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Global scenarios for fuel oil utilisation under new sulphur and carbon regulations Yousef M. Alshammari* and Moufid Benmerabet** *Faculty of Economics, Business and Statistics, University of Vienna, Oskar Morgen-Stern Platz, Vienna1090, Austria. Email: [email protected] **Department of Energy Studies, Division of Research, Organization of the Petroleum Exporting Countries (OPEC), Helferstorferstrasse 17, Vienna1010, Austria.

Abstract Fuel oil is an important derivative of crude oil used mainly in marine transport and power generation. The environmental impact of this important energy vector continues to be a major challenge due to its high sulphur and carbon content. In this work, we analyse the impact of sulphur cap and CO2 price on the inter-competition between fuel oil and alternative low-sulphur low-carbon fuels. It was found that the increase in crude oil prices enhances the cost-effectiveness of using middle distillates compared to using fuel oil with scrubbing systems. In addition, we found that imposing a CO2 price between $50–150/TonCO2 leads to reducing the emissions from fuel oil combustion by up to 87 per cent by 2040. In comparison with previous literature, we show that fuel oil will represent at least 56 per cent by 2030, under the low oil price scenario, if scrubbing systems are implemented in the shipping industry.

1. Introduction Fuel oil is an important petroleum product as a fuel, and a major feedstock for the petrochemical industry. According to the OPEC World Oil Outlook, marine transport and power generation sector accounts for around 80 per cent of global demand for fuel oil (Ban et al., 2016). The demand for fuel oil in marine transport is expected to increase significantly to reach around 6 mbbl/day in 2040. This increase is also expected to be associated with a decrease in its demand in power generation down to around 4 mbbl/ day in 2040 due to an increasing share for renewables and natural gas in the global electricity mix (Ban et al., 2016). Nonetheless, the combustion of fuel oil carries a significant environmental impact that originates primarily from its high carbon and sulphur content leading to the emissions of harmful pollutants. As a result, the international environmental regulations will limit the conventional use of fuel oil in combustion processes (International Maritime Organisation (IMO), 2017; Rogelj et al., 2016). To illustrate, the International Maritime Organisation (IMO) will require the © 2017 Organization of the Petroleum Exporting Countries. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

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shipping industry to use fuels with a maximum sulphur concentration of 0.5 per cent wt (International Maritime Organisation (IMO), 2017). Such a global decision could affect the of attractiveness of fuel oil market, while it increases demand on other low-sulphur fuels including middle distillates, liquefied natural gas (LNG), marine gas oil (MGO) and biofuels, that may be both expensive and not readily available. Furthermore, the Paris Agreement on climate change aims at reducing global greenhouse gas emissions in order to limit the earth’s rising temperature to 3.5 per cent). Scrubbing systems make use of seawater to absorb the sulphur dioxide from the flue gas, converting it to sulphate which is a natural seawater constituent, and hence, it can be safely discharged into the sea (Nyman and Tokerud, 1991). The use of CCS and scrubbing systems will add additional costs to the costs of fuel oil, and that requires detailed economic assessment of future scenarios for feasible transition to low-carbon and lowsulphur fuels. This shows that there is an immediate need to understand the impact of the recent carbon and sulphur constraints on fuel oil supply. Hence, our work assesses the impact of sulphur and carbon constraints on the economic competitiveness of using fuel oil compared with alternative low-sulphur fuels and low-carbon fuels. In particular, it analyses inter-competition among fuel oil with scrubbing systems, middle distillates and LNG, under varying crude oil price scenarios while estimating the minimum carbon price to make CCS economically feasible. 3. Methods and modelling 3.1. Modelling package This study is conducted using the linear programming optimisation model (MESSAGE) used in many previous studies (Schrattenholzer, 1981; Messner and Schrattenholzer, 2000; Klaassen and Riahi, 2007; International Institute of Applied Systems Analysis (IIASA), 2013; Alshammari and Sarathy, 2017). This model solves the objective function for the least cost under specified environmental and economic constraints, in order to determine the most cost-effective energy mix. A discount rate of 4 per cent was fixed throughout the analysis conducted in this work. The model enables determining the optimum allocation of resources, diversification of energy supplies, and reduction in energy imports. The statistical data supplied to the model are explained in sections 3.2–3.5 which include energy demand, carbon and sulphur emissions, conversion efficiency, fuel prices and resource capacity. MESSAGE generates the optimum solution to meet the projected energy demand at the lowest cost, while meeting the set environmental or economic targets. This enables then evaluating of investment requirements, and assessing economic benefits and investment decisions. Further details about this model are provided in our previous work (Alshammari and Sarathy, 2017). 3.2. Demand projections According to the OPEC World Oil Outlook (Ban et al., 2016), 80 per cent of global demand for heavy fuel oil is derived from the marine transport and the power generation sectors. Hence, these two sectors have been used to assess meeting future demand for OPEC Energy Review December 2017

