Fuel Production Cost Estimates and Assumptions.: This Is Part of Zero-Emission Vessels: Transition Pathways

Fuel production
cost estimates
and assumptions.
This is part of Zero-Emission Vessels:
Transition Pathways.
Contents
Executive summary Gas oil production pathways
Gas oil production
Hydrogen production pathways
Gas oil production emissions
Hydrogen production
Gas oil production cost estimates
Hydrogen production emissions
Hydrogen production cost estimates Electricity production pathways
Electricity production
Ammonia production pathways
Electricity production cost estimates
Ammonia production
Ammonia production emissions References and bibliography
Ammonia production cost estimates
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EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

EX E CU T IVE S UM M A RY
Zero-carbon fuel
production summary.
Decarbonising shipping is strongly linked to the evolution technology discounting and transportation. These are
of zero-carbon fuel production and supply. So, in order shown in Figure 2 as a comparison to reference cases of
to understand the conditions necessary for shipping's fossil-based fuels which are used today. A breakdown of
transition to zero-carbon, we need to consider how these cost estimates for the renewable electricity-derived
production and transportation. We have considered a range (electro-fuel) options are also included in Figures 3 – 9,
of possible pathways as presented in Figure 1, which are in which an itemisation of the production cost has been
composed of fuel production, transportation, bunkering undertaken in accordance with the specific process
and vessel storage. requirements.
These potential pathways consider hydrogen, ammonia, We used these cost estimates as a proxy for future fuel
methanol, gas oil and electricity as the final energy carriers prices in our reference scenario. However, in the sensitivity
on board ships. The primary energy sources considered to scenarios, we considered a wider range (upper and lower
produce these include: natural gas with capture and storage bound) from the estimated value in order to Identify the
(CCS) for hydrogen and ammonia, biomass for methanol milestones (break-even point (BEP)) in the transition
and gas oil and renewable electricity for hydrogen, pathways report.
ammonia, e-methanol, e-gasoil, electricity with batteries.
We do not want to address shipping’s decarbonisation
This report provides supporting data and details by shifting the problem upstream, so emissions from
assumptions in relation to the fuels used in the Zero- production and distribution need to be considered. The
Emission Vessels: Transition Pathways report. In particular, emissions attributable to the production and transportation
we analysed potential costs and emissions associated with where necessary are also provided below in Figures 9 – 14
the fuels considered in this study. They are assumed to be for Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide
the potential future marine fuels in a decarbonised system. (N2O), Oxides of Nitrogen (NOx), Oxides of Sulphur (SOx)
and particulate matter (PM).
Cost estimates are considered in relation to these
production processes and composed of primary energy
sources, production plant type, emissions abatement,

( CONT INUE D )
Fuel production
Hydrogen Transportation Vessel storage
Hydrogen Hydrogen
Water Local battery
Renewable compression liquefaction Battery storage
storage
electricity plant and storage plant and storage
Electrolysis
Transportation
Haber-bosch Storage as a
as a cryogenic
process cryogenic liquid
liquid
Bunkering
Natural gas Synthesis gas Reverse water gas
Transportation as
shift reaction Storage as a
Water-gas shift a refrigerated
(carbon source refrigerated liquid
Steam reaction and liquid No conversion
Natural gas required)
reformation carbon capture
and storage
Methanol Ammonia Transportation Storage as a
Methanol as a liquid liquid
Biomass synthesis
process Ammonia
Methanol
refrigeration
storage
plant and storage
Biomass Gasification
Fischer-tropsch
process
Gas oil
Gas oil storage
Figure 1 - Pathways diagram

( CONT INUE D )
Zero-carbon production cost estimates 0 50 Cost ($/MWh) 100 150 200 250
Electricity Battery storage of renewable electricity
Gas oil from renewable electricity (e-gas oil)
Gas oil Gas oil from biomass (bio-gas oil)
Methanol from renewable electricity (e-methanol)
Methanol Methanol from biomass (bio-methanol)
Ammonia from renewable electricity (e-NH3)
Ammonia from natural gas with carbon capture and storage (NG-NH3)
Ammonia Ammonia from natural gas (NG-NH3)
Hydrogen from renewable electricity (compression storage) (e-H2)
Hydrogen from renewable electricity (liquefaction storage) (e-H2)
Hydrogen from natural gas with carbon capture and storage (NG-H2)
Hydrogen Hydrogen from natural gas (NG-H2)
Liquified natural gas (LNG)
Low sulphur heavy fuel oil (LSHFO)
Marine diesel oil (MDO) 2030

2040
Fossil Fuels Heavy fuel oil (HFO)
2050
Figure 2 - Fuel production cost estimates

( CONT INUE D )
Figure 3 - Hydrogen production from renewable Figure 4 - Hydrogen production from renewable Figure 5 - Ammonia from renewable
electricity (liquefaction storage) cost breakdown electricity (compression storage) cost breakdown electricity cost breakdown
82% Primary energy 97% Primary energy

6% Maintenance 1% Maintenance 96% Primary energy
<1% Treatment <1% Treatment 1% Maintenance
1% Electrolysers 2% Electrolysers <1% Treatment
<1% Liquefaction <1% Liquefaction 1% Electrolysers
11% Storage <1% Storage <1% Air separation
<1% Compression 2% Storage
<1% Haber-bosch
<1% Refrigeration
Figure 6 - Methanol from renewable electricity Figure 7- Gas oil from renewable electricity Figure 8 - Renewable electricity storage
cost breakdown
45% Primary energy 46% Primary energy 9% Primary energy

13% Maintenance 12% Maintenance 31% Maintenance
0% Treatment 0% Treatment 52% Battery storage
27% Electrolysers 27% Electrolysers 6% Transmission
1% Carbon capture 1% Carbon capture 2% Conversion
0% Storage <1% Storage
14% MeOH synthesis 14% Fischer-tropsch

( CONT INUE D )
Net emissions per tonne of fuel produced and consumed
Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)

3.36 3.42 3.42 10.73 0.20 2.49 0.20 0.00 -0.58 0.00 0.21 3.25 3.67 3.25 66.26 0.00 11.85 0.01 0.32 0.84 0.04 0.00 0.16 0.15 0.17 0.04 1.25 0.01 0.01 0.53 0.01 1.32 1.26
100% 100% 100%
Tonnes of emissions / tonne of fuel
90% 90%
80%
kg of emissions / tonne of fuel

80% 80%
60%
70% 70%
40%
60% 60%
20% 50% 50%
0% 40% 40%
30% 30%
-20%
20% 20%
-40%
10% 10%
-60% 0% 0%
O
DO
FO
H2
H3
ol
ol
oi
oi
-H
NH
DO
FO
H2
H3
ol
ol
DO
FO
H2
H3
ol
ol
HF
an
an
oi
oi
oi
oi
-H
NH
-H
NH
e-
-N
H
HF
HF
M
NG
an
an
an
an
e-
-N
e-
-N
e-
ga
ga
H
LS
s
M
M
NG
NG
NG
e-
e-
ga
ga
ga
ga
et
et
LS
LS
h
h
NG
NG
o-
e-
et
et
et
et
m
o-
e-
o-
e-
bi
m
o-
e-
bi
bi
CO2 upstream CO2 operational
o-
e-
o-
e-
bi
CH4 upstream CH4 operational N2O upstream N2O operational
bi
bi
Figure 9 - Net carbon dioxide emissions Figure 10 - Net methane emissions Figure 11 - Net nitrous oxide emissions
Oxides of nitrogen (NOx) Oxides of sulphur (SOx) Particulate matter (PM)

