A Roadblock or Stopgap: The Functional Impact of Alternative Green Fuels Used by The Global Shipping Industry.

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By Kavinda Ratnapala

In 2018 the International Maritime Organization’s (IMO) greenhouse gas strategy was released and made specific reference to realising “a pathway of CO2 emissions reduction consistent with the Paris Agreement (COP21) temperature goals”. The strategy adopted a staggered approach towards realising the ultimate goal of reducing emissions by at least 70% by 2050 compared to 2008 emission levels. It is important to note that these commitments do not realise net-zero by 2050 which in itself is a grave shortcoming on the part of the planet’s supreme maritime body.

As a part of the progressive approach which quintessentially opposed risking the daily functioning of the global maritime supply chains. The concept of green shipping -not emission-free- was put into overdrive and this was to be attained through the use of fuels which has ‘low’ (65-80% reduced emissions) and ‘very low’ (80-95% reduced emissions) GHG emissions compared to the use of fossil fuels. The reasoning behind this adoption was that it would be a “bridging fuel” which could be used until truly green, sustainable and emission-free forms of energy could be used for powering ships.

The most common alternative fuels currently in use are biodiesel, green methanol which includes both bio-methanol and e-methanol, green or e-ammonia (henceforth the greener fuels) and lastly Liquid Natural Gas (LNG). Of the four, LNG is the weakest performer on an emission front and has been accepted as such by shipping liners such as Maersk. Which has opted not to invest in what the company terms a “transitional fuel” and leapfrog to using a combination of the greener fuels. Giving further indication as to the expected limits of the development in fuel technology, the company has placed orders for a total of 12 new 16,000 TEU green methanol enabled vessels. This gives credence to the argument that the greener fuels, may in function be a roadblock to realising emission-free sea transport, due to the entrenchment sunk capital creates. Furthermore, it is important to keep in mind the power of inertia that these investments create. The investment in the greener fuel supply chain and the entrenchment via long term fuel contracts, for example, to secure a steady supply of green methanol required by the new fleet raises questions as to the shipping industry’s overall commitment to invest in sustainable and emission-free sources.

The primary benefit of greener fuels is that their use case has already been established with marked gains on the reduced emissions front. However, what is not as well discussed is that these fuels have a combination of all or some of the following material challenges. First, adequate stocks of each fuel are not universally available with supply limited due to a combination of insufficient fit for purpose infrastructure and greener fuel suppliers. This in turn curbs shippers from making the necessary changes to sail ships that require such fuels. Second, as they are all commodities, they are exposed to the same price variations as traditional fuels. Green ammonia is expected to costs four times as much as heavy fuel oil that ships use today. Third, the fuels need to be responsibly sourced with monitoring required to ensure that the production process of the greener fuels does not include, for example, LNG which is most commonly used for industrial heating. This would significantly contribute to the scope 2 emissions of the industry. Fourth, the safety and hazard profiles of these fuels are considerable. While green ammonia is an emission-free energy source, the health and environmentally corrosive implications of ammonia are well known. Fifth, the geopolitical uncertainties and the unique intricacies of each of these fuel types need to be comprehensively studied with deliberate effort needed to be taken to diversify and shockproof supply chains. The unexpected and sudden crunch faced by the EU due to its dependence on Russia’s LNG supply is a pertinent example.

Implications for the Commonwealth.

Of the 54 commonwealth members, 47 countries have a coastline and as such engages in transcontinental shipping in varying magnitudes. Moreover, due to the historically significant role, the British Royal Navy played in each of these nations’ pasts. It is pertinent to argue that ships accessing these nations’ coastal waters have had a disproportionate impact on their historical developments. And can be expected to continue to do so well into the future. As such, it is a space and point of mutual interest which in my point of view merits being raised in future Commonwealth forums.

Furthermore, as a predominantly coastal community of nations heavily affected by global sea-level rise, coastal erosion and prone to other climate change compounded disasters. It would not be a stretch to argue that the Commonwealth has an additional moral case for engagement and should seek a common platform for action. With the International Maritime Organization’s (IMO) greenhouse gas strategy, wholly inadequate in dealing with the cataclysmic consequences of not getting to net zero.  I suggest the commonwealth secretariat seek consultations with its member countries prior to the next CHOGM summit scheduled for June 2022 and take steps to gain buy-in for the forum to address maritime GHG emissions. While each of the 54 members states will have local priorities which may be varied to deal with at the start. I believe the ability of the Commonwealth to evolve with time may be the defining factor in assisting member nations to draft a timely regulatory framework to govern maritime emissions within their national boundaries.

In conclusion, I present the following shortcomings in the IMO’s current emission strategy, as a common global sticking point that may be a possible set of starting blocks for further action.

  1. Establishing a commonwealth standard for accounting for the lifecycle greenhouse gas emissions from marine fuels.
  2. Establishing a deadline for the acceptance of fossil-fuelled powered ships entering commonwealth waters.
  3. Establishing a commonwealth wide carbon trading mechanism, from which ships sailing in commonwealth waters will be required to offset their carbon emissions.
  4. Defining and establishing green corridors where merchant ships will not be able to enter, to safeguard marine ecosystems from spills and hazards such as the calamitous August 2020, Mauritius oil spill.

To access the full portfolio of articles see here.

Kavinda Ratnapala, has worked in a range of Corporate and Not for Profit roles from which he ideates and writes in the Sustainability and Governance space whilst occasionally dabbling in matters of ethics and geopolitics of interest. He holds a Master in Environment and Sustainability with a Bachelor in International Relations.

You can email the author at kavindareads@gmail.com or find him on Twitter under the handle @kavinda937 or connect on LinkedIn.

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