Zero-Carbon Fuels and Marine Shipping: Both a Will and a Way?

The marine shipping sector consumes around 10 quadrillion Btu of fuel and emits one billion metric tons of carbon dioxide each year. That’s more than all of Germany’s emissions, more than all of Saudi Arabia’s emissions, and roughly equal to the emissions from all passenger vehicles in the United States. By any reasonable measure the shipping industry is a major global emitter, one of the economic sectors that must be fully decarbonized by midcentury in order to keep global warming below 1.5 degrees C.

Eliminating GHG emissions from marine shipping is an enormous undertaking, but the technological path forward is reasonably clear and has been for a few years now. What has been missing is the requisite will among the shipping industry and regional and international regulators to require and implement the steps that need to be taken.

Greenhouse gas emissions can be eliminated from the marine sector largely by shifting from heavy fuel oil and marine diesel to zero-carbon fuels (ZCF) like hydrogen and ammonia, as detailed by CATF (see here and here), other nongovernmental organizations (here and here), academic and government experts (here and here), and financial institutions (here and here).

Ammonia, which is made by combining hydrogen with nitrogen captured from ambient air, looks like a particularly promising marine fuel, especially for transoceanic voyages. It can be used in fuel cells or—more conveniently, at least in the near-term—in retrofitted or purpose-built versions of the massive two- and four-stroke internal combustion engines that propel containerships, tankers, and bulk carriers around the world. Ammonia (NH₃) contains no carbon atoms so no carbon dioxide is produced when it is converted into energy, regardless of whether that conversion happens in a fuel cell or in a reciprocating engine. And, as explained more fully here, production technologies that utilize carbon capture and storage systems or renewable- or nuclear-derived electricity can make ammonia with little to no associated greenhouse gas emissions.

The opportunity that zero-carbon ammonia affords for shipping decarbonization is apparent to a growing set of innovative companies and institutions, many of which are taking steps toward full-scale commercialization of ammonia-fueled shipping technology. Some recent examples include:

• August 2020: Three Japanese shipping companies—NYK Line, Japan Marine United Corporation, and Nippon Kaiji Kyokai (ClassNK)—announced a joint R&D agreement aimed at the commercialization of an ammonia-fueled ammonia tanker ship.
• October 2020: Lloyd’s Register issued separate “approvals in principle” (see here and here) for ammonia-fueled vessels under development by South Korean shipbuilders Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME). SHI and its project partners MISC, a major Malaysia-based international shipping line, and MAN Energy Systems, which is developing ammonia-compatible marine engines, are working on an ammonia-fueled tanker ship; DSME’s design is for an enormous (23,000 TEU) container ship.
• February 2021: The Maritime and Port Authority for Singapore—which, as the world’s largest bunkering port, is poised to play a leading role in the shift to zero-carbon marine fuels—announced it would collaborate with leading ammonia producer Yara International, Lloyd’s Register, SHI, and MAN Energy Systems to develop and promote ammonia-fueled shipping.
• March 2021: Under an agreement reached by the Netherlands-based fertilizer producer OCI, Hartmann Gas Carriers of Germany, and MAN Energy Systems, OCI will charter new ammonia-fueled ammonia tankers to be built and operated by and Hartmann and powered by MAN engines. The partners will also look for opportunities to retrofit existing marine engines to make them ZCF-compatible.
• March 2021: A roster of major companies and institutions in the marine sector—A.P. Moller–Maersk, Fleet Management Limited, Keppel Offshore & Marine, the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, Sumitomo Corporation and Yara International—agreed to conduct a feasibility study on supplying the Port of Singapore with ammonia bunker fuel. The supply chain assessment will reportedly consider “the development of a cost-effective green ammonia supply chain, design of ammonia bunkering vessels, as well as related supply chain infrastructure.”
• April 2021: German industrial conglomerate thyssenkrup inked an “engineering and supply contract” with major ammonia producer CF Industries to “deliver a hydrogen plant for the production of green ammonia at [CFI’s] Donaldsonville manufacturing complex in Louisiana,” per news reports. The companies identified the marine sector as a target consumer.

