Assessing the Economic Feasibility of Long-Distance LCO2 Shipping for Carbon Capture and Storage

Abstract

This study evaluates the economic feasibility of using LNG, ammonia, and hydrogen as ship fuels for transporting CO2 by sea from South Korea to Australia. Two scenarios were considered, with annual CO2 transport amounts of 2 million and 5 million tons. The analysis focused on calculating the capital expenditures (CAPEX) and operating expenses (OPEX) for each fuel type. The results indicate that LNG remains the most economical choice for largescale maritime CO2 transport due to its relatively low CAPEX and OPEX compared to ammonia and hydrogen. Even when considering the carbon trading cost to offset greenhouse gas emissions from LNG's tank-to-wake (TtW) emissions, LNG still shows a competitive economic advantage. However, as stricter carbon regulations may raise the price of carbon credits in the future, LNG’s economic benefits could diminish. This study estimates that for ammonia and hydrogen to become competitive with LNG in terms of transport costs, ammonia prices must decrease by approximately 59% to 0.15 US$/kg, and hydrogen prices need to decrease by 95% to 0.25 US$/kg. While ammonia appears more likely to achieve economic viability than hydrogen, significant technological advancements and cost reductions are necessary for both fuels to become viable alternatives to LNG. In conclusion, this study reaffirms LNG’s current economic superiority in CO2 maritime transport but highlights the potential for ammonia and hydrogen as future zero-carbon alternatives, provided their cost and technological challenges are addressed. Continued monitoring of the economic and environmental impacts of these fuels is essential for the long-term success of CCS projects.