Green hydrogen-based fuels set to be the backbone for decarbonising international shipping by 2050
The challenge of decarbonising shipping
Urgent action is necessary to accelerate the decarbonisation of the global economy in line with the goal of limiting global temperature rise to 1.5°C.
International shipping comprises 70% of global shipping energy emissions. If the international shipping sector were a country, it would be the sixth- or seventh-largest CO2 emitter.
The sector enables 80-90% of global trade. Bulk and container carriers, and oil tankers account for 20% of the global fleet. They are responsible for around 85% of the net GHG emissions associated with the sector.
Growth in trade equals higher energy demand
Meeting the growing energy demand will be a key challenge for the shipping sector which currently runs almost entirely on fossil fuels.
Factors such as global GDP, trade and manufacturing activity have been key drivers shaping energy demand in the international shipping sector.
Given the pivotal role of international shipping in the global economy, energy efficiency will not be enough. Renewable energy therefore has a key role to play in decarbonising this sector by mid-century.
Upcoming developments are set to accelerate the decarbonisation
The choice of fuel is highly dependent on factors such as supply, engine technology, net environmental performance and economic viability.
As the cost of renewable energy continues to fall and electrolysers and H2 storage costs fall progressively, green hydrogen-based fuels will become more competitive.
The upcoming development of the ammonia engine by 2023 will have a very positive impact on the sector and unlock an attractive market for renewable ammonia producers.
Renewable fuels are pivotal for a 1.5°C pathway
IRENA 1.5°C Scenario suggests a minimum renewable fuels share of 70% to be achieved by 2050. This would result in a CO2 emission reduction of 80% in comparison to 2018 levels.
A 1.5°C Scenario is based on four key measures:
Indirect electrification by employing e-fuels
Employment of advanced biofuels
Improvement of vessels’ energy efficiency
Reduction of sectoral activity due systemic changes in global trade dynamics.
Starting now energy efficiency needs to be effectively embraced
During low oil price periods, the shipping sector pays less attention to its energy usage. However, during high oil price periods, the shipping sector adapts, increasing its activity while using energy resources more efficiently, without the need for external market regulations.
The active adoption of energy efficiency (EE) measures will be critical to reduce energy demand and thus CO2 emissions in the immediate term.
Efficiency mandates must be tightened and suitable mechanisms developed for monitoring. Mandates and policies should be comprehensive, of high technical level and provide minimum standards in terms of vessel design and operation.
80% emission cut compared to 2018 levels possible
In the short term, advanced biofuels will play a key role in cutting emissions.
In the medium and long-term green hydrogen-based fuels will be critical. By 2050, shipping will require a total of 46 million tonnes (Mt) of green hydrogen. 73% will be needed for the production of e-ammonia, 17% for e-methanol and 10% will be used directly as liquid hydrogen.
E-ammonia will be the backbone for decarbonising shipping by 2050. 183 million tonnes of renewable ammonia for international shipping alone will be needed – a comparable amount to today’s ammonia global production.
International policy measures can raise climate ambition
A number of measures can help decarbonise the sector, e.g:
Moving from nearly zero CO2 emissions to net zero requires a 100% renewable energy mix by 2050.
Stakeholders associated with the shipping sector must engage, working to establish strategic partnerships with a common goal.
Realistic carbon levies need to come into effect. This will not only foster the deployment of renewable fuels but also prevent investment in fossil fuel infrastructure that risks becoming stranded.
It will also be critical to scale-up investment in the production of powerfuels in geographical areas with high renewable energy potential.