With fossil fuels still powering roughly 99% of global shipping, the sector is seeking to reduce emissions through cleaner fuel sources – including methanol, ammonia and wind – that could soon see increased use.
Increased Investment
In August 2022 Breakthrough Energy Ventures, a coalition of private investors founded by US tech entrepreneur Bill Gates, helped Danish start-up Blue World Technologies raise $37m to scale up production of a technological system that extracts hydrogen from methanol and runs it through a fuel cell, generating fuel savings of up to 30% compared to a traditional combustion engine.
International shipping majors have been taking similar steps. In April 2024 Danish shipping giant AP Moller-Maersk introduced the second of its 18 methanol-enabled ships scheduled for delivery in 2024/25 and could purchase Blue World’s methanol system for future orders. Chinese shipping giants COSCO Shipping and China Merchants Group, meanwhile, are also looking to methanol as an alternative fuel source.
In July 2023 the UN International Maritime Organisation (IMO) set goals for the shipping sector to reduce greenhouse gas emissions by 20% by 2030 and reach net zero by 2050. The IMO instituted new regulations in 2020 limiting the maximum sulphur content in marine fuel to 0.5%, down from the previous limit of 3.5%.
However, emissions from shipping accounts for roughly 3% of the global total. Shifting to cleaner fuels is imperative, as is developing policy and infrastructure to support the transition. In February 2023 Ghana Maritime Authority, in collaboration with the IMO and the Danish Maritime Authority, organised a conference in Accra seeking to identify key opportunities in green shipping for African countries.
Cleaner Fuels
Ammonia produced from hydrogen or clean energy sources using electrolysers carries promise as an alternative fuel. In addition to ammonia’s high energy density, many countries already have transport and storage infrastructure in place, which could facilitate adoption. Ammonia is still in the early stages of technological development for application in ships, but investment is gathering pace. In 2022 the American Bureau of Shipping granted early-stage approval for ammonia-powered ships and infrastructure, including a design from global shipbuilding giant Samsung Heavy Industries. In the same year US-based Amogy raised $50m to use ammonia in fuel cells, which could generate even more significant reductions in emissions.
Clean hydrogen, often used to produce ammonia and methanol, also has potential – even if current technology only allows it to be used for smaller vessels such as ferries and passenger boats. Storage limitations for bunkering and the need to refit existing ships entirely makes hydrogen an unlikely mass fuel source in the near to medium term. Nevertheless, if trade in hydrogen expands globally, with regions like Latin America aiming to become large-scale hydrogen exporters, it could play a key role in meeting 2050 net-zero targets.
An abundant supply of liquefied natural gas (LNG) has helped gas make inroads in shipping as an auxiliary fuel to traditional diesel bunker fuels. This is partly because small-scale LNG plants can be built quickly and cheaply near bunkering facilities. Although fossil fuel based, LNG is classified as a transitional fuel by the EU. Indeed, ships that burn LNG reportedly emit 99% less diesel particulate matter and sulphur oxide than those running on traditional fuels, as well as an estimated 25% reduction in carbon dioxide. In September 2022 the Port of Long Beach in California refuelled a container ship with LNG for the first time in the port’s history.
Lastly, in a trend that harkens back to the pre-fossil fuel era, some shipping companies are looking at harnessing wind power. Large sails positioned on cargo ships can enhance propulsion by 5-20% when used alongside other fuel sources, according to the International Windship Association. In August 2023 the first of such ships set sail from Singapore to Brazil, propelled by sails that use wind power to cut fuel use by up to 30%.
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