Decarbonizing the Global Shipping Industry: Evaluating Pathways for Alternative Fuels

Abstract

Achieving net-zero emissions across all sectors, including the shipping industry, which relies heavily on fossil fuels and traditional internal combustion engines for propulsion, is critical to mitigating climate change and limiting global temperature rise. This thesis evaluates decarbonizing pathways for the global shipping industry through alternative fuels. The decarbonization pathways for shipping are constructed by considering significant system decisions, including powertrains, fuel types, and feedstock. Each pathway is assessed based on cost and multi-attribute utility using system-level metrics relevant to shipping. For alternative fuels, fuel cost models have been developed to estimate the levelized cost of production based on varying electricity prices, natural gas prices, and capital and operating expenditure assumptions. With the fuel cost model results, the total cost of ownership models of bulk carrier vessels have been developed to calculate and compare the lifetime cost for operating vessels for various alternative fuel pathways. The cost models provide insights into the cost markup of alternative fuel pathways relative to the conventional fuels of maritime ships. The MIT’s Economic Projection and Policy Analysis (EPPA) model has been enhanced to represent a low-emission shipping option to assess the economic impact and make projections on the market share of the alternative fuel pathway through 2050. Required investment to enable low-emission shipping to enter the market has been estimated using the EPPA model. Combining findings from the multi-attribute utility, including lifecycle emissions of alternative fuels and economic modeling results, near-term, medium-term, and long-term pathways for low-emission shipping have been proposed.