Try (Just a Little Bit Harder), Part 3 - Are 'Green' and 'Blue' Ammonia the Shipping Fuels of the Future?

The international shipping industry’s push to significantly reduce its carbon footprint over the next three decades is raising an obvious question: Is there a zero- or low-carbon bunker fuel that meets all of the industry’s basic criteria — things like availability, safety, and relative economy, not to mention sufficient on-board energy to transport massive, city-block-sized vessels thousands of miles at a clip. There is no clear answer yet, but there is a lot of talk about ammonia, or more specifically ammonia produced in a way that either generates no carbon dioxide (CO2) or that captures and sequesters much of the CO2 that is generated during production. But several major challenges must be met before “green” and “blue” ammonia can lay claim to even a small slice of the bunkers market, as we discuss in today’s RBN blog.

This is the third blog in our series on efforts to reduce emissions of CO2 and other greenhouse gases (GHG) in the shipping industry, which accounts for about 3% of global GHG emissions. In Part 1, we looked at the push by leading international shipping associations and many large shipowners (particularly the large container operators) to have the International Maritime Organization (IMO) ratchet up the industry’s decarbonization goals. In effect, shipowners — themselves under pressure from their large, ESG-minded customers, shareholders, and lenders — are telling the IMO that its goals of reducing global shipping’s carbon intensity (CI) by 40% from its 2008 level by 2030 and total GHG emissions by 50% by 2050 are too timid. They want the IMO to set a more aggressive CI-reduction target for 2030 as well as a goal of eliminating or fully offsetting GHG emissions by mid-century.

In Part 2, we discussed the fact that new container ships, bulk carriers, and tankers are major, long-term investments (expected life of 20-25 years), and that shipowners only want to commit to building new vessels if they know that their propulsion systems and fuel tanks make sense in the long run (while power plants can be retrofitted, it’s better to do correctly when building new). With that in mind, we looked at the prospects for LNG as a lower-carbon shipping fuel for the near/medium term — and the potential for some of that to eventually be supplanted by zero-carbon bio-LNG (a.k.a. biomethane) and synthetic LNG. (Very small volumes of bio-LNG and synthetic LNG are already being used.) There is at least some concern, however, that use of LNG of any type for as bunker fuel may result in small amounts of methane (CH4) — a potent GHG — to be released into the atmosphere during its production, transportation, and injection into an engine. This is because methane has a near/mid-term GHG impact roughly 75 times that of CO2.

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