Shipping net-zero drive in peril over slow green fuel switch, warn researchers

Shipping’s switch to greener fuels is falling behind the pace and jeopardising the broader ambition of hitting net-zero emissions by 2050, according to researchers.

A new report suggests that shipping is well behind its target of increasing the use of zero-emission fuels to at least 5% of the energy mix by 2030.

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The report, Progress Towards Shipping’s 2030 Breakthrough, by a coalition of groups promoting maritime decarbonisation, said the industry is moving too slowly across the board from finance, policy, supply and demand for green fuels.

Domagoj Baresic, a research fellow at University College London’s UCL Energy Institute and lead author of the report, said the objective is not to point any blame, but there is a need to break a deadlock.

"The headline message is that the IMO came up with these ideas to have between 5% and 10% of the industry's energy coming from zero emission fuels or technologies by 2030, so there is an urgency to adopt these fuels and technologies," he told TradeWinds.

"We have been tracking progress towards adoption of green hydrogen, green ammonia and synthetic sustainable methanol, and shipping is not on track to to have those fuels being a significant part of the fuel mix by 2030."

"It can be done, but if we do not see significant improvement over the next 12 months then we will have missed the boat."

Very little correction to the trajectory of change would be possible after the mid-2020s but the goals are still achievable with a shift in momentum, according to the third annual progress report by the UCL Energy Institute, UN Climate Change High-Level Champions and the Getting to Zero Coalition.

The report warned that maritime emissions would rocket without urgent action, with global trade predicted to quadruple by 2050. Shipping is currently responsible for about 3% of the world’s greenhouse gas emissions.

The International Maritime Organization has a set goal of zero, or near zero, emission fuels making up 5% to 10% of all shipping fuels by 2030. The report said the 5% target was considered the key tipping point that would support a rapid expansion in green shipping.

But it warned that projects in the pipeline would provide only less than half of the fuels needed to hit the 2030 target. The current orderbook of vessels able to run on clean fuels amounts to only a quarter of what would be required, the report said.

“Increasing the use of zero-emission fuels is at the heart of decarbonising the shipping industry, but we are not seeing the progress required to meet our decarbonisation goals,” Jesse Fahnestock, director of decarbonisation at the Global Maritime Forum, which was part of the project.

Only eight of 35 actions required to deliver the 2030 breakthrough were on track, the report said.

While Baresic sees the increased orderbook of vessels with dual-fuel capabilities as a positive sign, he said the industry is in danger of missing the 2030 targets partly due to a continued appetite for LNG-fuelled ships.

“We are not pointing fingers, but LNG is not really the fuel that we need to actually reach those climate ambitions set out by the IMO to be 1.5C aligned,” he said.

He believes the decision by shipowners to opt for dual-fuel tonnage that can run on LNG was because there are not yet strong enough policy signals to convince them to go for other fuels. Or it means that these owners do not feel the scalable zero-emission fuels are not available.

Under the report’s calculations, shipping will need 0.6 exajoules of clean energy, representing the lower 5% of the industry’s total 12 exajoules of energy. One exajoules equals 10¹⁸ joules of energy.

There needs to be both the demand and the supply of this amount of energy, explained Baresic.

“One uncertainty is that there are lot of projects being announced, or planned, but have these plants gone into development? Has money been committed, funds put on the table?” he asked.

“In most cases the projects are still in the planning stage, waiting for demand. This is a bit of a chicken and egg problem.”

This is where the policy makers come in to remove the hesitancy between the demand and supply side, explained Baresic.

“That is why I think what is happening this week and next week at the IMO is so relevant, because if you do see more positive signals from the IMO then perhaps the industry will see this as being more of a signal to actually move, and to move faster as well.”