With so many low-carbon, carbon-neutral and carbon-negative shipping fuels being touted as the next big thing, it can be hard to determine which are for real and which are mostly hype. Some folks have been talking up LNG, biofuels, clean ammonia, fuel cells ... the list goes on and on. One way to separate the most promising prospects from the also-rans is to keep track of where big shipping companies are placing their bets — and how they’re hedging those wagers, just in case it takes longer than expected to develop fuel-production facilities. Clean methanol in particular is showing signs that it may be one of the frontrunners on both the supply and the demand sides, with an increasing number of firm orders being placed for massive container ships and other vessels that can be fueled by either methanol or low-sulfur fuel oil (LSFO) — there’s the hedge — and a number of new clean methanol production facilities being planned in the U.S. and overseas. (But still, a healthy dose of skepticism about it all is warranted.) In today’s RBN blog, we discuss recent developments in the clean methanol space.
As we said in Break Up to Make Up, the global shipping industry spent the 2010s ratcheting down emissions of old-school pollutants — mostly sulfur dioxide (SO2) — from the 50,000-plus tankers, dry bulkers, container ships, tankers, cruise ships, and other commercial vessels plying international waters. The International Maritime Organization’s (IMO) ever-tightening environmental rules ratcheted down the maximum allowable sulfur content in marine fuel used around most of the world from 4.5% in January 2010 to only 0.5% in January 2020, when IMO 2020 was implemented. [Since 2015, the allowable sulfur content in bunkers used in the IMO’s Emission Control Areas (ECAs) — which include Europe’s Baltic and North seas and areas within 200 nautical miles of the U.S. and Canadian coasts — has been an even lower 0.1%.]
For the IMO and shipping industry, the 2020s have been all about reducing greenhouse gas (GHG) emissions, especially carbon dioxide (CO2). Global shipping activity accounts for about 3% of total GHGs and the IMO, which sets emissions and other rules for the industry, in July established a revised goal of reducing the industry’s global GHG emissions by at least 20% (and ideally 30%) from the 2008 level by 2030 and at least 70% (and ideally 80%) by 2040, then achieve net-zero GHG emissions as close to 2050 as possible.
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