Through the readiness assessment, key trends in the zero carbon fuels landscape have been uncovered, and key priorities that need to be addressed to advance readiness further have been identified. We have also recommended specific stakeholder actions that align with these priority areas.
- Technology advancements
- Hydrogen growth
- Ports and bunkering expansion
- Methanol momentum
- Consequential considerations
- Biofuel feedstock uncertainties
- Methane slip challenge
Progress in zero carbon fuel technologies is evident across the supply chain. In particular, the advancements in TRL for ammonia in 2022-23.
Global green hydrogen production is on the rise, contributing to increased TRL across the supply chain. National hydrogen energy strategies and investments support fuel availability and infrastructure.
Government strategies for decarbonisation are driving land-side infrastructure expansion, and successful bunkering trials for various fuels are underway, enhancing readiness.
Green methanol production is increasing with numerous projects in progress. Maturing bunkering capabilities and growing orders for methanol dual-fuel ships indicate higher readiness levels.
IRL and CRL are affected by implications such as land use for resource harvesting, environmental effects in case of leakages, and societal impacts.
Sourcing of sufficient sustainable feedstock to meet potential future demand remains a challenge. Efforts to cultivate third-generation feedstocks like macroalgae are underway.
Concerns over methane slip are affecting TRL and CRL assessments for methane.
- Demand profiles definition
- Sustainable scale-up of resources
- Policy consistency
- Research, development and education
- Technology development
Demand profiles need to be defined and finance mechanisms need to be developed to de-risk and stimulate investment across the supply chain.
- Stakeholders responsible for investing in resource, production, bunkering and port infrastructure need to understand the demand profiles and infrastructure required for alternative fuels in order to unlock investment to supply shipping. Regional, combined strategies across the supply chain, with positive investment cases for each stakeholder, could create benefits from economies of scale and risk-sharing across the supply chain.
- A greater demand for fuel in specific regions would help to stimulate scale-up of supply, and this demand may come from several different sectors. Note that this could also increase competition for resources.
- Development of financing mechanisms and structures will offer more flexibility around financing to support the business case for zero emission shipping where the cost gap remains a limiting factor and will encourage risk sharing discussions among key stakeholders across the shipping value chain. This will in turn help to grow demand. The Poseidon Principles supports this by providing a framework for integrating climate considerations into lending decisions.
- The fuel demand for shipping must also be taken into consideration against the demands of other sectors, particularly those sectors competing for the same feedstocks and energy supply chains.
- Stakeholders across the supply chain can form green corridor clusters to create and define regional demand that will reduce risks in investments of supply / infrastructure / fleet for each member.
- NGOs and industry associations with a goal to drive low emission fuel adoption can bring together fuel buyers from multiple sectors (e.g., other transportation, manufacturing) to aggregate demand. This consortium can then act as a unified voice to negotiate with suppliers.
- Financial institutions can create specialised financing structures tailored to the needs of shipping’s decarbonisation. NGOs can bring together key stakeholders to advocate for sustainable financing mechanisms and ensure environmental considerations are incorporated into financing decisions.
- Governments need to engage with stakeholders across the energy value chain through hubs to strategically catalyse areas of activity for trade of new fuels.
Sustainable scale-up of resources needs to be addressed to enable sufficient fuel production
- For e-methanol and e-methane to be considered scalable zero-carbon solutions, carbon negative supply chains need to be demonstrated at a substantial scale. To achieve this, a significant increase in sustainable carbon sourcing is required using techniques such as DAC and BECCS, which means removing technical barriers to scalability, such as the energy input required for operation, and tackling the high costs associated with these technologies.
- Biofuel feedstocks need to be cultivated and harvested in a sustainable manner and at significantly increased scale for production of biofuels to meet potential demand. To be considered sustainable, these feedstocks should not compete with food resources and must be grown efficiently without imposing excessive demands on land use.
- There needs to be a rapid expansion in renewable energy capacity to meet shipping and other demands. This may be achieved through identifying and securing high-potential locations for new renewable energy sites as well as technology development for more efficient energy harvesting.
- Feasible and economically viable carbon storage sites need to be made available for blue fuel production to scale-up.
- Governments, industry, and research institutions need to collaborate on research, development, and demonstration projects to tackle the technology challenge of the significant energy input required to operate DAC and BECCS technology. Additionally, more efforts looking at unlocking investments in DAC (e.g., the SASHA coalition) are needed globally.
- Research institutions (with support from governments) need to direct efforts into the development of technology and practices for farming of resourceefficient, high yield, sustainable feedstocks, such as 3rd generation macro-algae, that could be located practically to produce marine biofuels.
- Public-private partnerships (collaboration between governments and the private sector) can be set up to finance and deploy large scale renewable energy projects. Such projects could be for development of new efficient technologies for generating clean energy or to create the required infrastructure to scale-up existing technology applications.