93.99 88.33 93.00 13.17 0.01 44.98 44.06 91.63 21.22 87.26 20.12 68.42 3.92 19.00 8.85 0.14 1.91 0.45 2.57 1.04 2.04 0.22 7.35 1.05 4.26 0.76 0.16 0.14 0.17 1.31 0.26 1.13 0.21
100% 100% 100%
90% 90% 90%

80% 80% 80%
70% 70% 70%
60% 60% 60%
50% 50% 50%
40% 40% 40%

30% 30% 30%
20% 20% 20%
10% 10% 10%
0% 0% 0%
DO
H2
H2
H3
ol
ol
O
DO
H2
ol
ol
DO
H2
H2
H3
ol
ol
oi
oi
oi
oi
oi
oi
NH
-H
NH
NH
NH
HF
HF
HF
HF
HF
HF
an
an
an
an
an
an
e-
-N
e-
e-
-N
s
M
s
s
M
NG
NG
NG
e-
ga
ga
-
e-
e-
ga
ga
ga
ga
LS
LS
LS
h
h
NG
NG
NG
et
et
et
et
et
et
o-
e-
o-
e-
o-
e-
m
m
bi
bi
bi
o-
e-
o-
e-
o-
NOx upstream NOx operational SOx upstream SOx operational e- PM upstream PM operational
bi
bi
bi
Figure 12 - Net oxides of nitrogen emissions Figure 13 - Net oxides of sulphur emissions Figure 14 - Net particulate matter emissions

( CONT INUE D )
Zero-carbon fuel production and distribution
Production location Production location

Port of Quintero, Port of Ras Tanura,
Chile, South America Saudi Arabia
Rotterdam
21 $/MWh 18 $/MWh
New York
Rotterdam 7465nm Rotterdam 6417nm
Singapore 9985nm Long Beach Gibraltar Port of Ras Tanura, Singapore 3736nm
California Saudi Arabia
Fujairah 9668nm Fujairah 466nm
Fujairah
New York 4643nm New York 8281nm
Long Beach, California 4803nm Long Beach, California 11393nm
Gibraltar 7002nm Gibraltar 5097nm
Singapore
(SeaRoutes 2017) (SeaRoutes 2017)
Port of Quintero,
Chile, South America
Figure 15 - Zero-carbon fuel production and distribution map

HYD RO G E N
Hydrogen production pathways.

Hydrogen production
The hydrogen fuel pathways that are considered i.e. through compression or liquefaction. It has been
within this study are as indicated within Figure 15. assumed that the transportation, bunkering and onboard
The requisite primary energy sources for fuel production storage of the fuel would be undertaken exclusively whilst
in this instance are natural gas or renewable electricity in in a cryogenic liquid state, i.e. at atmospheric pressure and
combination with water, which may undergo conversion low temperature.
to hydrogen through a process of steam reformation and
electrolysis respectively. The cost of hydrogen as a fuel obtained through the
steam reformation of natural gas and the electrolysis of
Although comparable to these hydrogen production water are specified as $1,000-$3,000 and $1,500-$3,000
methods, the conversion of biomass (waste materials) respectively (International Energy Agency, 2017). These
through gasification and water-gas shift reaction has not costs are composed of elements associated with the capital
been included, assuming a restriction of such resources investment requirements of the production facility in
for the derivation of liquid fuels. addition to the fixed and variable operational expenses
that are attributable to the production process.
Two methods for storage of the fuel product following
conversion have been considered, in a state corresponding
to high pressure (700 bar) and atmospheric temperature
or atmospheric pressure and low temperature (-252OC),

HYD RO G E N PRO D UCT IO N
( CONT INUE D )
Fuel production
Natural gas Synthesis gas
Water-gas shift
Steam reaction and
Natural gas
and storage
Hydrogen Transportation Bunkering Vessel storage
Hydrogen Hydrogen Transportation Storage as a

compression liquefaction as a cryogenic No conversion cryogenic
plant and storage plant and storage liquid liquid
Water
Renewable
Electrolysis
Electricity
Figure 16 - Hydrogen production pathway

Steam reformation operational expenses, suggesting that location of the fuel These locations are representative of regions in which there
production facility is of primary importance when sources exists the potential for renewable electricity to be made
HYD RO G E N PRO D UCT IO N In the case of hydrogen production through steam of renewable energy are under consideration (International available at a significantly reduced price by comparison
( CONT INUE D ) reformation, the operational expenses account for the Energy Agency, 2017). Therefore, calculation of the cost to those with dissimilar geographical characteristics
maintenance costs of systems and equipment (fixed), of hydrogen production is necessary to incorporate the (International Energy Agency, 2017). The renewable
the energy requirements of the process (variable) and the location specific price of renewable electricity and thereby electricity prices that have been assumed for these locations
primary energy sources (natural gas) necessary for fuel obtain an appropriate level of representation. within this study are 21 $/MWh for South America and
production (variable). In this instance the price of natural gas 18 $/MWh for the Middle East (IMarEST, 2018).
has greater influence over the variable operational expenses The geographical locations considered within the
than the price of electricity, suggesting that location of the calculations for the cost of hydrogen production through The requisite information and parameters for these
fuel production facility is of minor significance. As such, electrolysis are South America and the Middle East, calculations, concerning the capital expenses of the
an appropriate level of representation for the cost of specifically the port of Quintero (Chile) and the port facility, the maintenance costs of systems and equipment
hydrogen production typically associated with this process of Ras Tanura (Saudi Arabia) respectively. and the energy requirements of the production process,
may be obtained through an average of the figures are included below within Table 1 and Table 2. These
specified previously. These locations are representative of geographical regions parameters correspond to the individual stages of the fuel
in which a moderate renewable electricity generation production process for hydrogen and have been obtained
potential exists, as indicated within Figure 17, ranking from various sources of literature, as indicated within the
Electrolysis
fifth and third respectively in reference to overall global applicable data sources specification.
In the case of hydrogen production through electrolysis, the capacity (International Energy Agency, 2017). In this context,
operational expenses account for the maintenance costs of the development of approximately 1.5% or 1.0% of these As a means of comparison, (Brynolf, et al., 2018) provide a
systems and equipment (fixed) and the energy requirements respective renewable electricity generation potentials variable range of between 20 €/MWh and 37 €/MWh for the
of the fuel production process (variable). In this instance the would be required to accommodate the annual energy average wholesale electricity price of the northern European
price of electricity has a singular influence over the variable consumption of the global shipping fleet, of between region for the period 2015 to 2018.
11 EJ/yr - 12 EJ/yr (Olmer, et al., 2017).

( CONT INUE D )
193 571
EJ/yr EJ/yr
864
EJ/yr 306
EJ/yr
193
1,335 EJ/yr
EJ/yr 464
EJ/yr
761
EJ/yr
1,911
EJ/yr
5,360
EJ/yr
y Sola
erg r
en
io
B
Technical RE potential can supply the 2007

primary energy demand by a factor of:
O ce a n
Wind
0–2.5
Hy 2.6–5.0 20.1–22.5
al
dr rm
o he
G e o-t 5.1–7.5 12.6–15 22.5–25
7.6–10 15.1–17.5 25–50
10–12.5 17.6–20 Over 50

Figure 17 - Global renewable energy potential by geographical region (International Energy Agency, 2017)

( CONT INUE D )
Table 1 - Parameters for renewable electricity hydrogen production - liquefaction storage
Production stage Capital expenditure Operational expenditure Stage efficiency Energy requirements
Pre-treatment 2.23 (€/m3) a 4.3% of Capex a 45% a 3 (kWh/m3) a
Electrolysis 400 (€/kW) b 3% of Capex a 70% b 4.2 - 5.9 (kWh/m3) c
Liquefaction 0.5 - 1.1 (€/kg) d 10.18 (kWh/kg) g

