The Week in Alternative Fuels 9 December 2023
Major shipping firms want an eventual end to fossil-fuelled ships, and more green corridor projects are being mapped out.
PHOTO: Namibia has great potential to produce green hydrogen and become a green shipping corridor location. Hyphen Southern Corridor Development Initiative
The heads of the four of the world’s biggest container lines and a major RoRo firm have asked the International Maritime Organisation (IMO) to lay down a law against more fossil-fuelled ships. At COP28, Maersk, MSC, CMA CGM, Hapag-Lloyd and Wallenius Wilhelmsen called for an end date for newbuild orders of ships that can only run on fossil fuels. They did not, however, specify the end date they have in mind or which shipping segments it should cover.
Among the other items on their regulatory wish list is a global greenhouse gas (GHG) intensity standard, which should come with GHG pricing and a timeline that can bring more certainty and predictable conditions for investing in lower-emission ships.
Switching to alternative fuels with underdeveloped supply infrastructure such as green methanol or ammonia could be considered easier for this group's container ships and vehicle carriers than for more tramp trading ships because:
- Their ships tend to go on fixed schedules and to certain container and vehicle ports.
- Their customers are closer to the end-consumers, who increasingly demand sustainable products and, in some cases, are willing to pay premiums for them.
And while they talk the talk, these container giants are still among the world’s biggest GHG emitters. It will probably still be the actual fuel costs that will be a decisive factor in whether they will opt to buy green fuels or fossil fuels for their future dual-fuel vessels – which will be able to consume either. The primacy of the fuel cost question came on display recently when CMA CGM reneged on its order of eight dual-fuel methanol vessels in favour of dual-fuel LNG.
Also at COP28, the US and Danish governments announced a tie-up with shipping decarbonisation non-profit Maersk Mc-Kinney Moller Center for Zero Carbon Shipping (MMMCZCS). They have identified Namibia, Fiji and Panama as suitable candidates for green shipping corridors, and will select another two Global South countries to focus their efforts on, too.
These corridors are typically about forging public-private relationships and foster systems thinking, to establish demand signals and facilitate bunker supply. Dozens of country candidates for green corridors have been announced in recent years. Their timelines usually have launch dates in the second half of this decade or further out. There have not been many tangible results to show for so far, but it’s hard to measure their exact impact as they will also influence decision-making indirectly, over time. For example, alternative fuel supply signals coming from a green corridor project between Chile and the Netherlands could perhaps help trigger a decision from a shipowner that is unassociated with the project to order ships with alternatively fuelled engines to sail on the route.
Maersk has in a way been creating its own green corridors by ordering dual-fuel methanol newbuilds and signing offtake agreements. This week the Danish shipowner announced that it will deploy the first of its large, methanol-capable container ship newbuilds on an Asia-Europe route from February onwards. The ship will call at ports in China, Malaysia, Sri Lanka and Germany. If suppliers in any of these ports got around to roll out methanol bunkering, they would have at least one ship as a potential customer.
Egypt looks like another future bunker option for methanol-burning ships. Norway’s Scatec is exploring green e-methanol production and bunkering in East Port Said. It signed an offtake agreement with the Suez Canal Economic Zone on the sidelines at COP28 this week. The firms envision a 190-megawatt electrolyser that could produce enough green hydrogen to, in turn, produce 100,000 mt/year of green e-methanol.
Demand for green methanol will eventually come from newbuilds in a future fleet of 234 dual-fuel methanol vessels in operation or on order. DNV keeps a tally of those orders and noted weaker growth in November, with only four methanol vessels ordered. But “both interest and pipeline remain strong though,” DNV principal consultant Martin Christian Wold commented.
By Erik Hoffmann
Here is our selection of the top five alternative fuels stories from this week:
COP28: Shipping companies urge IMO to fast track green fuel regulations
COP28: US collaborates with MMMCZCS to explore green corridor opportunities in Global South
Maersk to deploy methanol dual-fuel newbuild on Asia-Europe trade lane
Norwegian firm to supply green methanol for shipping in Egypt
