World shipping faces stiff competition to secure compliant fuel

CONTAINER shipping needs to make major changes to be compliant with new United Nations decarbonisation rules, reports IHS Media.


This means competing to secure shore-side production of eco fuels such as hydrogen, ammonia and methanol with other energy-hungry industries.


The current global supply of hydrogen, ammonia, and methanol would barely cover the needs of the shipping industry, even without stiff competition from other critical sectors such as manufacturing, oil refining, and the production of fertilisers, said the report.


"There seems to be this perception in the industry that if we have the demand, supply will be earmarked for us," said Kenneth Tveter, global head of green transition at Clarksons.


"But we are competing against every other industry that is also under pressure to decarbonise, and there are some big industries that are well advanced relative to us when it comes to consuming hydrogen-based fuels or derivatives of hydrogen," he said.


The shipping industry uses more than 300 million tons of fossil fuels every year, about five per cent of global oil production, and there is still no clear pathway toward replacing that volume with renewable fuels.


The Paris-based International Energy Agency (IEA), set up under the OECD) predicted that ammonia would be the dominant alternative fuel for shipping by 2050.


Said IEA analyst Elizabeth Connelly: "We have ammonia meeting at least 50 per cent of international shipping demand by 2050, and hydrogen about 15 per cent, while we see hydrogen better suited for shorter range coastal vessels.


"Part of the difficulty in decarbonising shipping is the low technology readiness level of key technologies for ocean-going vessels," Ms Connelly said. "In our net-zero by 2050 scenario, over 50 per cent of the emissions reduction for shipping are in the prototype or demonstration phase, and less than 10 per cent come from mature technologies.


"In particular, ammonia engines for ships are still in the prototype stage and there are technological challenges, such as the low flame speed that make it difficult to burn efficiently," she said.


Jonah Sweeney, European marine fuels analyst at oil price reporting agency Argus, told the IMO meeting that alternative fuels such as ammonia and methanol produced less energy than very low sulphur fuel oil (VLSFO). One ton of VLSFO produces 2.2 times more heat content than one ton of ammonia, and 2.1 times more than methanol.


"It is important when looking at alternative fuel options to compare like for like in terms of energy output, otherwise if you take the outright price of methanol, for example, you will have a substantial discount to VLSFO, but you will need about twice as much," Mr Sweeney said.


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World shipping faces stiff competition to secure compliant fuel
World shipping faces stiff competition to secure compliant fuel