5% of Capex e 77% f
Storage 18 ($/kg) h 0.1% Boil-Off Per Day h
Data Sources: a (Fasihi, et al., 2016); b (International Energy Agency, 2017); c (Schmidt, et al., 2017); d (International Energy Agency, 2014); e (Syed, et al., 1998);
f
(Ni, 2006); g (Gardiner & Satyapal, 2009); h (National Renewable Energy Laboratory, 1998).
Table 2 - Parameters for renewable electricity hydrogen production - compression storage
Compression 0.63 - 1.3 (€/kg) d 2.85 (kWh/kg) f

0.01 - 0.05% of Capex e
94% e
Storage 0.015 (€/kWh) g NaN
Liquefaction 0.5 - 1.1 (€/kg) d 5% of Capex h 77% e 10.18 (kWh/kg) f
Data Sources: a (Fasihi, et al., 2016); b (International Energy Agency, 2017); c (Schmidt, et al., 2017); d (International Energy Agency, 2014);
e
(Ni, 2006); f (Gardiner & Satyapal, 2009); g (Fasihi & Breyer, 2017); h (Syed, et al., 1998).

( CONT INUE D )
Production facility Storage and transportation and low temperature or alternatively in a compressed state
at high pressure and atmospheric temperature.
The calculations for the fuel product costs of hydrogen are The required fuel product storage capacity of the production
based on a production facility with an annual capacity of facility has been assumed to correspond with 10% of the To enable transportation in a liquefied state, direct loading
500,000 tonnes per year. This capacity has been selected overall capacity, i.e. totalling 50,000t, intended for retention of the fuel product onto the vessel is possible for the fuel
in an attempt to capture the potential benefits for capital prior to scheduled transportation to primary bunkering production facility in which liquefaction and hydrogen
expenditure that are associated with production at locations. The locations considered as primary bunker storage in a liquefied state is undertaken. However, for
an increased volume; i.e. ‘economies of scale’. In this locations for the purposes of this study are Rotterdam, the fuel production facility in which compression and
instance the capacity selected is representative of the Singapore, Fujairah, New York, Long Beach and Gibraltar. hydrogen storage in a compressed state is undertaken an
annual fuel consumption of approximately 33 container The transportation of the hydrogen fuel product is assumed additional stage of liquefaction is required to carry out
ships or 93 oil tankers with typical tonnage, power and to be undertaken by a vessel capable of the carriage of the the further phase conversion of the fuel product. It would
range characteristics. An operational lifespan of 30 years' total fuel production facility storage capacity in a single be necessary for the systems and equipment associated
duration has been assumed for the fuel production voyage, necessitating ten voyages on an annual basis. with this liquefaction stage to be capable of processing the
facility, throughout which uniform repayment of the initial total storage capacity of the fuel production facility at an
capital expenditure is expected in addition to a return rate Figure 17 summarises the distances from the production appropriate rate for loading of the vessel.
equivalent to a 7% weighted average cost of capital. location to the primary bunkering locations for electro-
hydrogen. Through use of these values an average figure In this instance a processing capacity of 50,000 tonnes per
A value of 0.8 has been assumed for the operation of the for the voyage distance between the fuel production and day has been considered for this additional liquefaction
constituent systems and equipment, representing an annual primary bunker locations has been calculated for both the stage, to enable vessel loading to be undertaken within a
processing time of 80% (7,008 hours) and corresponding to Middle East and South America alternatives. period that is typical for such vessels (Croatian Shipbuilding,
a scheduled downtime of 20% (1,752 hours). An operational 2014), i.e. within 24 hours.
lifespan of 75,000 hours has been used for the alkaline There are two distinct types of electro-hydrogen production
facilities that have been considered within this study, the The results of the calculations are included below within
electrolysers, as provided within (Schmidt, et al., 2017),
variation of which being concerned with the state in which Table 3 and Table 4, in which the capital expenditure, the
and has been included within the calculations in a manner
storage of the hydrogen fuel product is undertaken. fixed operational expenditure and the variable operational
assuming direct replacement for the operational lifespan
This variation represents storage of the hydrogen fuel expenditure required for the fuel production facility
of the fuel production facility.
product in a liquefied state at atmospheric pressure are provided.

( CONT INUE D )
Table 3 - Financial requirements for renewable electricity hydrogen production - liquefaction storage
Production stage Capital expenditure ($) Fixed operational expenditure ($/y) Variable operational expenditure ($/y)
Pre-treatment 2,149,515 92,429 2,104,246
Electrolysis 118,000,000 3,540,000 547,813,752
Liquefaction 84,189 4,209 128,902,597
Storage 9,000,000 45,000,000 128,903
Total 129,233,704 48,636,638 678,949,498
Table 4 - Financial requirements for renewable electricity hydrogen production - compression storage
Pre-treatment 2,149,515 92,429 2,104,246
Electrolysis 118,000,000 3,540,000 547,813,752
Compression 101,554 30 29,561,170
Storage 34,869,000 10,461 NaN
Liquefaction 1,966,667 98,333 128,902,597
Total 157,086,736 3,741,253 708,381,765

The emissions that are attributable to the production of 7,002nm respectively. Similarly, the voyage distances The resultant emission values that are attributable to the
hydrogen through steam reformation of natural gas are assumed for transportation of electro-hydrogen from the production of hydrogen from natural gas and sources of
HYD RO G E N PRO D UCT IO N EM ISSIO N S provided within Table 5 (Spath & Mann, 2001). It has been port of Ras Tanura by sea are 6,471nm, 3,736nm, 466nm, renewable energy respectively are provided within Table
assumed for the purposes of this study that no emissions 8,281nm, 11,393nm and 5,097nm respectively (SeaRoutes, 5, represented in differing scales of concentration per
are formed as a direct result of the production of hydrogen 2017). Through use of these values an average figure for the tonne of fuel production. The emissions for natural gas
through the electrolysis of water using sources of renewable voyage distance between the proposed fuel production and derived hydrogen correspond to those attributable to the
energy. However, as the location of the fuel production primary bunker locations has been calculated for both the production process, for which it has been assumed no
facility holds significant influence over the feasibility of Middle East and South America geographical alternatives. additional transportation is required. In this instance it is
hydrogen production in this manner, recognition and assumed that the production of hydrogen from natural
assignation of the transportation emissions is required. The transportation emissions have been calculated gas may be undertaken at the primary bunkering location,
using these average distance values in combination as the geographical location holds limited influence over
As specified previously, the geographical locations of with information provided within (Brynolf, et al., 2014) feasibility. In contrast, the emissions for renewable energy
electro-hydrogen production that are considered within this concerning the energy requirements for transportation derived hydrogen correspond to those attributable to the
study are South America and the Middle East, specifically the and the combustion characteristics of propulsion machinery production process, assumed as zero, in combination with
port of Quintero (Chile) and the port of Ras Tanura (Saudi obtained from (Kristensen, 2012), (Moldanova, et al., 2010) those attributable to the additional transportation that
Arabia) respectively. The locations that are considered and (International Maritime Organization, 2014). Through is required.
as the primary bunker locations for electro-hydrogen these calculations, figures corresponding to transportation
distribution are Rotterdam, Singapore, Fujairah, New York, from the Middle East and South America could be obtained,
Long Beach and Gibraltar. The voyage distances assumed for from which an average has been taken to represent the
transportation of electro-hydrogen from the port of Quintero typical emissions attributable to the fuel product as
are 7,465nm, 9,985nm, 9,688nm, 4,643nm, 4,803nm and a consequence of these transportation requirements.

