Getting the math right: Crunch time for shipping’s net-zero ambitions

Today, more than 80 per cent of the world’s traded goods are moved by shipping but the industry also accounts for up to 3 per cent of global greenhouse gas (GHG) emissions as it is heavily dependent on fossil fuels.

There has been intensive discussion in recent years on the use of alternative fuels for shipping, and there have been positive actions to enable this. Vessels capable of utilising a multitude of alternative low-emission fuels such as bio and e-methanol, bio and e-methane, biodiesel, and ammonia are on their way, and some are already in operation.

Several countries in the region have also been forward thinking and are strongly supporting the maritime decarbonisation agenda. Singapore is taking a leading role by promoting a fuel-agnostic approach.

As the world’s largest bunkering hub, Singapore is developing ammonia, hydrogen and methanol value chains to support international shipping.

The Maritime and Port Authority of Singapore (MPA) is also driving global collaboration for decarbonisation and efficiency through the establishment of six Green and Digital Shipping Corridors (GDSCs).

Closing the gap between fuel types

Ideally, the shipping industry could identify “the best” of these alternative fuels. But none of these fuels have the scalability to propel the entire global merchant fleet alone.

They tap into different feedstocks, and there are significant supply chain bottle necks in production. Demand signals for these fuels must increase immediately to stimulate the currently nascent supply.

Global regulations are needed through the International Maritime Organization (IMO) for green fuel standards, fossil fuel phase-out timelines and the implementation of effective mid-term measures to close the significant cost gap between fossil fuels and green fuels.

In 2025, the IMO aims to reach agreements on these topics. The outcomes of those decisions will significantly impact the industry, our customers’ ability to pay for decarbonisation and the pace of the energy transition.

Source: The Business Times

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