The Getting to Zero Coalition has stated that zero emission fuels need to make up 5 per cent of the international shipping fuel mix by 2030 to enable decarbonisation in line with Paris goals.
A quantified target is needed to help mobilise commitment and action across stakeholders. This would:
– Enable energy companies to have greater confidence in demand when planning green fuel development projects
– Allow cargo owners to be mobilised to pay a premium for zero emission fuels on a corresponding percent of their freight
– Investors could quantify the amount of investment needed across the value chain,
– Shipowners could plan investments in new builds and retrofits, and
– Regulators could be called on to ensure a level playing field is in place to enable the transition.
To reach the 5 per cent target, The Getting to Zero Coalition sees three subsegments of shipping that could move first and achieve this:
1. Container shipping is likely the first shipping sector to start to decarbonise as a few ports/routes account for a large share of volume, and the sector is closer to the end consumer. For example, 10 large deep-sea routes accounted for 7 million tons of CO2 in 2018. These 10 routes could make up 0.8 per cent of the total 5 per cent needed.
2. If ammonia is selected, ammonia and LPG tankers are well suited to be first movers, as storage, systems and crew are well adapted to this fuel. This is also true for ships used to transport other hydrogen-derived fuels. Ammonia transport alone accounted for approximately 0.1 percent of emissions in 2018. Together with LPG tankers, the sum could be 2 percent of the total 5 percent needed. This is an upper bound and would require high rates of transport demand growth.
3. Niche international routes (non-container shipping) with high likelihood of having enabling conditions for first movers of zero emission fuels – for example Chile-US, Japan-Australia, Dubai-Singapore, Australia-Singapore, Denmark-Norway – could provide another 2 per cent.
The Getting to Zero Coalition’s definition of “zero carbon energy sources” is intended to be inclusive of fuels derived from zero carbon electricity, biomass and the use of carbon capture and sequestration. It excludes, however, energy sources derived from carbon capture and utilization based on the combustion of fossil fuels. The definition includes green hydrogen and its derivatives, such as ammonia and methanol, blue hydrogen and its derivatives, as well as sustainable biofuels.
In terms of scalability, the hydrogen-derived fuels have the biggest long-term potential for rapid scaling in the following decades and should be a significant part of the 2030 fuel mix. A key question is therefore: Will it be possible to supply enough hydrogen-derived fuels for international shipping to enable up to a 5 percent penetration by 2030?