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Scenarios for utilisation of fuel oil

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Figure 1 Fuel oil demand (Ban et al., 2016). [Colour figure can be viewed at wileyonline library.com]

heavy fuel oil under new sulphur and carbon constraints. Figure 1 shows the global demand projection for fuel oil in power generation sector which has been obtained from the World Oil Outlook 2016 (Ban et al., 2016). Global demand of fuel oil in power generation is expected to undergo a moderate decline from 5.29 mbbl/day in 2016 to 4.03 mbbl/day in 2040 (Ban et al., 2016). This decline may be attributed to the rise of gas reserves, increased reduction targets on CO2 and emissions, and an increase in the share of renewable sources of energy in stationary power generation. Figure 1 also shows the global demand for fuel oil in the marine sector which has been estimated based on the projections made on transport energy demand conducted by the OECD (Conti et al., 2016). Marine transport demand was assumed to account for 9.9 per cent of the total transport energy demand according to historical data from the World Energy Scenarios report published by World Energy Council (Frei et al., 2013). This assumption enables investigating the inter-competition between different marine fuels to meet the transport energy demand of the marine industry. The global demand for fuel oil in the marine industry is expected to rise from 3.94 mbbl/day in 2015 to reach 5.77 mbbl/day in 2040 based on the assumption made and the data reported by the OECD (Conti et al., 2016). 3.3. Price scenarios This study conducts a price-based optimisation of fuel supply for marine and power generation sectors. Fuel prices are significantly affected by the prices of crude oil, and hence it was necessary to consider the variation of crude oil prices over the next decades. © 2017 Organization of the Petroleum Exporting Countries

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The US Energy Information Administration (EIA) have developed projections for crude oil prices over the next decades (Conti et al., 2015) under three different scenarios; the low oil price (LOP) scenario, the reference case, which is referred to in this study as the mid-oil price (MOP) scenario and the high oil price (HOP) scenario, shown in Fig. 2. These scenarios were used in this work to assess the variation in fuel prices which are interrelated with crude oil prices. Furthermore, the OPEC crude oil price projection until 2040 is used and it is found to be within a proximity to the EIA low oil price scenario, Fig. 2. Future prices of fuel oil were estimated, as shown in Fig. 3, based on the price of crude oil at different scenarios assuming that fuel oil accounts for 84 per cent of the crude oil price. In addition, future prices of middle distillates, Fig. 4, and natural gas, Appendix: Fig (A) under different crude oil price scenarios were obtained from the EIA projections (Conti et al., 2015). The forecast prices of natural gas were used to assess the potential price of LNG which is assumed to be double the price of natural gas, as shown in Fig. 5. 3.4. Fuel utilisation technologies The technologies used in this model, for the shipping and power generation sectors, make use of different fuels to meet sulphur and carbon emissions. To meet the sulphur cap, new technologies were added into the model that include the use of scrubbing systems to remove sulphur from exhaust gas. Alternatively, low-sulphur middle distillate and LNG are added to the model to optimise the technology selection. 300

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Figure 2 Crude oil price scenarios (Conti et al., 2015; Ban et al., 2016). [Colour figure can be viewed at wileyonlinelibrary.com] OPEC Energy Review December 2017


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Figure 3 Fuel oil prices under difference crude oil price scenarios.

