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Deep Dive into Decarbonizing Shipping

This is a deep dive into decarbonizing shipping—if you would like to read a general overview on shipping, please check out our shipping page here.

Container ship in the sea at winter time
Aerial view of container ship in the sea at winter time © a_medvedkov / Adobe Stock

When we discuss decarbonizing shipping, the first challenge is which fuel will best fit a zero carbon world. Plenty of options are under discussion as the fuel of the future. In a mapping exercise, the Global Maritime Forum found that the leading candidates in terms of active trials and testing are hydrogen, ammonia, methanol and biofuels.

Both hydrogen fuel cells and ammonia are electrofuels, which can be produced through a process called electrolysis. If done with renewable resources, both fuels can be true low or zero-emission fuels. Unlike methanol neither fuel relies on carbon dioxide for production that would depend on a mostly theoretical carbon recapture to zero out. While biofuels have already been used in some ships effectively, depending on the source their use on large scale raises greater questions about potential  deforestation and land use.

Since both fuels are less energy dense than fossil fuels, ships using ammonia or hydrogen may require additional refueling stops for ships traversing the usual shipping routes. But with the right planning and safety measures, these could be new opportunities and jobs for ports located in hotspots for renewable resources necessary to create green fuels nearby. For instance, according to a new study by the International Council on Clean Transportation (ICCT), a ship running on hydrogen leaving Hong Kong on its way to Los Angeles might make a stop in the Aleutian Islands. For other nations, the switch to e-fuels could mean a drop in the steep costs of importing fossil fuels for their own domestic shipping fleets. For other nations, like Chile or Morocco, there’s even a potentially bright future exporting these fuels. As routes reshuffle, this could be a key opportunity, but it’s just as important that no countries be left behind. As an added bonus, investing into these renewable resources could help crack other tough to decarbonize industries like aluminum or steel production. Read more about ammonia’s potential role as a maritime fuel, and some of the ways ports can produce it with local renewables in our new report: Zero-carbon for shipping: Propelling investment in South and Central America with hydrogen-based shipping fuels.

While the first small electric tugs and zero emission ferries are beginning to hit the water, there are no viable deep sea zero emission vessels yet. Perhaps the first effective vessels could be a carrier of hydrogen or ammonia that utilizes an engine that can run on the ship’s cargo.

A final fuel option is also under discussion, but rather than a glimpse into the future it looks more like a cul-de-sac for investment. While its advocates have touted LNG for producing 25% less CO2 compared to HFO and its minimal air pollution when its full life cycle is analyzed the resulting methane released essentially reduces LNG’s climate benefit to nil. In the latest study of the sector’s greenhouse gas emissions, the rise in methane emissions indicates that many ships are heading down the wrong track. To stay on track with the lowest possible climate impacts, we must transition to electrofuels immediately without an intermediary stop in LNG.

Ultimately, all of these fuels will initially be more expensive than older HFO in terms of upfront expenses. Some kind of fuel levy, or a carbon tax, to initially level the playing field and fully account for the real costs of fossil fuels will likely be needed as these fuels come up to scale. Additionally, both hydrogen and ammonia have their own challenges when it comes to handling, storage, or the size of storage space they might take up on some ships. But this is an industry that has transitioned fuels and ships before, and when pressed for time can do so fairly quickly. As the planet continues to warm and we face record shattering wildfires, hurricane seasons, and ever thinner Arctic sea ice, the need for urgent climate action has never been more apparent.

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