3 ways unique partnerships are de-carbonizing shipping
Paul Young
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1. Scaling deployment of zero-emissions shipping fuels
The maritime transport industry is focused on the importance of sustainable and low-carbon energy, with decarbonization being a top priority. Zero-emissions ammonia, produced from low-carbon hydrogen, is emerging as one of the next-generation fuels because it does not emit CO2 when burned.
To scale its distribution, Yara Clean Ammonia Ammonia, the world’s largest trader and distributor of ammonia, and H?EGH AUTOLINERS (INDIA) PVT. LTD , a leading global ocean transportation provider, have agreed on a future supply deal for clean ammonia. Last spring, the two companies signed a letter of intent regarding clean ammonia supply and distribution using H?egh’s Aurora-Class PCTC vessels. The 12 vessels are equipped to operate on zero-carbon ammonia and methanol and will be some of the most environmentally-friendly car carriers ever built. They will come into operation starting from 2024 and will support Yara in its efforts to slash more than 30% of its emissions by 2030.
PY:
Ammonia as fertilizer has been used. As a ship fuels there are many concerns, especially with handling of ammonia in a safe way - https://www.forbes.com/sites/michaelbarnard/2024/01/03/ammonia-is-a-great-fertilizer-but-would-be-a-terrible-shipping-fuel/
2. Research that keeps zero-emission solutions and infrastructure on track
Partnership has made research possible that can help businesses scale action. In May 2023, the Western Australia-East Asia Iron Ore Green Corridor Consortium released the results of a special study on the feasibility of deploying ships powered by clean ammonia on current iron ore trade routes between West Australia and East Asia. The consortium, a collaboration between the Global Maritime Forum, BHP , Rio Tinto , Oldendorff Carriers GmbH & Co. KG , and Star Bulk k Carriers, and a number of value chain partners (e.g., potential clean ammonia producers), found that more than 20 vessels could sail along the corridor on zero-emission ammonia, reaching 5% adoption by 2050. An estimated 360 vessels could sail this corridor by 2050.
The study drives home that the key technologies, such as suitable engines, are on track for development, enabling the deployment by bulk carriers such as Rio Tinto (one of the largest bulk carriers in the world) in the near term.
PY:
The problem with shipping sector is about cost of buying new ships and/or retrofitting existing ships with cleaner fuels. Margins are very tight for the shipping sector. Capital costs are quite high.
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3. Demand and collective action through procurement
Collaborative procurement can help create much-needed markets for sustainable fuels. A number of examples show how the shipping industry is making this happen.
The Zero Emission Maritime Buyers Alliance (ZEMBA), initiated by the Aspen Institute, recently partnered with world-leading cargo owners to launch an RfP with hopes of attracting bids from suppliers of zero-emission ocean transport through signalling strong demand.
Amazon, a founding member of the FMC, has been instrumental in getting the ZEMBA RfP off the ground. With a goal of reducing its scope 3 emissions, the company is supporting joint efforts under ZEMBA to ship 600,000 TEUs (twenty-foot equivalent units) on zero-emission vessels over a time-span of three years – which will result in close to 1 million metric tonnes of carbon emissions reduction.
PY:
Global inflation is still stubbornly high. Converting to alternative fuels will add to cost of products and services. https://www.ajot.com/insights/full/ai-european-road-freights-decarbonization-challenge
Source - https://www.hellenicshippingnews.com/3-ways-unique-partnerships-are-decarbonizing-shipping/
I see a lot of policies happening around the world including expanding carbon taxes. I am not seeing much dialogue on tying the green transition to viable technology. Green transition costs organizations capital and operational funds! ?
Blog – EMEA new Shipping Tax – Carbon – Imports - https://www.dhirubhai.net/pulse/shippers-europe-facing-36-billion-carbon-bill-2024-paul-young-b7zpc/
Paul Young CPA CGA
Paul is a former IBM Senior Customer Success Manager / Architect that has deployed over 300 data and AI solutions across geographies and industries for the past 8 years. Paul is also an Expert on ESG policy and reporting including the ESG data journey for the regulatory, management, and operational reporting cycles