HYD RO G E N PRO D UCT IO N EM ISSIO N S
( CONT INUE D )
Table 5 - Hydrogen production emissions
Emission compound Hydrogen production from natural gas Hydrogen production from renewable electricity
Carbon dioxide CO2 (t.em/t.fp) 10.73 0.2036
Methane CH4 (g.em/t.fp) 66,260 3.762
Nitrous oxide N2O (g.em/t.fp) 38.52 11.91
Oxides of nitrogen NOX (kg.em/t.fp) 13.17 1.254
Oxides of sulphur SOX (kg.em/t.fp) 8.854 0.1365
Particulate matter PM (g.em/t.fp) 758.0 162.3
Data Sources: NG-Hydrogen Production Emissions (Spath & Mann, 2001); Electro-Hydrogen Production Emissions (Brynolf, et al., 2014),
(Kristensen, 2012), (Moldanova, et al., 2010) and (International Maritime Organization, 2014).

HYD RO G E N PRO D UCT IO N EM ISSIO N S
( CONT INUE D )
In order to estimate the cost of hydrogen as a fuel product, produced through this process in a CO2 neutral manner. the production of hydrogen through steam reformation of
the additional costs as a consequence of CO2 capture and The additional cost for transportation of an electro- natural gas and in combination with carbon capture and
storage and transportation of the fuel product are required. hydrogen fuel product is provided within (International storage corresponds approximately to a 0.6% and 1.2%
A further aspect that should be considered within the Energy Agency, 2014), in which an average value of $165 annual cost reduction respectively (International Energy
estimation of the hydrogen fuel product cost is the potential per tonne is obtained from the specified range of $153 - Agency, 2014). The differentiated rate calculated for the
for reductions over time as a result of increased technology $177 per tonne. The application of this additional cost to production of hydrogen using sources of renewable energy
adoption and future development. the production cost of hydrogen through the electrolysis for the electrolysis of water corresponds approximately to a
of water is necessary to represent the location-dependent 4% annual cost reduction (International Renewable Energy
The additional cost of carbon capture and storage for the nature of fuel production in this manner. Agency, 2013).
production of hydrogen from natural gas is specified within
as $670 per tonne of fuel product within (International An estimate of the fuel production cost reduction over The fuel product cost estimates obtained through
Energy Agency, 2017), corresponding with CO2 emissions time due to increased technology utilisation and future integration of the specified additional costs and application
of 10.7 t.em/t.fp in accordance with (Spath & Mann, 2001). development is provided within (International Energy of the differentiated rates of reduction are included below
The application of this additional cost to the production Agency, 2014) and (International Renewable Energy Agency, within Table 6 for the alternative forms of hydrogen
cost of hydrogen through steam reformation of natural gas 2013), from which differentiated rates of cost reduction production considered within this study.
is necessary to emulate the cost of the fuel product when could be calculated. The differentiated rate calculated for
Table 6 - Hydrogen fuel product cost estimates
Year NG-hydrogen ($/t) NG&CCS-hydrogen ($/t) Liq. electro-hydrogen ($/t) Comp. electro-hydrogen ($/t)
2018 2,000 2,670 1,831 1,622
2030 1,861 2,276 1,196 1,067
2040 1,753 2,031 856 769
2050 1,651 1,837 628 570
Data Sources: Carbon Capture and Storage Costs (International Energy Agency, 2017), (Spath & Mann, 2001); Transportation Costs (International
Energy Agency, 2014); Production Cost Reductions (International Energy Agency, 2014), (International Renewable Energy Agency, 2013).

AM M O N IA
Ammonia production
pathways.
Ammonia production
The ammonia fuel pathways that are considered within
this study are as indicated within Figure 18. The requisite
primary energy sources for fuel production in this instance
are natural gas or renewable electricity in combination
with water, which may undergo conversion to ammonia
through steam reformation or electrolysis respectively in
combination with a Haber-Bosch process.
A single method for storage of the fuel product following

conversion has been considered, in a state corresponding
to atmospheric pressure and low temperature (-33°C),
i.e. through refrigeration. It has been assumed that the
transportation, bunkering and onboard storage of the
fuel product would be undertaken exclusively whilst in a
refrigerated liquid state, i.e. at atmospheric pressure and
low temperature.
The cost of ammonia as a fuel product obtained through

the steam reformation of natural gas and the electrolysis of
water are specified as $200-$600 and $400-$650 respectively
within (International Energy Agency, 2017). These costs are
comprised of capital investment requirements in addition
to the fixed and variable operational expenses of the
production process in a similar manner to that described
previously for the production of hydrogen.

AM M O N IA PRO D UCTIO N
( CONT INUE D )
Fuel production
Natural Gas Synthesis gas
Water-gas shift
Steam reaction and
Natural gas
and storage
Hydrogen Ammonia Transportation Bunkering Vessel storage
Ammonia
refrigeration Transportation as Storage as a
Haber-bosch
plant and a refrigerated No conversion refrigerated
process
storage liquid liquid
Water
Renewable
Electrolysis
electricity
Figure 18 - Ammonia production pathways

( CONT INUE D )
Steam reformation versus electrolysis

In this instance the price of natural gas has greater influence for the cost of ammonia production through steam The requisite information and parameters in this
over the variable operational expenses than the price of reformation may be obtained through an average of instance, concerning the capital expenses of the facility,
electricity for the production of ammonia through steam the figures specified previously. However, to obtain an the maintenance costs of systems and equipment and
reformation, and as such the location of the fuel production appropriate level of representation for the cost of ammonia the energy requirements of the production process,
facility is of minor significance. Correspondingly, the price production through electrolysis, calculation is necessary are included below within Table 7. These parameters
of electricity has a singular influence over the variable to incorporate the location-specific price of renewable correspond to the individual stages of the fuel production
operational expenses for the production of ammonia electricity. process for ammonia and have been obtained from various
through electrolysis, and as a consequence the sources of literature, as indicated within the applicable data
location of the fuel production facility is of primary The geographical locations considered for the cost sources specification.
importance (International Energy Agency, 2017). of ammonia production through electrolysis are
Therefore, an appropriate level of representation as per those previously specified for hydrogen.
Table 7 - Parameters for renewable electricity ammonia production
Air separation 7.29 ($/kg) d 4% of Capex d 71.25% d 4.5 (kW/kg) d
Haber-Bosch 13 ($/kg) d 4% of Capex d 73.4 - 81.8% d 0.46 - 1.32 (kWh/kg) e
Refrigeration 0.03788731 (kWh/kg) e

0.7 ($/kg) d 3% of Capex d 85% d
Storage 0.1% Boil-off per day d
Data Sources: a (Fasihi, et al., 2016); b (International Energy Agency, 2017); c (Schmidt, et al., 2017); d (Morgan, 2013); e (Bartels, 2008).

