Supply Chains and Transportation

These fuel producers are leading the switch to zero-emission fuels in the shipping industry

Shipping.

Around 80% of all goods are transported by ship. Image: Unsplash/John Simmons

Simon Torkington
Senior Writer, Forum Stories
  • Shipping produces over a billion tonnes of greenhouse gas emissions yearly.
  • New zero-emission fuels produced from green hydrogen could cut this by 80-100% once scaled.
  • The World Economic Forum’s First Suppliers Hub connects suppliers and buyers to scale green maritime fuels.

Almost everything we own has been transported by ship at some point in its lifecycle. Research shows that around 80% of all goods are moved by ship.

One of the consequences of transportation at this scale is that shipping as a sector is responsible for 2-3% of the emissions in the world. Shipping now produces more than a billion tonnes of greenhouse gas emissions (GHGs) every year, according to the International Maritime Organization (IMO).

Traditional shipping fuel is made up of heavy oils, commonly known as bunker fuel. When burned these fuels cause high levels of pollutants including harmful particulates and sulphur dioxide. Ship fuels contain around 2,000 times as much sulphur as diesel fuel used in cars.

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Zero-emission shipping fuels

A new generation of shipping fuels is being developed to accelerate the decarbonization of the shipping sector. Green hydrogen and its derivatives, e-ethanol and e-ammonia, are emerging as cornerstone solutions for maritime decarbonization.

These fuels align with the IMO’s progress towards a set of binding global regulations for the industry, with a goal of net-zero shipping by, or around 2050.

Design, operational and economic solutions to reduce emissions.
Hydrogen and synthetic fuels could cut shipping emissions by 80-100%. Image: IMO

When hydrogen is produced through electrolysis powered by renewable energy, it can be synthesized into green fuels like e-methanol and e-ammonia.

Industry pioneers are already moving to scale up production. For example, Copenhagen Infrastructure Partners has secured a 126,000-hectare plot in Western Australia to build a large-scale renewable energy project - the Murchison project - that once operational, will utilize combined onshore wind and solar energy to produce green ammonia. The plant could reduce annual CO2 emissions by 4.4 million tonnes, the company says.

This shift toward green fuels is creating opportunities for countries with abundant renewable energy resources. In Africa, companies like Phelan Green Energy in South Africa and Hyphen Hydrogen Energy in Namibia are developing facilities to produce e-ammonia at scale.

Hyphen’s plant will be one of the largest and most advanced green hydrogen plants in the world. Investment in the plant has topped $10 billion, which is equivalent to Namibia’s annual GDP. The fuel it produces will offset 5-6 million tonnes of carbon dioxide emissions each year, the company says.

An ecosystem for green fuels

These innovators are members of the World Economic Forum’s First Suppliers Hub, part of the First Movers Coalition. The First Suppliers Hub is a carefully curated repository of decarbonization projects that meet stringent emissions-reduction criteria.

However, scaling hydrogen-based fuel technologies involves complex market dynamics. Success requires coordinated action from an ecosystem of suppliers, buyers, financiers and policymakers.

The First Suppliers Hub plays a crucial role here, identifying promising decarbonization projects and convening key stakeholders to overcome deployment challenges.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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