World Bank: Ammonia, hydrogen are the most promising zero-carbon marine fuels

Ammonia and hydrogen are zero-carbon bunker fuels that are most likely to be major contributors to shipping’s decarbonized future, a new series of reports released by the World Bank reveals.

At present, the two green fuels are “most promising” zero-carbon bunker fuels within the shipping industry.

On the other hand, liquefied natural gas (LNG) is likely to play “a limited role” in the decarbonization of the shipping sector, according to the first report in the series, “Volume 1: The Potential of Zero-Carbon Bunker Fuels in Developing Countries”.

The analysis concludes that green ammonia, closely followed by green hydrogen, strikes the most advantageous balance of favorable features among a range of different zero-carbon candidate bunker fuels including biofuels, hydrogen, ammonia and synthetic carbon-based fuels.

Specifically, these crucial features relate to the fuels’ lifecycle GHG emissions, broader environmental factors, scalability, economic viability, and the technical and safety implications of using these fuels.

What is more, ammonia or hydrogen fuels have the advantage of offering multiple production pathways, as they can be produced either from renewable electricity or from natural gas, with the resulting carbon emissions captured and securely stored underground. The multiple production pathways provide an important strategic advantage insofar as they help to alleviate some concerns about initial capacity limits and technology issues.

The report further says that, where possible, it may prove economically beneficial to start the production of zero-carbon bunker fuels with blue ammonia or hydrogen and then progressively transition to their green counterparts as renewable electricity prices decrease. However, this may also present a certain risk of “stranded assets” for blue ammonia or hydrogen infrastructure, which needs to be carefully assessed.

Both fuels can be used in a modified internal combustion engine in much the same way as HFO is currently used. Their use in adapted internal combustion engines has technical and economic benefits. First, existing ships can begin to burn ammonia or hydrogen with minimal modifications and without replacing the main engine. This also allows ammonia or hydrogen to benefit from an existing powertrain supply chain. At the same time, ammonia and hydrogen will also be compatible with emerging fuel cell solutions.

Although biofuels and synthetic carbon-based bunker fuels also demonstrate high technical potential for use as zero-carbon bunker fuels, ensuring large-scale supply is likely to be constrained by the limited availability of, and competing demands for, sustainable biomass and lower cost competitiveness, respectively.

Zero-carbon bunker fuels offer “a unique opportunity” for developing countries

By transitioning toward zero-carbon shipping, many countries, especially those with large renewable energy resources, can break into a future zero-carbon fuel market, while modernizing their own domestic energy and industrial infrastructure, the World Bank explained.

“The maritime community, particularly in developing countries, has a unique opportunity in the context of these emerging zero-carbon bunker fuels,” Bernice Van Bronkhorst, Global Director for Climate Change at the World Bank, said.

“Not only will they help decarbonize shipping, but they can also be used to boost domestic infrastructure needs and chart a course for low-carbon development more generally.”

The research makes the case that strategic policy interventions are needed to hasten the sector’s energy transition and seize opportunities for wider economic, energy, and industrial development in developing countries.

For instance, the introduction of a meaningful carbon price would create a level playing field for the development and utilization of zero-carbon bunker fuels. Revenue generated by such a market-based measure can help support developing countries in their energy transitions and accelerate crucial research, development, and deployment of these fuels.

Businesses should also focus on “no-regret” options, such as increased energy efficiency and maximum fuel flexibility. Constructive collaboration between industry stakeholders and policymakers, both at the IMO and on a national/regional level, can also create greater certainty on the availability, pricing, and timing of zero-carbon bunker fuels which can further boost their rapid uptake from 2030, the World Bank concluded.