( CONT INUE D )
Production facility
The calculations for the fuel product costs of ammonia are (International Energy Agency, 2017); an electrolyser lifespan The results of the calculations are included below within
based on a production facility with similar characteristics of 75,000 hours (Schmidt, et al., 2017); and a facility storage Table 8, in which the capital expenditure, the fixed
to those of the hydrogen production facility described capacity of 50,000 tonnes. The locations considered as operational expenditure and the variable operational
previously, which includes: an annual production capacity primary bunker locations in this instance are also as per expenditure required for the fuel production facility
of 500,000 tonnes per year (representing the annual fuel those specified previously, with transportation assumed are provided.
consumption of 5 container ships or 15 oil tankers); a to be similarly undertaken by a vessel with a capacity that
facility operational lifespan of 30 years; a weighted average corresponds to the fuel production facility storage capacity,
cost of capital of 7 percent; a facility utilisation rate of 0.8 i.e. 50,000t per scheduled voyage.
Table 8 - Financial requirements for renewable electricity ammonia production
Pre-treatment 234,678 10,091 103,133
Electrolysis 20,951,911 628,557 138,955,752
Air separation 534,710 21,388 50,645,078
Haber-Bosch 1,159,389 46,376 11,182,345
Refrigeration 62,429 1,873 434,590
Storage 35,000,000 1,050,000 435
Total 57,943,117 1,758,285 201,321,333

AM M O N IA PRO D UCTIO N EM ISSIO NS
Ammonia production emissions

The emissions that are attributable to the production of The geographical locations of electro-ammonia production the Middle East and South America could be obtained, from no additional transportation is required. In this instance it
ammonia through steam reformation of natural gas are and those that are considered for distribution of the fuel which an average has been taken to represent the typical is assumed that the production of ammonia from natural
provided within (Spath & Mann, 2001), (Wood & Cowie, product are as per those specified previously for electro- emissions attributable to the fuel product as a consequence gas may be undertaken at the primary bunkering location,
2004) and (Environmental Protection Agency, 1993) and hydrogen, for which the transportation voyage distances of these transportation requirements. as the geographical location holds limited influence over
are shown within Table 9. To maintain consistency with (SeaRoutes, 2017) are retained. The transportation feasibility. In contrast, the emissions for renewable energy-
the assumptions made in relation to the production of emissions for electro-ammonia have been calculated The resultant emission values that are attributable to the derived ammonia correspond to those attributable to the
electro-hydrogen, it has been assumed that no emissions in a manner consistent with that adopted for electro- production of ammonia from natural gas and sources production process, assumed as zero, in combination with
are formed as a direct result of the production of electro- hydrogen, using average distance values in combination of renewable energy respectively are provided within those attributable to the additional transportation that
ammonia. However, as the location of the fuel production with information provided within (Brynolf, et al., Table 9, represented in differing scales of concentration is required.
facility holds significant influence over the feasibility of 2014), (Kristensen, 2012), (Moldanova, et al., 2010) and per tonne of fuel production. The emissions for natural
ammonia production in this manner, recognition and (International Maritime Organization, 2014). Through these gas-derived ammonia correspond to those attributable
assignation of the transportation emissions is required. calculations figures corresponding to transportation from to the production process, for which it has been assumed
Table 9 - Ammonia production emissions
Emission compound Ammonia production from natural gas Ammonia production from renewable electricity
Carbon dioxide CO2 (t.em/t.fp) 2.487 0.2036
Methane CH4 (g.em/t.fp) 11,850 3.762
Data Sources: NG-Ammonia Production Emissions (Spath & Mann, 2001), (Wood & Cowie, 2004), (Environmental Protection Agency, 1993); Electro-Ammonia Production Emissions
(Brynolf, et al., 2014), (Kristensen, 2012), (Moldanova, et al., 2010) and (International Maritime Organization, 2014).

AM M O N IA PRO D UCTIO N CO ST EM ISSIONS
Ammonia production cost emissions

In order to estimate the cost of ammonia as a fuel product accordance with (Spath & Mann, 2001) and (Wood & Cowie, approximately to a 0.6% and 1.2% annual cost reduction
in a manner consistent with that undertaken for hydrogen, 2004). The additional cost for transportation of an electro- respectively (International Energy Agency, 2014). The
the additional costs as a consequence of CO2 capture and ammonia fuel product is provided within (International differentiated rate calculated for the production of ammonia
storage and transportation of the fuel product are required. Energy Agency, 2017), in which an average value using sources of renewable energy for the electrolysis of
Similarly, the potential for reductions over time as a result of $50 per tonne is obtained from the specified range water corresponds approximately to a 4% annual cost
of increased technology adoption and future development of $40 - $60 per tonne. reduction (International Renewable Energy Agency, 2013).
should be considered within the estimation of the electro-
ammonia cost to allow for comparison with the alternative In order to estimate the fuel production cost reduction The fuel product cost estimates obtained through
fuel products. over time due to increased technology utilisation and integration of the specified additional costs and application
future development, application of differentiated rates in a of the differentiated rates of reduction are included below
The additional cost of carbon capture and storage for manner consistent to that specified previously is necessary. within Table 10 for the alternative forms of ammonia
the production of ammonia from natural gas is $153 per The differentiated rate calculated for the production of production considered within this study.
tonne of fuel product (International Energy Agency, 2017), ammonia through steam reformation of natural gas and in
corresponding with CO2 emissions of 2.5 t.em/t.fp in combination with carbon capture and storage corresponds
Table 10 - Ammonia fuel product cost estimates
Year NG-ammonia ($/t) NG&CCS-ammonia ($/t) Electro-ammonia ($/t)
2018 400 553 468
2030 372 467 309
2040 351 414 223
2050 330 373 166
Data Sources: Carbon Capture and Storage Costs (International Energy Agency, 2017), (Spath & Mann, 2001), (Wood & Cowie, 2004), (Environmental Protection Agency, 1993); Transportation Costs
(International Energy Agency, 2017); Production Cost Reductions (International Energy Agency, 2014), (International Renewable Energy Agency, 2013).

METHANOL
Methanol production
pathways.
Methanol production
The methanol fuel pathways that are considered
within this study are as indicated within Figure 19.
The requisite primary energy sources for fuel production
in this instance are biomass or renewable electricity in
combination with water, which may undergo conversion
to methanol through gasification or electrolysis with carbon
capture respectively in combination with a methanol
synthesis process.

to atmospheric pressure and temperature, i.e. in a natural
state. It has been assumed that the transportation,
bunkering and onboard storage of the fuel product would
be undertaken exclusively whilst in a natural state, i.e. at
atmospheric pressure and temperature.
The cost of methanol as a fuel product obtained through the

gasification of biomass and electrolysis in combination with
carbon capture are specified as $177-$944 and $602-$1,062
respectively within (International Renewable Energy Agency,
2013). These costs are composed of capital investment
requirements in addition to the fixed and variable
operational expenses of the production process in a similar
manner to that described previously for the production
of hydrogen.

M E T H A N O L P RO D UCTIO N
( CONT INUE D )
Gasification versus electrolysis

In this instance the price of biomass has greater influence The geographical locations considered within the
over the variable operational expenses than the price calculations for the cost of methanol production through
of electricity for the production of methanol through electrolysis are as per those specified previously for the
gasification, and as such the location of the fuel production production of hydrogen ammonia.
facility is of minor significance. Correspondingly, the price
of electricity has a singular influence over the variable The requisite information and parameters in this
operational expenses for the production of methanol instance, concerning the capital expenses of the facility,
through electrolysis, and as a consequence the location the maintenance costs of systems and equipment and
of the fuel production facility is of primary importance the energy requirements of the production process,
(International Energy Agency, 2017). Therefore, an are included below within Table 11. These parameters
appropriate level of representation for the cost of methanol correspond to the individual stages of the fuel production
production through gasification may be obtained through process for methanol and have been obtained from various
an average of the figures specified previously. In this regard sources of literature, as indicated within the applicable data
it is assumed that cultivation of the biomass required for sources specification.
the production of methanol in this manner is undertaken
within the geographical region of the fuel production facility.
However, to obtain an appropriate level of representation
for the cost of methanol production through electrolysis,
calculation is necessary to incorporate the location-specific
price of renewable electricity.

