Economic Assessment of Maritime Fuel Transformation for GHG Reduction in the International Shipping Sector

This study aims to predict the economic transition pathway for alternative fuels in accordance with the 2023 IMO GHG Strategy goals. The assessment considers the impact of alternative fuel transition on fuel costs (∆COSTFuel,t), carbon emission costs (∆COSTCO2 eq,t), and ship new/retrofit costs (∆COSTship). The parameters and boundary conditions were set based on the current status and trends in the international shipping industry, as determined from previous research, to predict the economic transition pathway for alternative fuels. The results show that in 2050, with a standardized economic efficiency of 130%, profit will reach its maximum value, approximately −54,000 million USD. The study standardized fuel ΔCOSTj, normalized, and ΔNPV%j, normalized as a basis for adjusting penetration rates. At this time, considering fuel costs and NPV%, the composition of alternative fuels is as follows: bio-LNG, bio-Methanol, e-LNG, e-Methanol, e-Ammonia, BD, and Fossil-LNG, with shares of 18.56%, 4.00%, 25.64%, 6.00%, 10.00%, 28.00%, and 0%, respectively. Compared to conventional marine fuel HFO, the increase ranges from 23.54% to 69.50% in the 2030s, 0.52% to 0.55% in the 2040s, and decreases by 6.88%–14.69% in 2050. Using more LNG and BD in the 2040s and 2050 is an alternative way to achieve a better economic fuel transition. Moreover, the economic penetration rate combination set in this study can achieve sufficiently small ∆COSTT,t and sufficiently large NPVΔt under specific assumptions and boundary conditions, rather than an absolute minimum ∆COSTT,t or the absolute maximum NPVΔt. The results revealed that no single alternative fuel has a comprehensive advantage in reducing carbon intensity and economic performance at all times. Given the uncertainties in the supply chain, cost-effectiveness, and infrastructure for Methanol and Ammonia, LNG and BD play a crucial role in the transition of international shipping fuels. Our work provides a fundamental and comprehensive prediction of fuel transition based on the current status and trends in the international shipping industry.