2024A-OS15-1 The Cost Benefit Analysis of Alternative Fuel Use for GHG Emissions Reduction in International Shipping Industry

Abstract

For the reduction of greenhouse gas (GHG) emissions from international shipping, there is a growing interest in the use of alternative fuels that do not emit CO2, such as hydrogen and ammonia. The practical implementation of zero-emission ships utilizing these fuels is under consideration, with a target timeframe around 2030. In this study, the Life Cycle Assessment (LCA) method was employed to calculate the substantial amounts of GHG emission reduction and introduction costs associated with the use of alternative fuels. Furthermore, a cost-benefit analysis using these values was conducted to evaluate the effectiveness of alternative fuel utilization.

As a result, it has been demonstrated that to reduce GHG emissions throughout the entire life cycle, it is necessary to use alternative fuels derived from renewable energy sources such as green hydrogen and green ammonia. However, it has also become apparent that the introduction costs of alternative fuels can be significantly higher compared to the use of fossil fuels. The results of a cost-benefit analysis comparing the benefits of reducing GHG emissions from the use of alternative fuels and procurement costs in 2030 were significantly negative, and it was indicated that the use of alternative fuels does not bring benefits to humanity.