( CONT INUE D )
Fuel production
Water Hydrogen
Reverse water-gas
Renewable
Electrolysis
shift reaction Synthesis gas Methanol Transportation Bunkering Vessel storage
electricity (carbon source
required)
Methanol Methanol Transportation Storage as a
synthesis No conversion
storage as a liquid liquid
Biomass process
Figure 19 - Methanol production pathway
Table 11 - Parameters for renewable electricity methanol production
Carbon capture 228 (€/t) d 4% of Capex d 94% d 225 (kWh/t) d
MeOH synthesis 726 (€kW) d 4% of Capex d 80.3% d 216 (kWh/t) d
Storage 0.144 ($/kg) e 0.01 - 0.05% of Capex 100% NaN
Data Sources: a (Fasihi, et al., 2016); b (International Energy Agency, 2017); c (Schmidt, et al., 2017); d (Fasihi & Breyer, 2017); e (Amirkhas, et al., 2006).

( CONT INUE D )
Production facility
The calculations for the fuel product costs of ammonia are (International Energy Agency, 2017); an electrolyser lifespan The results of the calculations are included below in
based on a production facility with similar characteristics of 75,000 hours (Schmidt, et al., 2017); and a facility storage Table 12, in which the capital expenditure, the fixed
to those of the hydrogen production facility described capacity of 50,000 tonnes. The locations considered as operational expenditure and the variable operational
previously, which includes: an annual production capacity primary bunker locations in this instance are also as per expenditure required for the fuel production facility
of 500,000 tonnes per year (representing the annual fuel those specified previously, with transportation assumed are provided.
consumption of 5 container ships or 15 oil tankers); a to be similarly undertaken by a vessel with a capacity that
facility operational lifespan of 30 years; a weighted average corresponds to the fuel production facility storage capacity,
cost of capital of 7 percent; a facility utilisation rate of 0.8 i.e. 50,000t per scheduled voyage.
Table 12 - Financial requirements for renewable electricity methanol production
Pre-treatment 429,903 18,486 116,168
Electrolysis 929,840,000 27,895,200 156,518,215
Carbon capture 35,031,250 1,401,250 3,407,314
MeOH synthesis 488,208,583 19,528,343 2,622,665
Storage 7,200,000 2,160 0
Total 1,460,709,736 48,845,439 162,664,362

( CONT INUE D )
The emissions that are attributable to the production of The geographical locations of electro-methanol production the Middle East and South America could be obtained, from additional transportation is required. In this instance it is
methanol through gasification of biomass are provided and those that are considered for distribution of the which an average has been taken to represent the typical assumed that the production of methanol from biomass
within (Brynolf, et al., 2014) and derived in accordance with fuel product are as per those specified previously for emissions attributable to the fuel product as a consequence may be undertaken at the primary bunkering location,
the life-cycle reduction potentials of (DNV GL - Maritime, electro-hydrogen, for which the transportation as shown in of these transportation requirements. as the geographical location holds limited influence over
2018), as shown within Table 13. To maintain consistency Figure 17 voyage distances (SeaRoutes, 2017) are retained. feasibility. In contrast, the emissions for renewable energy-
with the assumptions made in relation to the production of The transportation emissions for electro-methanol have The resultant emission values that are attributable to the derived methanol correspond to those attributable to
electro-hydrogen, it has been assumed that no emissions been calculated in a manner consistent with that used production of methanol from biomass and sources of the production process, assumed as -1.46 t.em/t.fp for
are formed as a direct result of the production of electro- for electro-hydrogen, using average distance values in renewable energy respectively are provided within CO2 (Fasihi & Breyer, 2017) and zero for the remaining
methanol. However, as the location of the fuel production combination with information provided within (Brynolf, et Table 13, represented in differing scales of concentration compounds, in combination with those attributable
facility holds significant influence over the feasibility of al., 2014), (Kristensen, 2012), (Moldanova, et al., 2010) and per tonne of fuel production. The emissions for biomass- to the additional transportation that is required.
methanol production in this manner, recognition and (International Maritime Organization, 2014). Through these derived methanol correspond to those attributable to the
assignation of the transportation emissions is required. calculations figures corresponding to transportation from production process, for which it has been assumed no
Table 13 - Methanol production emissions
Emission compound Methanol production from biomass Methanol production from renewable electricity
Carbon dioxide CO2 (t.em/t.fp) -0.7900 -1.256
Methane CH4 (g.em/t.fp) 835.8 3.762
Data Sources: Bio-Methanol Production Emissions (Brynolf, et al., 2014); Electro-Methanol Production Emissions (Fasihi & Breyer, 2017); (Brynolf, et al., 2014), (Kristensen, 2012),
(Moldanova, et al., 2010) , (International Maritime Organization, 2014) and DNV GL - Maritime, 2018.

M E T H A N O L P RO D UCTIO N CO ST ESTIMATES
Methanol production cost estimates

In order to estimate the cost of methanol as a fuel product of $17 per tonne is obtained from the indicated range
in a manner consistent with that undertaken for hydrogen, of $6 - $38 per tonne. The differentiated rate calculated for
the additional costs as a consequence of transportation of the production of methanol through gasification of biomass
the fuel product are required. Similarly, the potential for and electrolysis of water corresponds approximately
reductions over time as a result of increased technology to a 2.5% and 4% annual cost reduction respectively
adoption and future development should be considered (International Renewable Energy Agency, 2013).
within the estimation of the electro-methanol cost to allow
for comparison with the alternative fuel products. The fuel product cost estimates obtained through
integration of the specified additional costs and application
The additional cost for transportation of an electro- of the differentiated rates of reduction are included below
methanol fuel product is derived from (American Journal within Table 14 for the alternative forms of methanol
of Transportation, 2018), from which an average value production considered within this study.
Table 14 - Methanol fuel product cost estimates
Year Bio-methanol ($/t) Electro-methanol ($/t)
2018 561 742
2030 416 466
2040 324 318
2050 252 219
Data Sources: Transportation Costs (American Journal of Transportation, 2018); Production Cost Reductions (International Energy Agency, 2014), (International Renewable Energy Agency, 2013).

GA S O IL
Gas oil
production
pathways.
Gas oil production
The gas oil fuel pathways that are considered
within this study are as indicated within Figure 20.
The requisite primary energy sources for fuel production
in this instance are biomass or renewable electricity in
combination with water, which may undergo conversion
to gas oil through gasification or electrolysis with carbon
capture respectively in combination with the Fischer-
Tropsch process.

to atmospheric pressure and temperature, i.e. in a natural
state. It has been assumed that the transportation,
bunkering and onboard storage of the fuel product
would be undertaken exclusively whilst in a natural state,
i.e. at atmospheric pressure and temperature.
The cost of gas oil as a fuel product obtained through the

gasification of biomass and electrolysis in combination
with carbon capture are specified as $628-$816 and
$673-$1,944 within (Festel, et al., 2014) and (Brynolf, et al.,
2018) respectively. These costs are comprised of capital
investment requirements in addition to the fixed and
variable operational expenses of the production process
in a similar manner to that described previously for the
production of hydrogen.

