An International Chamber of Shipping-commissioned report says there is “enormous opportunity for investors and governments” to scale up renewables
There is a “huge and immediate need for renewable-based fuels in shipping”, according to the Fuelling the Fourth Propulsion Revolution report.
Germany’s University of Applied Sciences professor Dr Stefan Ulreich authored the report, which estimates that shipping will carry more than half of the world’s net-zero fuels by 2050.
Calling investment in green infrastructure key and citing up to 20% lower estimated production costs of green energy in what the report calls the ’Global South,’ a nebulous grouping of states the report links to countries in ’Latin America and Africa’.
“To reach the industry’s 2050 (net) zero goal, shipping’s fuel needs would require electricity from renewable sources to increase by up to 3,000 TWh,” the report said. “This is the equivalent of the entire world’s current renewable energy production.”
The report also found that, to achieve the International Energy Agency’s (IEA) Net Zero Emissions by 2050 scenario, would require an 18-fold increase in existing renewable production capacity.
Looking at hydrogen to examine the difference between production costs for renewable energy in developed countries and less-developed countries, the report said its projection of lower costs in many less-developed countries in the southern hemisphere “reflects the abundance of renewable potential, such as solar and wind power, in many African and Latin American countries, which can generate the electricity needed in the production of hydrogen fuels at much lower cost”.
The report identified ’first-mover’ governments including Germany, Algeria and Chile, who have signed multiple bilateral agreements on the production of hydrogen fuels, a potentially renewable fuel source that is seen as key for powering ships.
“Estimates show a production potential of more than 10,000 TWh for (net) zero carbon fuels in coastal regions worldwide. Shipping views investment in these areas as key to helping countries realise the potential gains present in their bilateral agreements,” the report said.
“Up to this point, there continues to be a lack of investment in zero-emissions technologies, with the IEA highlighting the total amount of corporate R&D investment for maritime has decreased, from US$2.7Bn in 2017 to US$1.6Bn in 2019.
Yet by 2050, at least half of (net) zero fuels traded globally are expected to be moved by ships, according to the International Renewable Energy Agency. Today’s report indicates this makes maritime a key enabler of the decarbonisation of land-based industrial sectors.
The report’s author, Dr Ulreich said, “While governments are beginning to realise the need to transition to fuels like hydrogen, little thought to date seems to have been given to how they will actually transport those fuels. Shipping must be part of wider energy transition negotiations, and shipping and ports are going to need investment. But with this investment comes huge opportunity for return.”
