Biodiesel offers best decarbonisation bang for the buck - ABS

Under a new ABS index, biodiesel showed up to 24 times more CO2 equivalent greenhouse gas (GHG) emissions per dollar on a well-to-wake basis compared to other alternative fuels, as detailed in the ABS 2024 Sustainability Outlook.

The publication explores various fuel pathways the maritime industry may adopt in the pursuit of the IMO’s 2050 net zero emissions goal, as well as their performance against 2030 and 2040 GHG emissions reductions targets.

Looking at current prices per gigajoule of energy, biodiesel was the second cheapest of the fuels listed, beaten only by VLSFO. Forecasting 2030 prices, ABS sees VLSFO becoming even cheaper while a significant drop in blue liquid hydrogen prices takes it to second place, pushing biodiesel to third.

The report considered a wide range of fuels and production pathways on a well-to-wake basis, accounting for well-to-tank emissions from production and distribution as well as tank-to-wake emissions from using the fuel onboard. Current standard grey fossil production methods were lined up against blue production methods, where well-to-tank emissions are offset by either carbon capture or the use of renewable biomass feedstocks, and green production methods, where fuels are produced from electrolysis and further processes powered by renewable energy.

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ABS’ figures show VLSFO, fossil LNG and LPG all failing to meet either 2030 or 2040 GHG emissions targets when measured by grammes of CO2 equivalent emitted per megajoule on a well-to-wake basis. e-LNG, blue ammonia, blue hydrogen, bio-LNG, and biodiesel all comfortably meet the 2030 targets today, and are each expected to meet the 2040 targets as production efficiency improves over the next decade and beyond. e-ammonia, green hydrogen, biomethanol, e-methanol, and e-diesel all meet the stricter 2040 targets already.

The report introduced a new index to compare alternative fuel pathways, the GHG Abatement Cost (GAC), which subtracts the cost of VLSFO from each sustainable fuel, then divides the remaining cost by the fuel’s CO2 equivalent GHG reduction compared to VLSFO. 

Using current fuel pricing, biodiesel had a GAC of 31.8 $/tonne of CO2 equivalent abated, compared to 140.1 for second place blue liquid hydrogen. The worst performer on the GAC index using current prices was e-diesel at 763.6, over 24 times higher than its bio-derived equivalent.

“The significant potential of e-fuels to reduce greenhouse gas emissions is hindered by the considerable expenses associated with the e-LH2, e-NH3, and e-Methanol pathways, which could restrict their widespread adoption,” said the report.

ABS applied the same methodology to three hypothetical future scenarios in order to identify the most economical path to 2050. The three scenarios look at futures where different fuel pathways have had high uptake and infrastructure development - e-fuel, biofuel and blue fuel.

Biofuel has the lowest GAC for two of the three scenarios, beaten only by blue hydrogen in the scenario of high blue fuels uptake. For each scenario, GAC was shown compared to VLSFO, highlighting fuels with the potential to offer lower costs than VLSFO in 2050.

For the high e-fuels uptake scenario, biodiesel, e-liquid hydrogen, and blue liquid hydrogen all showed lower fuel costs than VLSFO. Four fuels beat VLSFO in the biofuels high uptake scenario, with biodiesel leading biomethane, biomethanol, and blue liquid hydrogen. The high blue fuels uptake scenario returned the fewest sub-VLSFO results - just blue liquid hydrogen and biodiesel - and the highest GAC across the three scenarios of 421.9 for e-diesel. 

More details on the GAC index, ABS’s methodology, and the findings of the 150-page report can be found at the interactive Beyond the Horizon website, or at the Carbon Fuel Pathways and Transformational Technologies report.