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Figure 4 Middle distillate prices under different crude oil price scenarios (Conti et al., 2015).

For the power generation sector, it is assumed that carbon emissions can be curbed by the use such technologies as CCS, and Integrated Gasification Combined Cycle (IGCC) with CCS. The cost for each technology is shown in Table 1 which includes the fuel projected prices along with the technology-fixed costs. 3.5. Carbon and sulphur emissions Tables 2 and 3 show emissions of sulphur and carbon from shipping and power generation technologies used in the model. Sulphur emissions are linked to the marine sector, Table 2, while carbon emissions are linked to the power generation, Table 3. © 2017 Organization of the Petroleum Exporting Countries


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23.00 LNG price [$/MMBTU]

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Figure 5 LNG prices under different crude oil price scenarios. Table 1 Costs data for fuel utilisation technologies Technology

Acronym

Cost

Reference

HFO with scrubbers (shipping)

ShipwtScrb/MF

HFO without scrubbers (shipping) LNG as a marine fuel (shipping) Middle distillates (shipping) IGCC with CCS (power generation)

Comb_wo_CCS/ Elec LNG_Ship/MF

Price of HFO in Fig. 3 + Cost of Sulphur scrubbing ($1666.67/TJ) Price of HFO in Fig. (3)

De Priest and Gaikwad (2003) –

HFO with CCS (power generation) HFO without CCS (power generation)

Comb_CCS/Elec

Price of LNG in Fig. (5)

Marine_Middle_ Dist/MF IGCC_H2_Comb/ Elec

Comb_wo_CCS/ Elec

Price of Middle Distillates in Fig. (4) Price of HFO in Fig. (3) + Cost of IGCC_CCS ($4444.44/TJ) Price of HFO in Fig. (3) + Cost of CCS ($6111.11/TJ) Price of HFO in Fig. (3)

– Conti et al. (2016) Rubin et al. (2007) Rubin et al. (2007) –

This assumption was made so that sulphur emissions can be reduced from the marine transport sector and CO2 can be mitigated in power generation sector. The sulphur emissions have been estimated using current high sulphur content in fuel oil (3.5 per cent) and future sulphur content target (0.5 per cent) (Fig. 6). The emissions generated using the low-sulphur fuel oil were used to cap emissions in MESSAGE to enable the OPEC Energy Review December 2017


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Table 2 Shipping technologies linked with SO2 emissions Technology

SO2 emission (kTon/PJ)

HFO with scrubbers (90% efficiency) HFO (3.5%) without scrubbers LNG Middle distillates (1%) Low-sulphur fuel oil (0.5%)

0.188 1.88 0 0.486 0.268

Table 3 Power generation technologies linked to CO2 emissions (den Broek et al., 2008; Alshammari and Sarathy, 2017) CO2 emissions (kTon/PJ) Technology

2020

2030

2040

IGCC with CCS HFO with CCS (Comb_CCS/Elec) HFO without CCS (Comb_wo_CCS/Elec)

40.43 40.43 216.71

32.42 32.42 216.71

26.92 26.92 216.71

model to optimise selection of alternative technologies that can meet the sulphur emissions cap. Estimation of the sulphur emissions was made based on the fuel type and sulphur concentration. In addition, carbon emissions from heavy fuel combustion and IGCC plants are estimated between 2015 until 2040 based on recent data published in the literature (De Priest and Gaikwad, 2003). A global price on CO2 was applied to determine the minimum price needed to reduce CO2 emissions using CCS and IGCC technologies in the power generation sector. 4. Results 4.1. Business as usual case The Business as Usual (BAU) case puts no constraints on carbon or sulphur emissions. However, it makes assumptions on resource availability including availability of LNG within the resource fuel mix. As shown in Fig. 7, and Appendix: Figs (B and C), the BAU case was investigated under different crude oil price scenarios; the LOP scenario, the MOP scenario, and HOP scenario. Under the BAU scenarios, fuel oil remains the most cost-effective fuel for shipping industry along with LNG which constitutes a limited share due to placing a cap of around 500 million Ton per year on its © 2017 Organization of the Petroleum Exporting Countries


