January 23, 2022

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What it will take to decarbonize shipping

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It’s hard to decarbonize, it’s often overlooked and it accounts for more annual carbon emissions than air travel: Maritime shipping.

Ocean freight might be one of the last things you think about when it comes to the transition to green energy, but the tide is turning — the sector is receiving more attention from corporations and activists alike. Notably: In late October, nine major companies — including Amazon, IKEA, Michelin and Unilever — announced their intentions to fuel all of their shipping vessels with zero-carbon fuels by 2040.

But this voyage will be lengthy. Success in decarbonizing shipping will depend on a mix of smart policy, financial incentives and significant leaps in technology, experts say. “We can achieve this, but everyone needs to come together,” said Pradeep Venkataraman, senior manager at Mitsubishi Heavy Industries America, speaking during a panel discussion at VERGE 21 in October. 

Here are three things you need to know about the path to decarbonizing shipping.

1. A lot will depend on green fuel development

So, how do you power a container ship without diesel, anyway? There are no easy answers at the moment.

Running tankers on battery electric technologies is largely out of the question. A few low- or zero-carbon fuel solutions have risen to the top — namely ammonia and hydrogen — but both pose challenges. For one, there’s not nearly enough of those renewable fuels available. They’re also more expensive, and there’s scant infrastructure to transport and store them. Then there’s the challenge of retrofitting vessels and engines to run on those fuels.

Plus, ammonia and hydrogen are only considered zero-carbon fuels if they’re produced using renewable energy in the first place — which very much is not the case today. Demand for “green” versions of those fuels is certainly growing: The market for marine ammonia in the U.S. could reach 47 million tons by 2050, according to the Clean Air Task Force, and might reach cost-parity with fossil fuels around the same time. The market for green hydrogen could be worth $300 billion by 2050, according to PwC.

We see cities and ports as really key drivers in being able to enable first movers.

Trevor Brown, executive director of the Ammonia Energy Association, says we could see an ammonia-fueled fleet by 2030, with prototypes coming along in the next few years. But even he’s not married to the idea of ammonia being the fuel of the future. It could just as easily be hydrogen or methanol — or a mix of all three, as long as it’s not oil.

“If we agree to decarbonize, it doesn’t matter what molecule we use,” Brown said.

2. Addressing low-hanging fruit can go a long way

Not all the focus in ocean freight is going toward the massive container ships that ferry consumer goods across oceans. There’s also an array of tug boats and other small support vessels that can — and already are — being decarbonized at a much faster rate.

“It’s kind of the low-hanging fruit; we really need to pick those off first,” said Dave Lee, senior account manager at ABB Marine & Ports, also speaking on the VERGE panel. He pointed to the Port of San Diego’s plan to pilot an all-electric tug boat in 2023.

Venkataraman also sees low-hanging fruit in one other technology: onboard carbon capture. Mitsubishi has partnered with Kawasaki to develop a system that can capture carbon as it’s being emitted from ships — something of a stopgap on the way to eliminating those emissions altogether.

Plus, there are an array of cargo handling vehicles at ports that pick up where vessels leave off. The Port of Los Angeles, for example, plans to zero out emissions from cargo handling equipment by 2030, and is piloting battery-electric and hydrogen fuel cell models.

“We have been doing as much as we can to facilitate the testing and evolution of this technology,” said Chris Cannon, director of environmental management at the port, when I spoke with him after the VERGE event.

3. Cities and ports can enable first movers

While technology is a big barrier to decarbonizing shipping, it’s not the only one. Money is also a big sticking point in this industry where margins are already tight.

“We need the government to take the first step to prove these technologies are viable technologies,” said Lee. “The vessel operator needs that push, needs that certainty.”

If we agree to decarbonize, it doesn’t matter what molecule we use.

Because the industry is so cost-sensitive, Lee said the transition to green fuels will not move fast enough if left solely to commercial forces. He wants to see the U.S. government decarbonize its own vessels and help develop the technology necessary to do so. 

Alisa Kreynes, program manager of global initiatives at C40 Cities, also said policy incentives will play a big role in speeding up the transition.

“We see cities and ports as really key drivers in being able to enable first movers,” Kreynes said at the VERGE panel. Her organization works with ports to set policies — such as clean air regulations or optimized scheduling — that motivate vessel operators to do better on sustainability.

Cannon, too, sees the Port of LA as a motivator in vessel operators’ transition to new fuels. “Everybody’s pushing, and we are too,” Cannon said. He hopes that testing new fuel technology — whether ammonia or hydrogen — will lead to wider adoption and cost parity with fossil fuels.

“We’re not trying to pick winners. We just want to facilitate the development of these technologies,” Cannon said.

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