GA S O IL P RO D UCT IO N
( CONT INUE D )
Fuel production
Water Hydrogen
Reverse water-gas
Renewable shift reaction
Electrolysis
electricity (carbon capture
required)
Synthesis gas Gas oil Transportation Bunkering Vessel storage
Fischer-tropsch Transportation Storage as a

Gas oil storage No conversion
process as a liquid liquid
Biomass
Figure 20 - Gas oil production pathway

( CONT INUE D )
Gasification verses electrolysis

In this instance the price of biomass has greater influence representation for the cost of gas oil production through The geographical locations considered within the The requisite information and parameters in this
over the variable operational expenses than the price of gasification may be obtained through an average of the calculations for the cost of gas oil production through instance, concerning the capital expenses of the facility,
electricity for the production of gas oil through gasification, figures specified previously. In this regard it is assumed that electrolysis are as per those specified previously for the the maintenance costs of systems and equipment and
and as such the location of the fuel production facility cultivation of the biomass required for the production of production of hydrogen, i.e. as shown in Figure 17. the energy requirements of the production process,
is of minor significance. Correspondingly, the price of gas oil in this manner is undertaken within the geographical South America and the Middle East. The renewable are included below within Table 15. These parameters
electricity has a singular influence over the variable region of the fuel production facility. However, to obtain an electricity prices that have been assumed for these correspond to the individual stages of the fuel production
operational expenses for the production of gas oil through appropriate level of representation for the cost of gas oil locations are also as per those used previously, specifically process for gas oil and have been obtained from various
electrolysis, and as a consequence the location of the fuel production through electrolysis, calculation is necessary 21 $/MWh for South America and 18 $/MWh for the Middle sources of literature, as indicated within the applicable data
production facility is of primary importance (International to adequately incorporate the location-specific price of East (IMarEST, 2015). sources specification.
Energy Agency, 2017). Therefore, an appropriate level of renewable electricity.
Table 15 - Parameters for renewable electricity gas oil production
Carbon capture 228 (€/t) d 4% of Capex d 94% d 225 (kWh/t) d
Hydrocarbons 60,000 (€/bpd) a 3% of Capex a 57.5% a 258 (kWh/t) a
Storage 0.14 ($/kg) e 0.01 - 0.05% of Capex e 100% e NaN
Data Sources: a (Fasihi, et al., 2016); b (International Energy Agency, 2017); c (Schmidt, et al., 2017); d (Fasihi & Breyer, 2017); e (DNV-GL Maritime, 2018).

( CONT INUE D )
Production facility
The calculations for the fuel product costs of gas oil are primary bunker locations in this instance are also as per
based on a production facility with similar characteristics those specified previously, with transportation assumed
to those of the hydrogen production facility described to be similarly undertaken by a vessel with a capacity that
previously, which includes: an annual production capacity corresponds to the fuel production facility storage capacity,
of 500,000 tonnes per year (representing the annual fuel i.e. 50,000t per scheduled voyage.
consumption of 11 container ships or 30 oil tankers); a
facility operational lifespan of 30 years; a weighted average The results of the calculations are included below within
cost of capital of 7 percent; a facility utilisation rate of 0.8 Table 16, in which the capital expenditure, the fixed
(International Energy Agency, 2017); an electrolyser lifespan operational expenditure and the variable operational
of 75,000 hours (Schmidt, et al., 2017); and a facility storage expenditure required for the fuel production facility
capacity of 50,000 tonnes. The locations considered as are provided.
Table 16 - Financial requirements for renewable electricity gas oil production
Pre-treatment 1,416,643 60,916 373,468
Electrolysis 3,064,067,936 91,922,038 515,768,781
Carbon capture 117,118,793 4,684,752 11,391,557
Hydrocarbons 1,598,682,318 47,960,470 6,043,120
Storage 9,669,473 2,901 0
Total 4,790,955,163 144,631,077 533,576,926

GA S O IL P RO D UCT IO N EM ISSIO NS
Gas oil production emissions

The emissions that are attributable to the production of The geographical locations of electro-gas oil production and Through these calculations figures corresponding to process, for which it has been assumed no additional
gas oil through gasification of biomass are provided within those that are considered for distribution of the fuel product transportation from the Middle East and South America transportation is required. In this instance it is assumed that
(Brynolf, et al., 2014) and derived in accordance with the are as per those specified previously for electro-hydrogen, could be obtained, from which an average has been taken the production of gas oil from biomass may be undertaken
life-cycle reduction potentials of (DNV GL - Maritime, 2018), for which the transportation voyage distances (SeaRoutes, to represent the typical emissions attributable to the at the primary bunkering location, as the geographical
as shown within Table 17. To maintain consistency with the 2017) are retained. fuel product as a consequence of these transportation location holds limited influence over feasibility. In contrast,
assumptions made in relation to the production of electro- requirements. the emissions for renewable energy-derived gas oil
hydrogen, it has been assumed that no emissions are The transportation emissions for electro-gas oil have been correspond to those attributable to the production process,
formed as a direct result of the production of electro-gas oil. calculated in a manner consistent with that used for electro- The resultant emission values that are attributable to assumed as -3.53 t.em/t.fp for CO2 (Fasihi, et al., 2016) and
hydrogen, as per Figure 17 using average distance values in the production of gas oil from biomass and sources zero for the remaining compounds, in combination with
However, as the location of the fuel production facility combination with information provided within (Brynolf, et of renewable energy respectively are provided within those attributable to the additional transportation that
holds significant influence over the feasibility of gas oil al., 2014), (Kristensen, 2012), (Moldanova, et al., 2010) and Table 17, represented in differing scales of concentration per is required.
production in this manner, recognition and assignation (International Maritime Organization, 2014). tonne of fuel production. The emissions for biomass-derived
of the transportation emissions is required. gas oil correspond to those attributable to the production
Table 17 - Gas oil production emissions
Emission compound Gas oil production from biomass Gas oil production from renewable electricity
Carbon dioxide CO2 (t.em/t.fp) -2.410 -3.330
Methane CH4 (g.em/t.fp) 286.8 3.762
Data Sources: Bio-Gas Oil Production Emissions (Zhou, et al., 2017); Electro-Gas Oil Production Emissions (Fasihi, et al., 2016), (Brynolf, et al., 2014), (Kristensen, 2012),
(Moldanova, et al., 2010) and (International Maritime Organization, 2014); (DNV GL - Maritime, 2018).

GA S O IL P RO D UCT IO N CO ST ESTIM ATES
Gas oil production cost estimates

In order to estimate the cost of gas oil as a fuel product in of $8 per tonne is obtained from the indicated range of $5
a manner consistent with that undertaken for hydrogen, - $13 per tonne. The differentiated rate calculated for the
the additional costs as a consequence of transportation production of gas oil through gasification of biomass and
of the fuel product are required. Similarly, the potential for electrolysis of water corresponds approximately to a 2.5%
reductions over time as a result of increased technology and 4% annual cost reduction respectively (International
adoption and future development should be considered Renewable Energy Agency, 2013).
within the estimation of the electro-gas oil cost to allow
for comparison with the alternative fuel products. The fuel product cost estimates obtained through
integration of the specified additional costs and application
The additional cost for transportation of an electro-gas of the differentiated rates of reduction are included
oil fuel product is derived from (American Journal of below within Table 18 for the alternative forms of gas oil
Transportation, 2018), from which an average value production considered within this study.
Table 18 - Gas oil fuel product cost estimates
Year Bio-gas oil ($/t) Electro-gas oil ($/t)
2018 722 1,707
2030 535 1,059
2040 417 713
2050 324 480
Data Sources: Transportation Costs (American Journal of Transportation, 2018); Production Cost Reductions (International Energy Agency, 2014), (International Renewable Energy Agency, 2013).

EL E CT RI C I TY
Electricity
production
pathways.
Electricity production
The electricity pathways that are considered within this
study are as indicated within Figure 21. The requisite
primary energy sources for production in this instance is
renewable electricity in combination with some form of
battery storage, which is assumed to be situated within
the port facility that is to function as the intended vessel-
charging location.
The inclusion of a battery storage facility within this pathway

is considered necessary to enable charging of a vessel to
be undertaken in a comparable timeframe to that required
for bunkering of an equivalent fuel product. The storage of
renewable electricity in this manner would also function
as a grid stabilisation mechanism during periods of excess
production and provide justification for the construction
of the additional generation capacity required by such
a facility.

