Fuel and the hull coating business case

Fuel and the hull coating business case

With operating costs and sustainability high on the agenda for the marine industry, one thing is certain: whatever fuel you use, you should use as little as possible. That means switching to a high-performance hull coating.

The IMO has stated that it wants the marine industry to reduce greenhouse gas emissions by at least 50 per cent by 2050. At the same time, vessel operators, customers and other industry stakeholders are pushing for more sustainable operations. This has placed fuel at the centre of industry discussions. The question everyone’s asking is ‘what will be the fuel of the future?’. 

The fuel dilemma

Currently, there are many different fuels pushing for recognition and eventual industry dominance, from ammonia and biofuels to LNG.

All have strengths and weaknesses. A number of operators have recently ordered new LNG-fuelled vessels for example, which operate with lower carbon dioxide and sulphur emissions than current vessels. But care is needed. Without dedicated engine systems, burning LNG fuel can lead to the release of methane – so called ‘methane slip’ – a greenhouse gas even more damaging to the environment than carbon dioxide. As a result, if many more vessels switch to LNG, the IMO may need to consider new rules to limit methane emissions in the face of growing concerns that the IMO targets can’t reasonably be met.

For vessel operators, this presents a significant dilemma: which fuel to use and when to stake their bets. The entire decision is one of uncertainty, a balance between conversion costs and future availability, fuel prices and environmental impact – all of which are relatively unknown. The only certainty when it comes to fuel use is that less is more.

Responsible resource use

It doesn’t matter what type of fuel a vessel uses. At the end of the day, to achieve the lowest costs and greatest sustainability, vessels should use as little fuel as possible. All fuels cost money and even extremely low-emission fuels, such as ammonia and hydrogen, incur a ‘carbon cost’ during production. Reducing fuel consumption not only lowers costs, but also reduces carbon emissions – both ‘upstream’ during production and at the ‘stack’ on the vessel.

There is a way to achieve this. A high-performance hull coating will reduce fuel consumption, regardless of the fuel type you choose. This will reduce both your fuel costs and your environmental impact, whether that impact occurs upstream or at the stack. 

How a high-performance hull coating can improve the business case for any fuel

As the business case for any fuel type relies on cost, the proven fuel-saving capability of high-performance hull coatings makes robust commercial sense.

Based on Actiguard technology, Hempel’s Hempaguard hull coatings are widely proven over many years to deliver a fast return on investment. No matter what happens to fuel prices or what fuel is used, a market-leading hull coating system such as Hempel’s Hempaguard X7 or MaX will reduce fuel consumption and associated costs and emissions.

When choosing a hull coating, speed loss reduction is key. Consider a VLCC. The average speed loss using a market average antifouling hull coating is 5.9 per cent over five years. In comparison, Hempaguard X7 has been documented (using the ISO 19030 method) to deliver a maximum speed loss of 1.4 per cent over five years. This corresponds to a fuel saving of 13.5 per cent compared to the market average antifouling hull coating. Even when using low-cost fuels, Hempaguard X7 could deliver an annual saving in the region of USD 1.3 million and a return on investment in under five months.

It’s worth noting that this is significantly faster than other currently available technologies, including Flettner rotors, as the Green Ship of the Future project found out. The project assessed what can be done right now with existing technologies to reduce fuel consumption by 'retrofitting' the current aging fleet. Direct comparisons showed that Hempaguard coatings provide as good as or higher savings than even Flettner rotors, but are far cheaper to install. As a result, Hempaguard coatings will deliver a return on investment within the first year, compared to around ten years for a Flettner rotor.

Hempaguard X7: How differing fuel prices would affect ROI on a VLCC
Base case  
Scenario 2:  Scenario 3: 
 Hempaguard X7 application cost  $500,000  $500,000  $500,000
 Fuel cost per ton  $350  $575  $440
 Cost difference (to base case)  $0 (0%)  $225   $90 
 Saving (compared to market average antifouling)   19.5%  19.5%  19.5%
 Cost saving (lifecycle/interval of 5 years)  $6,979,900  $11,467,000  $8,774,800
 Annual saving  $1,396,000  $2,293,400  $1,755,000
 ROI 4.3 months  2.6 months  3.4 months 

Example vessel: VLCC. Assumptions; daily vessel fuel consumption 80 tonnes, annual activity level 70 per cent. 

Appealing to investors and customers

When it comes to fuel choice, the selection of a high-performance hull coating is the only investment clearly shown to reduce both emissions and costs, whatever fuel is chosen. This makes it both a commercially and environmentally responsible choice.

A high-performance hull coating will lower costs for vessel operators and will make a vessel more attractive to charterers, who are naturally drawn to vessels that operate on lower cost fuel. It will also appeal to investors and customers, who are increasingly strident in their demand for demonstrated lower environmental impact. It is the only certainty in an uncertain landscape.