Posted on December 10, 2023
Thirty leaders in the shipping sectors – including cargo owners, ship operators, ports, bunkering companies, and equipment manufacturers – signed a Joint Commitment, organized by the UN High Level Champions and RMI, today at COP28 to enable the use of renewable hydrogen-derived shipping fuel this decade to meet maritime industry decarbonization targets. The Commitment includes important targets for fuel use, fleet development, and port infrastructure needed to get the nascent green hydrogen industry to scale.
To reach targets set out in the International Maritime Organization (IMO)’s 2023 Strategy, adopted by 175 member states earlier this year, the average ship’s greenhouse gas intensity will need to be reduced by 86% by 2040. Achieving this requires large-scale and rapid growth in the use of zero or near zero-emission fuels, of which green hydrogen-derived fuels like ammonia and methanol will play a crucial role. Legally binding international regulations that enter into force in 2027 will require the use of low-emissions fuels.
“For a general shipping company such as MOL, there is no single solution for vessel fuel. We will promote the adoption of optimum fuels including hydrogen, ammonia and any other potential green fuels for each business on the premise of achieving net zero in 2050 and our interim milestones,” said Takeshi Hashimoto, CEO at Mitsui O.S.K Lines, Ltd. (MOL). MOL is one of the world’s leaders in marine transportation. MOL’s fleet, approximately 800 vessels consist of a wide variety of types of ships. “In addition to working on the development and operation of vessels from the perspective of fuel users, we will work with diverse partners to urge upstream players of the fuel supply chain to join our efforts to expand the use of new fuels.”
As part of the Commitment, green hydrogen producers agreed to produce 11 million tons of the low-emissions fuel for use by the shipping sector by 2030. Longer term, a decarbonized global shipping sector will become one of the largest demand sources for green hydrogen, projected to account for approximately 15 percent of total demand by 2050.
“In the mission to decarbonize shipping using green hydrogen and derivatives, global collaboration is key. This statement highlights the need for all participants across the value chain to collaborate deeply on both the supply and demand sides. We’re not building big green energy projects; we’re catalyzing change. It’s time for a determined step forward to foster projects that go well beyond current thinking on scale and get us straight onto the scale up fast track,” said Alex Hewitt, CEO of CWP and chair of the Green Hydrogen Catapult.
To meet growing demand and enable decarbonized vessels, fuel supply and infrastructure must be present at ports on both sides of shipping routes, a fact that will require significant international coordination and investment.
“In the Pacific Northwest, we are actively working with our industry partners to catalyze development of a regional market for zero emissions fuels. We see green hydrogen as having significant potential to decarbonize maritime,” said Sam Cho, Port of Seattle Commission President and Co-Chair of The Northwest Seaport Alliance, a marine cargo operating partnership of the Port of Seattle and the Port of Tacoma. “Green corridors focusing on cruise to Alaska and cargo with the Republic of Korea are already underway. A critical next step is to look beyond our own port, and to ensure that our strategies align with future planning and investment in fuel supply in our region and around the world.”
“Green corridors focusing on cruise to Alaska and cargo with the Republic of Korea are already underway. A critical next step is to look beyond our own port, and to ensure that our strategies align with future planning and investment in fuel supply in our region and around the world.”
Ports and ports’ enablers have added their support for the Call to Action, committing to invest in infrastructure and safety projects to support re-fueling of ships with green hydrogen and its derivatives.
Rasmus Bach Nielsen, Global Head of Fuel Decarbonization for Trafigura, said: “We will only achieve the deep decarbonization of shipping by switching to zero-emission fuels derived from renewable-based hydrogen. As one of the world’s largest charterers of vessels, the commitments we are making alongside others should encourage investment by ports and port enablers serving shipping routes to invest in the necessary infrastructure. This in turn will help further incentivize the production of green hydrogen and hydrogen-derived fuels for use in shipping.”
