Can LNG be replaced with Liquid Bio-Methane (LBM) in shipping?
As per today (2021), in total some 500 TWh bunker fuel is consumed within the shipping sector annually within EU waters and approximately 25 TWh of this (5%) is LNG (Liquefied natural gas). The fleet of LNG fuelled vessels has grown steadily since the first vessels were introduced around year 2000. Predictions and scenarios indicate that in a couple of years, it is likely that around 15 % of all bunker fuels consumed in shipping will be LNG.Through detailed analyses of present and planned production capacity combined with scenarios built for future potential bio- and electro-methane production, a possibility to replace large amounts of LNG in shipping can be seen from a Swedish perspective.
In total, the analysis shows a maximum scenario for LBM production (Liquefied Bio Methane) in Sweden year 2045 of nearly 30 TWh annually. This potential includes electro-methane production based on carbon dioxide that is naturally formed during the biogas digestion production process. All production, of methane being assessed as potential, is assessed to be based on sustainable sub¬strates and sustainably produced.This report shows that it could be possible to replace fossil LNG as a fuel in shipping with renewa¬ble LBM at a large scale from a Swedish perspective. The total bunkering of ships in Sweden are around 25 TWh per year, varies over time, and is dependant not only on which ships that calls Swe¬dish ports but also with the market competition with bunker suppliers in other countries. Should 15% of that fuel be LNG, it would be some 4 TWh LNG that could be interesting to switch towards renewable LBM.
The potential shift in shipping in Sweden from LNG to LBM at a level of 4-6 TWh is assessed to be a realistic potential, but the shift will not happen unless the society gives the industry incentives that supports that shift and clearly shows the involved stakeholders that there is a long-term strat¬egy to enhance renewable methane production and consumption. It is especially important that pol¬icy instrument in the shipping sector is introduced that connects greenhouse gas emissions with a cost that can be avoided if fuels with low or zero emissions being used.Today, only a small proportion of bio-methane is liquefied to LBM in Sweden, while most of the planned production facilities for biogas will be for LBM, thanks to subsidies in the form of invest¬ment support and the decreased demand of CBG that benefits LBM.This report has chosen to use the expression Liquid Bio-Methane (LBM) due to the fact that the ex¬pression often used Liquid Bio Gas (LBG) does not cover the important part of the methane pro¬duced as an electrofuel based on carbon dioxide from the digestion process and also not really in¬cludes the methanation of syngas from gasification plants.A Swedish production support in combination with the introduction of shipping within the EU emission trading scheme (ETS) seems too possibly even out the cost difference between LNG and LBG as a marine fuel or at least give a significantly smaller barrier to overcome.To establish the environmental rationale of this product, life cycle assessments of the production of LBM and the use in the shipping sector were performed. No previous scientific studies have been identified which look into the performance of using electrofuel pathways of LBM in the shipping sector. The results are presented in the report together with an analysis of potential future issues to observe.