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Sulphur emissions [kTon/PJ]

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Figure 6 SO2 emissions scenario BAU vs. 0.5% Cap under same demand. [Colour figure can be viewed at wileyonlinelibrary.com]

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Figure 7 BAU scenario under low oil price. [Colour figure can be viewed at wileyonline library.com]

consumption. This cap was made as it was reported to be the maximum share of LNG predicted in the marine fuel supply mix by 2030 (Wang, 2014). This analysis assumes global fuel prices without taking into consideration local fuel prices that could be different from the international markets. Local fuel prices may be affected by national subsidies, resource availability and production costs. OPEC Energy Review December 2017


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4.2. Sulphur emission cap and CO2 prices The impact of capping sulphur emissions in marine transport through implementation of the low-sulphur fuel has been investigated under different crude oil scenarios. The variation of fuel supply in this analysis is purely dependent on its cost-effectiveness. It is found that the implementation of the 0.5 per cent sulphur limit on marine fuels in 2020 will decrease the use of heavy fuel oil without implementation of scrubbing systems, Fig. 8. On the other hand, there is an increasing supply of fuel oil with implementation of scrubbing systems which can achieve 90 per cent sulphur removal using seawater, Fig. 8. Installation of scrubbing systems will lead to almost doubling the price of using heavy fuel oil as a marine fuel, and thus, its price will be comparable to the price of middle distillates with low-sulphur content. To meet the sulphur reduction targets, it is found the shipping energy demand can be met by using 2.67 MMBOE of heavy fuel oil with scrubbing systems in 2020, around 1.00 MMBOE of middle distillates, and 1.18 MMBOE of LNG in 2020, Fig. 8. The share of marine middle distillates increases to 1.16 and 2.55 MMBOE in 2030 and 2040, respectively, while the share of LNG undergoes a moderate increase, as shown in Fig. 8. The cost-effectiveness of supplying different fuels supply varies at different crude oil price scenarios. For instance, the increase of oil prices in the MOP scenario, Fig. 9, leads to decreasing the use for middle distillates by 0.15 MMOBE and 0.21 MMBOE in 2030 and 2040, respectively. The use of fuel oil with scrubbing systems increases under higher crude oil price scenarios, and it increases from 3.09 MMBOE, in 2020, to 4.27

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Figure 8 Supply mix under the low crude oil price scenario. [Colour figure can be viewed at wileyonlinelibrary.com] © 2017 Organization of the Petroleum Exporting Countries


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LNG_Ship/MF

Marine_Middle_Dist/MF

Figure 9 Supply mix under the mid crude oil price (MOP) scenario. [Colour figure can be viewed at wileyonlinelibrary.com]

MMBOE, in 2040, Fig. 9. This shows it is more cost-effective to use heavy fuel oil with scrubbing systems than to use middle distillates under the MOP scenario while meeting the environmental regulations. Under the third crude oil price scenario, the HOP scenario, Fig. 10, the share of supplying and using fuel oil with scrubbing systems increases continuously from 2.67 MMBOE in 2020, to 3.13 MMBOE and 3.81 MMOBE in 2030 and 2040, respectively. There is also a continuous increase in the supply for LNG and middle distillates between 2020 and 2040, from 1.18 to 1.26 MMBOE for LNG, and from 0.99 to 1.41 MMBOE for middle distillates. Compared with the previous scenarios in Figs 8 and 9, this scenario shows that the cost-effectiveness of middle distillates increases compared with the cost-competiveness of using fuel oil with scrubbing systems under very high crude oil prices. 4.3. Effects of carbon price The effect of carbon price on using fuel oil in the power generation has also been investigated, as shown in Figs 8–10. The CO2 price is assumed to be introduced in 2020 at $50/TonCO2 rising to $150/Ton CO2 in 2040 at a rate of $5/TonCO2 annually. This assumption was found to be sufficient to reduce CO2 emissions by application of CCS in 2020 followed by IGCC-CCS from 2025 through 2040, as shown in Fig. 8 for the low crude oil scenario. The increase in crude oil prices in Figs 9 and 10 does not lead to any OPEC Energy Review December 2017


