What It Will Take to Decarbonize Shipping

by Mike De Socio (GreenBiz) ... 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.

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

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.

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.

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.

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 (Dave Lee, senior account manager at ABB Marine & Ports). "The vessel operator needs that push, needs that certainty."

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.

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 (Chris Cannon, director of environmental management at the Port of Los Angeles) said. He hopes that testing new fuel technology — whether ammonia or hydrogen — will lead to wider adoption and cost parity with fossil fuels. READ MORE