E-fuels set to power next ZEMBA tender, but supply challenges loom

E-fuel-powered container shipping services could be ready for commercial deployment by the year 2027, a new report by the Zero Emission Maritime Buyers Alliance (ZEMBA) and the UK-based classification society Lloyd’s Register’s (LR) Maritime Decarbonisation Hub has projected.

As informed, the report, titled Availability of e-fuels and e-fuel-capable vessels from 2027–2030, summarizes the findings from a request for information (RFI) that the two parties co-ran in May 2024. It had the goal of assessing the readiness of the maritime industry to embrace e-fuels, such as e-methanol, highlighting both the potential for e-methanol-powered ships and the challenges posed by supply-demand mismatches.

More specifically, the report focused on the implications of the RFI’s results for ZEMBA’s next tender, projected to be launched in early 2025, and how these findings relate to overarching trends in commercial deployment of e-fuels in the maritime sector.

As understood, LR and ZEMBA found ‘sufficient predicted supply’ of both e-methanol and e-methanol-capable ships in the container segment for ZEMBA’s next tender to tap into, with a target set to purchase the environmental attributes associated with e-fuel-powered services from 2027.

According to LR, most of the respondents who contributed their knowledge for the report anticipated that commercial e-fuels deployment could, in fact, be feasible within the next 3-4 years, if not sooner.

The RFI also suggested that 391,000 metric tons of heavy fuel oil equivalent (thFOe) of e-ammonia, e-methane and e-methanol production could be expected by 2027 across a number of sectors, at which time RFI respondents believe there could be ‘166 e-methane-capable vessels, 80 e-methanol-capable vessels, and 22 e-ammonia-capable vessels across all shipping segments.’

As disclosed, the data collected exceeded the aggregated demand for ZEMBA’s inaugural tender, completed in April 2024, ‘by a large margin’. The earlier tender was awarded to the German container shippping major Hapag-Lloyd that pledged to ‘deliver a greenhouse gas emissions reduction over 90%’ as compared to fossil fuel service to ZEMBA members starting next year.

“ZEMBA’s aim is to open the door to new and increasingly scalable solutions through each of our tender processes. Because there are scale limitations to those low carbon fuels that rely on biogenic feedstocks, rapid deployment of hydrogen-derived e-fuels this decade is crucial to ensure that the maritime sector gets on a 1.5 aligned pathway toward full decarbonization by 2050, at the latest,” said Ingrid Irigoyen, President and CEO of ZEMBA.

Despite the availability of e-fuel-capable ships, the report discovered a production bottleneck between fuel production and ship deployment. The RFI results reportedly predicted that, between 2027 and 2030, e-methane supply would be limited, with no projects post-FID planned during that period, suggesting that e-methane-capable vessels may not have access to enough fuel for a next e-fuels-focused ZEMBA tender.

On the other hand, e-methanol may enjoy sufficient production and a sustainable number of compatible vessels on the water by 2027.

In regards to e-ammonia, while its production capacity has been ‘robust’, the report has cautioned that this pathway faces certain limitations, primarily due to the shortage of e-ammonia-capable vessels within the next 3 years.

While inspecting e-fuel-capable ships segment by segment, however, the RFI found that the boxship market would possess ample projected capacity in 2027, with an estimated total capacity of 985,700 TEU of e-fuel-capable containerships by that time.

“Despite the current gap between e-fuel supply and vessel availability, it’s encouraging to see the potential for e-fuels to make a significant impact on the maritime sector. We’re excited to collaborate with ZEMBA on their second tender, which could be instrumental in driving the widespread adoption of scalable e-fuels in shipping,” Carlo Raucci, Director of Sustainable Fuels and Strategy at Lloyd’s Register Maritime Decarbonisation Hub, remarked.