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Figure 10 Supply mix under the high crude oil price (HOP) scenario. [Colour figure can be viewed at wileyonlinelibrary.com]

changes in the fuel oil consumption in power generation. This is due to the fact both natural gas and coal are excluded from the inter-competition with fuel due to their significantly lower costs compared to the costs of fuel oil even when combined with CCS. It is found that a minimum price of $50/Ton CO2 is required to make CCS economically competitive while IGCC-CCS requires a minimum price of $100/Ton CO2. Figure 11 shows the impact of CO2 price on the level of CO2 mitigation. It is found that imposing a CO2 price between $50/Ton and $150/Ton leads to reducing the emissions from fuel oil combustion by 81 per cent in 2020, 85 per cent in 2030 and 87 per cent in 2040, compared with the BAU case. 4.4. Effects of crude oil price Crude oil prices showed a significant effect on the inter-competition between the marine middle distillates and the use of fuel oil with scrubbing systems when implementing the IMO sulphur concertation cap (0.5 per cent). The increase in crude oil prices in the MOP scenario, Fig. 9, scenario leads to decreasing the share of middle distillates and increasing the use of fuel oil with scrubbing systems. No effects are observed on the use of LNG at varying crude oil prices. It seems that there is a limit until which the use of © 2017 Organization of the Petroleum Exporting Countries


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CO2 emissions [millionTon/Year]


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Figure 11 Effects of CO2 price on emission reduction. [Colour figure can be viewed at wileyonlinelibrary.com]

scrubbers remains economical, as shown in the MOP scenario in Fig. 9, after which the use of middle distillates becomes more cost competitive at the HOP scenario, Fig. 10. The assumptions made in this analysis assumes elasticity of demand and does not consider sudden increase in fuel prices due to shortage of supply of certain fuels over others. 4.5. Economic implications of new regulations Based on the fuel supply mix projected in Figs 8–10, the difference in the costs between the BAU case and transition scenarios, where the IMO sulphur cap is implemented, has been estimated. The difference in costs accounts for the investments required to make use of scrubbing systems, LNG and middle distillates in the marine sector. It is found that the investments required will vary depending on the crude oil price scenario, Fig. 12. The investment increases marginally in the MOP scenario, Fig. 12, compared with the LOP scenario but they drop significantly during the high-price scenarios. The increase in the investment in the MOP scenario is attributed to the increase in the use of scrubbing systems compared with middle distillates, Fig. 9. These investments are mainly driven by the changes in the marine fuel mix as the power generation does not change significantly at different oil price scenarios. The total investments required, between 2020 and 2040, are $230 billion in the LOP scenario, $248 billion in the MOP scenario and $127 billion in the HOP scenario. These costs account for the additional costs for the use of middle distillates, scrubbing systems and carbon capture systems to meet both CO2 and sulphur reduction targets. OPEC Energy Review December 2017


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100 90 80 Billion$/year

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Figure 12 Total global investment required under IMO Sulphur cap and specified carbon price. [Colour figure can be viewed at wileyonlinelibrary.com]