Policy needs to be stable and consistent across the value chain and globally to stimulate investment
- The recently adopted IMO guidelines on life cycle GHG intensity of marine fuels need to be applied globally through a regulatory framework to ensure a consistent assessment of lifecycle emissions, which will allow investors to direct funds to the most appropriate projects and assets.
- Globally accepted codes and standards need to be developed for the safe integration of alternative fuel solutions, storage and transfer. The approach needs to be globalised to reduce geographical variations and uncertainties, which will allow for a more stable investment environment.
- The IMO needs to further develop the guidelines on life cycle GHG intensity of marine fuels and the regulatory framework for applying these guidelines needs to be defined. This work is ongoing.
- Policymakers need to establish a framework that enables the achievement of the IMO GHG strategy, as well as increasing consistency cross-sectorally and globally as shipping integrates into the wider energy value chain and decarbonises alongside other sectors.
Research, development and education is needed to enable a safe and sustainable transition
- New safety risks associated with the introduction of alternative fuels need to be identified and assessed, and appropriate mitigations need to be developed and adopted. This is applicable across the supply chain, although the largest knowledge gap is considered to be onboard. It is crucial to prioritise these safety aspects alongside the rapid progress of infrastructure development and deployment, rather than treating them as secondary concerns.
- Wider communities need evidence-based education so that public perception and support for (or opposition to) zero-carbon fuels and technologies is based on facts. For example, evidence that reveals benefits and disadvantages of land-use for renewable energy harvesting for marine fuel production, comparative analysis of various fuel lifecycle emissions, or comparative analysis of safety of nuclear technology against other technologies.
- There needs to be greater transparency of social impacts and supply chain sustainability. For example, sourcing of the raw materials used in batteries (electrification), and emissions across fuel production processes. Social and sustainability impacts on ports are being considered on a port by port basis through a project in collaboration with EDF, Arup, and LR Maritime Decarbonisation Hub. This type of study needs to be undertaken across more regions globally.
- Knowledge gaps in the safe and sustainable adoption of new fuel solutions need to be identified, investigated and findings shared across industries and supply chains, so that a safe and sustainable transition can happen efficiently on a global scale. For example, lessons learned related to handling and storage of ammonia in the fertiliser industry may be transferrable to the marine industry.
- Crew training centres need to work with research organisations and experts from both shipping and other sectors to develop effective and complete crew training courses, applicable to new fuels, technologies, and infrastructures.
- Governments need to incorporate new fuel supply chains into long-term sustainability plans and engage impacted communities in these plans through public information campaigns and community consultations, using evidence and facts.
- The IMO could establish and enforce regulations that mandate transparency and sustainability reporting in supply chains.
- NGOs should facilitate partnerships and projects that engage stakeholders in developing countries to evaluate both the potential beneficial and adverse social, economic, and health effects on local communities within the framework of pioneering initiatives.
- Technology providers, ports, shipowners, and new fuel initiatives should employ experts with experience of handling alternative fuels from other industries to share knowledge and best practices that could be transferred to the marine industry.
Technology development needs to continue at pace
- TRL needs to increase, particularly for ammonia and hydrogen at bunkering and onboard handling and storage supply chain stages.
- Storage of hydrogen in ports and onboard ships remains a challenge, and solutions need to be validated and tested.
- Emissions through methane slip need to be abated. This challenge is being addressed by MAMII, which draws upon the expertise of its diverse members to investigate and endorse a range of scalable technology solutions and transparency mechanisms to assist capture, calculate and manage methane emissions activity.
- The impacts of varying biofuel properties from different feedstock types (e.g., advanced biodiesel from third generation feedstocks) are uncertain and need to be investigated over a longer time period.
- For nuclear, technology development across the supply chain is needed, particularly for heat pipe and molten salt reactor technologies.
- All ammonia value chain members must dedicate resources to develop and deploy measures, practices, and technology to overcome ammonia safety challenges across the supply chain and onboard, addressing the recommendations in the recently published “Recommendations for Design and Operation of Ammonia-Fuelled Vessels Based on Multi-disciplinary Risk Analysis”.
- Ports and shipowners should partner with technology providers, and research institutions to establish pilot projects in ports and onboard ships for the validation and testing of hydrogen storage solutions, aiming to assess their practicality, efficiency, and safety.
- Research institutions should collaborate with biodiesel manufacturers to conduct comprehensive, long-term studies assessing the impact of varying fuel properties from different feedstock types on storage and propulsion technologies, with the findings shared openly with the shipping industry to inform decision-making.
- Government and regulatory authorities should allocate research and development funding and provide regulatory guidance to support the advancement of nuclear technologies, especially heat pipe and molten salt reactor technologies, across the entire supply chain.
Trends have shown an average increase in readiness across all fuels and supply chain stages. Here are the readiness levels at-a-glance for the fuels under consideration from three perspectives: technology (TRL), investment (IRL) and community (CRL). The arrows indicate changes in readiness between July 2022 and September 2023.