuels, LNG,
and new fuels such as ammonia, hydrogen and methanol. These inaccurate
comparisons are a legacy of marine fuel oil being historically sold in metric
Energy density is the amount of energy that can be stored in
a given mass of fuel. It can be specified as energy content per unit of mass
(gravimetric energy density) or energy content per unit of volume (volumetric
energy density). Gravimetric energy density is critical when comparing the
operating costs of different fuels - one tonne of LNG bunker fuel releases more
energy during combustion than one tonne of very low sulfur fuel oil (VLSFO),
for example. Volumetric energy density is relevant when making newbuild
investment decisions, as less space needed for high energy density fuel storage
means more space available for cargo.
LNG’s energy cost per tonne is about 16 percent lower than
VLSFO because it contains more energy for a given mass. LNG provides
approximately 46.7 MMBtu (or 13.7 MWh) of energy per metric tonne, whereas
VLSFO provides about 40.2 MMBtu (or 11.8 MWh) per metric tonne. Hence LNG at
$100 per tonne is price neutral against LSFO at $84 per tonne.
It is important to reference credible sources of pricing
information that are adjusted for energy content and regularly updated. For
example, the Platts monthly average bunker price assessments for LNG (available
on the SEA-LNG website) provide a true cost comparison with marine gasoil, LSFO
and heavy fuel oil.
Looking forward, it is important to recognize that when we
see fuel price estimates quoted for ammonia, hydrogen and methanol on a per
tonne basis, then these prices will need to be adjusted for energy density. For
example, one tonne of ammonia contains only 33 percent of the energy of one
tonne of LNG and its zero-emissions cousins, bioLNG and synthetic LNG. For
methanol, the comparable figure is 36 percent, whereas for hydrogen the number
is 216 percent.
LNG has a volumetric energy density advantage compared to
new fuels. Liquid hydrogen, ammonia and methanol have 34 percent, 51 percent
and 63 percent of the volumetric energy density of LNG (respectively). In other
words, it takes about two cubic meters of ammonia to match the energy output of
one cubic meter of LNG. To achieve the same sailing distance, fuel tanks for
liquid hydrogen would need to be at least three times the volume of those for
LNG as a consequence of the large amounts of insulation required. For ammonia,
the tank size ratio is approximately two to one compared with LNG and in the
case of methanol, tank sizes are equivalent. The potential difference in
sailing distance would not be clear if the fuels were simply compared on a
From a ship design perspective, bunker storage tank size
will clearly be an important consideration, as it can impact on cargo carrying
capacity. This can be illustrated by examining the latest CMA CGM 22,000 TEU
ultra-large container vessels. Designed with a 18,600 cubic meter capacity LNG
storage tank, the ships would need a substantially larger, 35,340 cubic meter
capacity fuel tanks if they were to run on ammonia. This equates to
approximately 1,000 TEUs of space for ammonia storage compared to roughly 500
TEUs required for LNG.
Looking ahead to 2050 and beyond, when hydrogen-based fuels
such as synthetic LNG and potentially green ammonia become available from
renewable energy sources, volumetric energy density considerations will remain
critical to emissions calculations, vessel design, deadweight tonnage, cargo
volume and passenger space availability.
This is in addition to the safety and operational challenges faced by
many new marine fuels.
Ship operators, financiers, class societies, terminal
operators and other stakeholders therefore need to change their mindset now and
think about fuel in terms of its energy per unit volume, rather than just in
terms of its weight or volume. The industry needs to understand and standardize
methodologies so that fuel comparisons are made from a level baseline.
Misunderstandings will come at a cost – not only for individual businesses but
for the maritime industry’s sustainability efforts as a whole.