Clock ticking for shipping to meet 5% zero-emission fuel target by 2030 – GMF
Shipping is falling behind on the 5% target for zero-emission fuels by 2030, with projections showing the sector may be “off track” by the mid-2020s, a Global Maritime Forum (GMF)-led study finds.
PHOTO: A model of a 40,000-cbm ammonia-capable gas carrier. NYK
The IMO has set a goal that 5-10% of total bunker consumption should be of zero- or near-zero-emission fuels by 2030.
Demand for zero- or near-zero-emission fuels is "off track" and supply is only "partially on track," according to a report by the UK-based UCL Energy Institute, UN Climate Change High-Level Champions and GMF’s Getting to Zero Coalition.
The report warned that the “window of opportunity to act is closing rapidly” and estimated that shipping has just 12 months to course-correct to meet even the lower threshold of the IMO’s ambition.
According to the report, the IMO’s 5% ambition entails the use of 29.8 million mt/year of green ammonia or 28.1 million mt/year of e-methanol. These fuels are produced from green hydrogen using renewable electricity and can achieve a 90-100% reduction in greenhouse gas (GHG) intensity compared to conventional fuels on a well-to-wake basis, the study explains.
However, the authors noted that the current production of these fuels is likely to meet just 43% of the required supply by 2030.
Similarly, the current orderbook for ammonia- and methanol-capable vessels is projected to meet only 25% of the demand by 2030.
Classification society DNV's data shows that there are currently only two ammonia and 53 methanol-capable vessels in operation. An additional 28 ammonia-capable vessels are on order for delivery towards 2028 and 294 methanol-capable ships are set for delivery by 2029.
Despite these setbacks, the report suggested that the 2030 target can still be reached if both fuel production and vessel orders increase "exponentially" over the next few years.
The report also highlighted a slowdown in funding for green ammonia and e-methanol production, as well as for vessels capable of using these fuels. Instead, much of the investment continues to flow into fossil-fuel-powered ships, further delaying progress toward the 2030 goal.
“Increases in public finance could help correct the reduction in private funding,” it added.
“It is critical that upcoming negotiations on GHG pricing result in ambitious policies to send strong SZEF signals and push policy on track,” the report stressed.
By Konica Bhatt
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