As investments in this analysis are represented in the cost difference between the BAU and transition scenarios, lower investments suggest that this cost difference becomes smaller as shown in the HOP scenario, Fig. 12. This was found to happen as oil prices increase in the HOP scenario where the costs in the BAU become closer to the costs of the low-sulphur middle distillates and scrubbing systems. On the other hand, there is a bigger cost difference between the BAU and transition scenarios under the LOP and MOP scenarios due to the fact that fuel oil prices are much lower than the prices of middle distillates and scrubbing systems which leads to bigger investment requirements, as shown in Fig. 12. The reason for the lower investments under the HOP scenario compared with the LOP and MOP scenario can be justified by the price projection scenarios for fuel oil and middle distillates, as shown in Figs 3 and 4. It is shown that under the low and medium oil prices, LOP and MOP scenario, the difference between the fuel oil and middle distillates prices is significantly large. However, the increase in oil prices, in the HOP scenario, shows that the prices of fuel oil will increase significantly to be closer to the prices of middle distillates. Under this scenario, the transition costs from fuel oil to middle distillates will be significantly smaller compared with the LOP and HOP scenarios, and that explains the investment requirements data shown in Fig. 12. The increase in fuel costs will ultimately increase the costs of shipping services needed for the shipping industry to make feasible investments in low-sulphur fuels. Installation of scrubbing systems will double the costs per unit of energy and that may double the costs associated with shipping and marine transport services. One potential option is to impose a fuel tax on high sulphur fuels which would enable feasible and © 2017 Organization of the Petroleum Exporting Countries


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economic investments in low-sulphur transition in for the shipping industry. In addition, it is necessary to consider the costs associated with environmental pollution resulting from sulphur emissions. If that factor is considered, then the economic viability of such investments may be enhanced. The percentage of investment required by the marine fuel sector is shown in Fig. 13, showing an increase from to 0.80 between 2020 and 2040 under the LOP and MOP scenarios. However, the HOP scenario shows a trend where the share of investment goes through a maximum of 0.45, in 2030, and then it declines to 0.36, in 2040, Fig. 13. The increase in the percentage of investment in marine fuels is justified by the increase in low-sulphur fuel supply which raises the production costs, under the LOP and MOP scenarios. Additional figures (D-K) in the appendix provide further data on the production costs, and investments required under BAU and transition scenarios. 0.90 0.80 0.70 0.60 0.50 %

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Figure 13 Percentage of marine transport costs. [Colour figure can be viewed at wileyonline library.com]

5. Conclusion and policy recommendations This study shows that the new regulations of sulphur and carbon reduction targets will have impact on the supply of heavy fuel oil in the marine and power generation sectors. Our analysis also shows that it is more cost-effective to use fuel oil with scrubbing than to use middle distillates under the MOP scenario which enables meeting the environmental regulations. The cost-effectiveness of middle distillates increases while OPEC Energy Review December 2017



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the use of fuel oil with scrubbing systems decreases under the high crude oil price scenario. In the power generation sector, IGCC with CCS was found to be the best technology to make clean use of HFO compared with direct combustion due to its competitive costs compared with HFO-CCS. This assumes a policy that excludes the use of both coal and natural gas in power generation. IGCC is assumed to be available after 2025 until which fuel oil can be used with CCS if carbon reduction targets are set. To meet the sulphur reduction targets in the marine sector, installation of scrubbing systems is recommended while supporting growth for LNG markets as a marine fuel. It also seems that imposing a fuel tax on high sulphur fuels could be a feasible and economic option in the transition towards low-sulphur fuels. Furthermore, including the costs associated with environmental pollution when assessing the economic viability of low-sulphur fuel investments is another important consideration. The impact of CO2 pricing shows that energy efficiency measures are important in mitigating CO2 emissions. A minimum carbon price of $50/Ton CO2 was found to be required to make CCS economically competitive, but this price increases to $100/Ton to make IGCC-CCS economically competitive. The carbon price range in this study, $50– 150/TonCO2, was found to reduce the emissions from fuel oil combustion up to 87 per cent in 2040, compared with the BAU emissions. That leads to the conclusion that fuel oil can be a part of the energy mix in both marine and power generation sectors under sulphur and carbon constraints provided that necessary emission control measures are implemented. That will require investments in both technology developments, applications and implementation of necessary policy incentives. It is also recommended to support the development of IGCC technology to make it commercially available by 2025 as it enables more cost-effective use of fuel oil when coupled with CCS under stringent carbon pricing regulations. Acknowledgements The authors acknowledge financial support from the OPEC Visiting Research Fellowship Programme to carry out the research project. Mr. Y. Alshammari also expresses his thanks to the IAEA Planning and Economic Studies Section for training and provision of the MESSAGE energy model. References Alshammari, Y.M. and Sarathy, S.M., 2017. Achieving 80% greenhouse gas reduction target in Saudi Arabia under low and medium oil prices. Energy Policy 101, 502–511. Argyros, D., Raucci, C., Sabio, N. and Smith, T., 2014. Global Marine Fuel Trends 2030. Lloyd’s Register and University College London, London, UK. © 2017 Organization of the Petroleum Exporting Countries