Keld R. Demant, CEO of Bunker Holding Group, said: “As the world’s largest bunker supplier, Bunker Holding Group fully supports the IMO GHG Strategy for decarbonizing the shipping industry. We contribute by partnering with alternative fuel producers, and handle trades and logistics related to the last mile delivery. But to succeed, all industry stakeholders along the value chain need to stand together.”
Equipment manufacturers also joined as signatories, committing to support research and development efforts to further green hydrogen-based fuel deployment in the maritime sector.
“Regardless of what other future-fuels eventually come into play, green hydrogen and green fuels derived from it will undoubtedly play a major role in all scenarios. At MAN Energy Solutions, we strongly believe that shipping is the ideal enabler for a hydrogen ramp-up, consuming as it does around 300 million tons of conventional fuels annually,” said Uwe Lauber, CEO of MAN Energy Solutions. “Currently, our subsidiary – H-TEC SYSTEMS – is building a manufacturing facility for PEM electrolysis stacks for green hydrogen, which will add to the necessary scaling and market for zero-emission fuels. We are happy to add our voice to the growing alliance pushing for marine decarbonization.”
Signatories called on governments to follow suit and support private sector collaboration with ambitious fuel standards and clean fuel mandates. To date, 41 governments have formulated national hydrogen strategies, many of which specifically address the shipping sector. Further action is needed to align and commit to well-to-wake emissions accounting, creating an enabling policy environment for verifiable low-emissions fuels.
“In support of our collective actions we call on the IMO and member States to adopt a GHG pricing mechanism, a levy, as the most appropriate mechanism to achieve a just and equitable transition, among other measures. Collective action and cross sector cooperation is vital to make sure that shipping’s zero emission transition happens smoothly and quickly,” Nielsen at Trafigura said.
Demant of Bunker Holding Group added: “To stimulate the demand and supply of zero or near-zero fuels, IMO should adopt pricing incentives as well as requirements for alternative fuels. Regulatory insurance is a prerequisite for the necessary investment in production, infrastructure, and new vessels.”
About RMI
RMI, founded as Rocky Mountain Institute, is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous, zero-carbon future for all. We work in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing. More information on RMI can be found at www.rmi.org or follow us on Twitter @RockyMtnInst
About MAN Energy Solutions
MAN Energy Solutions enables its customers to achieve sustainable value creation in the transition towards a carbon neutral future. Addressing tomorrow’s challenges within the marine, energy and industrial sectors, we improve efficiency and performance at a systemic level. Leading the way in advanced engineering for more than 250 years, we provide a unique portfolio of technologies. Headquartered in Germany, MAN Energy Solutions employs some 14,000 people at over 120 sites globally. Our after-sales brand, MAN PrimeServ, offers a vast network of service centres to our customers all over the world.
About the Port of Seattle
A highly diversified public port, the Port of Seattle owns and operates some of the Pacific Northwest’s most essential infrastructure, including Seattle-Tacoma International Airport (SEA), and maritime industrial facilities for commercial fishing, cruise, and recreational boating. The Port of Seattle’s promotes economic opportunities and quality of life by advancing trade, travel, commerce, and job creation in an equitable, accountable, and environmentally responsible manner.
About the Northwest Seaport Alliance
The Northwest Seaport Alliance is a marine cargo operating partnership between the Port of Seattle and Port of Tacoma. Combined, the North and South harbors are a major North American gateway for containerized trade and the handling of non-containerized commodities such as bulk, breakbulk, project/heavy-lift cargoes, and automobiles. Both partner ports and the Alliance have made a voluntary commitment to zero maritime emissions by 2050 or sooner.
About Bunker Holding Group
Bunker Holding Group is the global leader in purchasing, selling, and supplying marine fuel and lube oil as well as providing risk management and other vital services for the shipping industry. The company operates via more than 1,668 ports worldwide and is present in 32 countries with 62 offices and more than 1,650 skilled employees.