EL E CT RI C I TY PRO D UCTIO N
( CONT INUE D )
Vessel storage Conversion Propulsion

Production
Inversion and
Renewable Battery storage waveform Electric motor
electricity generation
Shore storage Charging
Battery storage No conversion
Figure 21 - Electricity production pathway
The geographical locations considered within the specifically 21 $/MWh for South America and 18 $/MWh energy requirements of the storage process, are included
calculations for the cost of electricity storage in this manner for the Middle East (IMarEST, 2015). below within Table 19. These parameters correspond to
are as per those specified previously for the production the individual stages of the storage process for renewable
of hydrogen, i.e. South America and the Middle East. The requisite information and parameters in this instance, electricity and have been obtained from various sources
The renewable electricity prices that have been assumed concerning the capital expenses of the facility, the of literature, as indicated within the applicable data
for these locations are also as per those used previously, maintenance costs of systems and equipment and the sources specification.
Table 19 - Parameters for renewable electricity storage
Transmission 0.612 (€/kW/km) a 0.0075 (€/kW/km) a 98.4% per 1000km a NaN
Conversion 180 (€/kW) a 1.8 (€/kW) a 98.6% a NaN
Battery storage 150 (€/kWh) b 6% of Capex b 90% b NaN
Data Sources: a (Fasihi & Breyer, 2017); b (Fasihi, et al., 2016).

( CONT INUE D )
Storage facility
The calculations for the product costs of renewable The coastal vessel electricity storage facility is scaled
electricity are based on a battery storage facility with similar to correspond with the tonnage, power and range
characteristics to those of the hydrogen production facility characteristics of electric vessels that are available at
described previously, which includes: a facility operational present, such as that developed by the HH Ferries Group
lifespan of 30 years; a weighted average cost of capital of 7 and ABB (Lambert, 2017) or the Hangzhou Modern Ship
percent; and a facility utilisation rate of 0.8 (International Design and Research Company (Lambert, 2017). In this
Energy Agency, 2017). In a dissimilar yet consistent manner instance a electrical capacity of 50MWh is assumed for the
to the fuel production facility calculations conducted storage facility, representing a capability to accommodate
previously, an operational lifespan of 15 years has been used the requirements of approximately ten vessels of this type
for the batteries, as provided within (Fasihi, et al., 2016). This and corresponding with an annual electricity consumption
has been included within the calculations assuming direct of 18.3GWh.
replacement of the batteries for the operational lifespan
of the electricity storage facility, corresponding with the The deep-sea vessel electricity storage facility is scaled to
assumptions made in reference to the electrolysers for correspond with the tonnage and power characteristics of
the fuel production facilities. An additional assumption in a typical bulk carrier (Doskocz, 2012) and oil/product tanker
this instance is the availability of an appropriate form and (Croatian Shipbuilding, 2014) with a range of approximately
capacity of renewable electricity generation at a distance 1,000nm; or greater with a corresponding reduction in the
of no more than 1,000km from the location of the battery former parameters. In this instance an electrical capacity
storage facility. of 4.5GWh is assumed for the storage facility, representing
a capability to accommodate the requirements of
There are two distinct categorisations of facility that have approximately two vessels of this type and corresponding
been considered within this study, the variation of which is with an annual electricity consumption of 1.6TWh.
concerned with the scale of electricity storage undertaken,
and hence the types of vessel intended for its utilisation. The results of the calculations are included below within
This variation represents an electricity storage facility with Table 20 and Table 21, in which the capital expenditure, the
the capacity to accommodate domestic inland, coastal fixed operational expenditure and the variable operational
and short sea vessels, of relatively small tonnage and expenditure required for the storage facility are provided.
limited range requirements, or larger vessels that are
more representative of deep-sea shipping respectively.

( CONT INUE D )
Table 20 - Financial requirements for renewable electricity storage - coastal vessels
Transmission 2,350,781 28,809 NaN
Conversion 691,406 6,914 NaN
Battery storage 22,125,000 1,327,500 388,818
Total 25,167,187 1,363,233 388,818
Table 21 - Financial requirements for renewable electricity storage - deep-sea vessels
Transmission 206,331,832 2,528,576 NaN
Conversion 60,685,833 606,858 NaN
Battery storage 1,941,946,650 116,516,799 34,127,205
Total 2,208,964,315 119,652,233 34,127,205

EL E CT RI C I TY PRO D UCTIO N CO ST ESTIMATES
Electricity production cost estimates

In order to estimate the cost of the renewable electricity The storage cost estimates obtained through application
storage in a manner consistent with that undertaken for of the differentiated rate of reduction are included below
the previous fuel products, the potential for reductions within Table 22 for the form of renewable electricity storage
over time as a result of increased technology adoption and that is considered within this study.
future development should be similarly considered. The
differentiated rate calculated for the storage of renewable
electricity in the form of batteries corresponds to an
approximate 2.5% annual cost reduction, which is assumed
to be consistent with that applicable to production of fuel
from biomass resources (International Renewable Energy
Agency, 2013).
Table 22 - Renewable electricity storage cost estimates
Year Battery electricity ($/MWh)
2018 239
2030 177
2040 138
2050 107
Data source: (International Renewable Energy Agency, 2013)

References and bibliography.
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Production in Trinidad & Tobago, Davis: University of Assessment of Power-to-Liquids (PtL) Fuels Production and Maritime Organization. Storing and Transporting Hydrogen, Springfield: Department
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Fuel production

We’ve designed this report to be Methanol production pathways

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Hydrogen Transportation Vessel storage

Gas oil storage

Figure 1 - Pathways diagram

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Electricity Battery storage of renewable electricity

Gas oil from renewable electricity (e-gas oil)

Gas oil Gas oil from biomass (bio-gas oil)

Methanol from renewable electricity (e-methanol)

Methanol Methanol from biomass (bio-methanol)

Ammonia from renewable electricity (e-NH3)

Ammonia Ammonia from natural gas (NG-NH3)

Hydrogen from renewable electricity (compression storage) (e-H2)

Hydrogen from renewable electricity (liquefaction storage) (e-H2)

Hydrogen Hydrogen from natural gas (NG-H2)

Liquified natural gas (LNG)

Low sulphur heavy fuel oil (LSHFO)

Marine diesel oil (MDO) 2030

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

82% Primary energy 97% Primary energy

45% Primary energy 46% Primary energy 9% Primary energy

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Net emissions per tonne of fuel produced and consumed

Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)

kg of emissions / tonne of fuel

kg of emissions / tonne of fuel

CH4 upstream CH4 operational N2O upstream N2O operational

Oxides of nitrogen (NOx) Oxides of sulphur (SOx) Particulate matter (PM)

90% 90% 90%

kg of emissions / tonne of fuel

kg of emissions / tonne of fuel

80% 80% 80%

70% 70% 70%

60% 60% 60%

50% 50% 50%

40% 40% 40%

20% 20% 20%

10% 10% 10%

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Zero-carbon fuel production and distribution

Production location Production location

Figure 15 - Zero-carbon fuel production and distribution map

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Hydrogen production pathways.

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Natural gas Synthesis gas

Hydrogen Hydrogen Transportation Storage as a

Figure 16 - Hydrogen production pathway

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Technical RE potential can supply the 2007

7.6–10 15.1–17.5 25–50

10–12.5 17.6–20 Over 50

EXECUTIVE SUMMARY HYDROGEN AMMONIA METHANOL GAS OIL ELECTRICITY REFERENCES

Table 1 - Parameters for renewable electricity hydrogen production - liquefaction storage

Pre-treatment 2.23 (€/m3) a 4.3% of Capex a 45% a 3 (kWh/m3) a