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Shipping decarbonisation requires $5bn investments to develop cleaner fuels

Thursday, 19 November 2020 | 13:00

A vast amount of research and development (R&D) at a $5bn cost is required to speed up the roll-out at an industrial scale of zero carbon fuels necessary for the shipping industry’s decarbonisation, according to the International Chamber of Shipping (ICS).

In its report Catalysing the Fourth Propulsion Revolution, the ICS proposed the creation of a $5bn fund, to be paid by a tax on marine fuels and overseen by the International Maritime Organization (IMO), to undertake the necessary research to develop cleaner marine fuels.

The shipping industry is a heavy polluter, with sulphur still being a key fuel for a sector that accounts of 90% of the global trade in goods; it consumes 4m bbl/day of crude oil, or 4% of global production; to put it into context, that is roughly a third of Saudi Arabia’s daily output.

ICS said the only way for the shipping industry to decarbonise requires the urgent adoption of fuels based on products like ammonia and hydrogen, as well as a wider rollout of electrification.

This would be the only way for the industry to reduce greenhouse gas (GHG) emissions that cause climate change; the UN-led Paris Agreement signed in 2015 established targets aiming to limit global warming to 1.5 degrees Celsius by 2100, compared with pre-industrial levels.

ICS asked governments to support and fund the creation of the International Maritime Research and Development Board; otherwise they would risk trillions of dollars of investment being misallocated, it said, making practically impossible for the sector to decarbonise.

“We therefore urge the IMO to back the proposal, which will have such wide-ranging benefits for shipping, and the global transport sector more broadly,” said ICS’ secretary general, Guy Platten.

“The scale of the financial challenge is as great as the technical challenge. We need certainty and action to avoid the approaching financial iceberg as we set course for a zero-carbon future.”

The IMO took up on the challenge this week; addressing the organisation’s Marine Environment Protection Committee on 16 November, its secretary general Kitack Lim said he was “looking forward to the consideration” of the proposals submitted by the industry body.

“[I am] Mindful of the need for further action to promote and facilitate more R&D in the area of clean fuels and technology,” said Lim.

Methanol is one of the products that could win the most from the shipping industry’s decarbonisation, and the industry is obviously encouraging the move.

Methanol fortunes have been helped by its biodegradable properties, in turn providing a sharp reduction in emissions from the most polluting gases used in transport.

According to figures provided by the industry, the use of methanol as a fuel could reduce carbon dioxide (CO2) emissions as well as eliminate sulphur oxide (SOx) and particular matter, in turn cutting nitrogen oxide (NOx) emissions by 60%, compared to traditional marine fuels.

Uptake has increased in recent years; methanol is available at over 100 ports worldwide, including at all major bunkering hubs.

A landmark for the methanol industry’s lobbying efforts in the marine fuels sector came last week when the IMO published guidelines on using ethyl and methyl alcohols, more commonly known as ethanol and methanol, as low-emission marine fuels.

Trade group the Methanol Institute quickly welcomed the decision.

“With new methanol guidelines, the industry truly has a choice that can help start to reduce emissions with the regulatory certainty it needs,” said MI’s chief operating officer (COO) Chris Chatterton.

While still a minority, some companies are making attempts to increase the use of methanol as a fuel for ships; last week, Proman Stena Bulk said it would build a third methanol-powered vessel, to be operational by the second half of 2022.

The vessel would consume 12,500 tonnes/year of methanol, as do Proman Stena’s pre-existing ships; the company is a joint venture between Stena Bulk and Proman Shipping.
Source: ICIS by Eashani Chavda,

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