Scalable zero-emission fuels are key to shipping’s green transition, study shows

The shipping industry’s green transition will require rapid scaling of the so-called scalable zero-emission fuels.

This was one of the conclusions of Tristan Smith, Associate Professor at UCL Energy Institute, during the event co-hosted last week by Transport & Environment and Clean Air Task Force. He presented modellings-based scenarios about the future of alternative fuels in the context of shipping’s energy transition.

One of the possible scenarios would be gradual decarbonisation that implies an initial use of scalable zero-emission fuels in the middle of this decade growing to a small early adoption use by the 2030s and then a very rapid scaling over the 2030s, according to Smith.

“It’s almost immaterial what your temperature goal target is, the 2030s will need this rapid scaling either to nearly 80-90% or to 50-60% the penetration of scalable zero-emission fuels.”

Scalable zero-emission fuels are hydrogen-derived fuels such as green hydrogen, green ammonia, methanol, and the like.

Strengths and weaknesses of FuelEU Maritime

The event, titled “How e-fuels can clean up European shipping”, focused on the necessary legislative changes for the upcoming FuelEU Maritime legislation.

The regulation is one of several proposals that seek to steer the EU maritime sector towards decarbonization.

In July last year, the European Commission introduced the ‘fit for 55’ — the first-ever package of legislative proposals that aim to implement the European Green Deal.

The EU has set an objective of cutting emissions across the bloc by 55 per cent by 2030, as well as fully decarbonising the economy by 2050.

The initiative encourages ships to progressively switch to alternative fuels. Specifically, to boost the uptake of sustainable maritime fuels, the EU seeks to limit the carbon footprint of the energy used onboard vessels. As a result, the proposal sets up a fuel standard for vessels and introduces a requirement for the most polluting ships to use shore power.

However, opinions differ when it comes to the question of whether EU’s ‘fit for 55’ plans can really ensure reaching the envisaged climate targets.

T&E had warned that the simple goal-based target envisioned in draft proposal would likely result in the acceleration of fossil natural gas uptake as the cheapest alternative fuel eligible until 2040, as well as biofuels from dubious origin. The EU proposal is said to bear high risks of ‘fossil gas lock-in’, with liquified natural gas (LNG) to be given a strong push in the market at the expense of more sustainable alternative fuels.

“The technical design and the overall ambition of the FuelEU Maritime regulation makes it unfit to promote sustainable and scalable renewable fuels. This is because ships will be allowed to use not only expensive renewable fuels of non-biological origin (RFNBOs), but also supposedly lower-carbon cheap fossil fuels, such as LNG in order to comply with the emissions reduction targets,” according to T&E.

“This is inconsistent with the objectives of the EU Green Deal, as well as with the other fuel initiatives of the Fit-for-55 package targeting renewable fuels only,” T&E believes.

‘The transition will be steep but doable’

The nature of transitions is said to imply an S-shaped curve for zero-emission fuels and vessels. Speaking of scalable zero-emission fuels, this would mean moving to about 5% in 2030.

In the early stages of the transition, one only wants to use small volumes in order to reduce technology costs, learn about safety and operational practices and gain build-up of supply chains, etc.

Later, from 2030 onwards, the rate of change is expected to be steep and the whole maritime ecosystems should get ready now, Smith urged.

When it comes to sustainable fuels, a gradual start is acceptable but one needs to be prepared for something that happens very fast in the next decade. This corresponds to what the fuel mix needs to look like this decade and how to minimize risks and costs.

What is more, non-scalable zero-emission fuels, including biofuels, may have a transient role but are not currently expected to be significant, according to Smith.

The role of LNG

UCL Energy Institute Professor also touched upon LNG and its role in shipping’s decarbonization journey.

“By the time we get by the middle of the decade, with the role after the scalable zero-emission fuels, you do not need liquefied natural gas,” Smith stressed.

“In fact, it’s a hindrance because it’s only producing small CO2 and no material greenhouse gas reduction. For any climate objective, it has no role to play.”

The fact is that there is currently a strong incentive to use LNG under much of the ‘fit for 55’ policy and other various initiatives that favor its uptake.

Modellings show that LNG uptake will be increasingly high until the late 2020s. In the late 2020s, LNG will be rapidly overtaken by scalable zero-emission fuels.

“The current policy landscape is a high risk of driving stranded assets that have a lifetime and a role of about 5 years before they get modified because they’re no longer fit for the purpose of reaching zero emissions and don’t have a clear role to play.”

He concluded that we need to focus (only) on scalable zero-emission and recognise that biofuels are not the solution. Focusing on non-scalable zero-emission fuels is said to delay rapid investments in scalable zero-emission fuels.

Moreover, focusing intensively on LNG for example would result in high numbers of premature vessel scrapping or large-scale retrofitting of ships built in the 2020s.

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