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Appendix

NG 11.00

LOP scenario

10.00

MOP scenario HOP scenario

$/MMBTU

9.00 8.00 7.00 6.00 5.00 4.00 3.00 2010

2015

2020

2025

2030

2035

2040

2045

Figure A Natural gas prices under difference crude oil price scenarios (Wang, 2014). [Colour figure can be viewed at wileyonlinelibrary.com]

14,000 12,000

$/year

10,000 8000 6000 4000 2000 0 2015

2020

Comb_wo_CCS/Elec

2025

2030

Ship_wo_Scrb/MF

2035

2040

LNG_Ship/MF

Figure B BAU Scenario under Mid oil price. [Colour figure can be viewed at wileyonlinelibrary.com] OPEC Energy Review December 2017


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14,000 12,000

$/year

10,000 8000 6000 4000 2000 0 2015

2020

Comb_wo_CCS/Elec

2025

2030

2035

Ship_wo_Scrb/MF

2040

LNG_Ship/MF

Figure C BAU Scenario under the high oil price scenario. [Colour figure can be viewed at wileyonlinelibrary.com]

450 400

Billion$/year

350 300 250 200 150 100 50 0

2020 LOP scenario

2030 MOP scenario

2040 HOP scenario

Figure D Total production costs [$/year] under BAU scenario. [Colour figure can be viewed at wileyonlinelibrary.com]



282


450 400 Billions$/year

350 300 250 200 150 100 50 0

2020 LOP scenario

2030 MOP scenario

2040 HOP scenario

Figure E Production costs [$/year] under Sulphur cap and CO2 price. [Colour figure can be viewed at wileyonlinelibrary.com]

LOP scenario

MOP scenario

HOP scenario

80 70

Billion$/year

60 50 40 30 20 10 0

2020

2030

2040

Figure F Investments in marine fuels and scrubbing systems only [$/year]. [Colour figure can be viewed at wileyonlinelibrary.com]



283


LOP scenario

MOP scenario

HOP scenario

300

Billion$/year

250 200 150 100 50 0

2020

2030

2040

Figure G Total transition costs under new Sulphur cap in marine transport. [Colour figure can be viewed at wileyonlinelibrary.com]

LOP scenario

MOP scenario

HOP scenario

300

Billion$/year

250 200 150 100 50 0 2020

2030

2040

Figure H Marine Transport production costs under BAU. [Colour figure can be viewed at wileyonlinelibrary.com]



284


LOP scenario

MOP scenario

HOP scenario

180 160

Billion$/year

140 120 100 80 60 40 20 0

2020

2030

2040

Figure I Total production costs of electricity under new CO2 prices. [Colour figure can be viewed at wileyonlinelibrary.com] LOP scenario

MOP scenario

HOP scenario

160

Billion$/year

140 120 100 80 60 40 20 0

2020

2030

2040

Figure J Power generation production costs under BAU. [Colour figure can be viewed at wileyonlinelibrary.com]



285


LOP scenario

MOP scenario

HOP scenario

40

Billion$/year

35 30 25 20 15 10 5 0 2020

2030

2040

Figure K Investments required in power generation sector. [Colour figure can be viewed at wileyonlinelibrary.com]