These companies are at the vanguard of what is likely to be a challenging journey. Container ships and bulk carriers consumed 118 million metric tons of heavy fuel oil-equivalent fuel in 2018, per IMO data, accounting for half the sector’s total fuel consumption. If those same ships ran on ammonia instead (assuming 1.89 metric tons of ammonia are needed to replace a metric ton of marine fuel, as indicated in this 2020 analysis by Kim et al.), they would have consumed 224 million metric tons of ammonia. Total global ammonia production is about 180 million metric tons per year, and almost all that ammonia is made using technologies that emit significant amounts of carbon dioxide.

Is there a way to make 224 million metric tons of ammonia with technologies that emit little to no CO₂? More immediately, is there a way to supply a 5000 TEU containership with the 33,000 metric tons of zero-carbon ammonia fuel it would consume during a year’s worth of voyages between, say, the Ports of Los Angeles and Shanghai?  (The second question is particularly relevant to coZEV, a joint effort by leading retail companies, CATF, the Aspen High Seas Initiative, and other organizations to build demand for first-of-a-kind zero-emission containership routes between major international seaports. The first such route is likely to be served by a 5000 TEU ammonia-fueled containership.)

It will take approximately 400 new world-scale clean ammonia production plants to make the 224 million metric tons of zero-carbon ammonia required to decarbonize the global fleet of containerships and bulk carriers. (By world-scale, we mean a facility or complex that makes about 560,000 metric tons of ammonia per year from approximately 100,000 metric tons of hydrogen.) That is an undeniably massive undertaking. We have the know-how to do it, though, and we can start making progress one clean ammonia plant and one zero-emissions vessel at a time. If one of the first world-scale clean ammonia plants was located near a major port, just 6% of its annual output could fuel a 5000 TEU emissions-free containership for a year.

What’s needed is the will to push forward—the will to develop and implement new policies and new business models aimed at driving down the price of zero-carbon ammonia and pulling it into the marine fuel market.

Because most transoceanic shipping occurs outside the claimed jurisdiction of national governments, regulatory authority over the shipping sector is thin and spotty. The authority that does exist is mostly reposed in the UN International Maritime Organization (IMO), a conservative and consensus-driven institution headquartered in London. The IMO has developed important environmental regulatory requirements, such as a 2020 regulation that sharply constrains vessels’ sulfur dioxide emissions, but its track record is full of environmental initiatives that were delayed, blocked, or ineffectual. Notably, the IMO’s 2018 greenhouse gas reduction requirement is literally a half-measure—it only requires the sector to reduce GHG emissions by “at least 50% by 2050”—and the body has failed so far to establish meaningful mid-term milestones that could generate useful momentum. Efforts to strengthen GHG regulations have been frustrated by delegates from economically powerful countries and the shipping industry, which has a large consultative role in IMO proceedings.

Over the past year, however, as the global imperative to responsibly tackle climate change has solidified, other stakeholders in the marine space have begun charting a different course for the sector, one that is consistent with a 1.5 degree C limit on warming. A string of recent developments signal to the IMO and industry laggards that change is coming:

• The European Commission voted to bring GHG emissions from transoceanic vessels—even, potentially, emissions that occur far from Europe—within the purview of the Emissions Trading System (ETS), the carbon credit trading platform at the center of Europe’s climate change regulatory strategy.
• The United States announced it would push the IMO to require full decarbonization by midcentury. In an April 2021 speech, US Climate Envoy John Kerry committed the United States “to work with countries in the International Maritime Organization (IMO) to adopt a goal of achieving zero emissions from international shipping by 2050 and to adopt ambitious measures that will place the sector on a pathway to achieve this goal.”
• A commitment to marine sector decarbonization is also included among the climate change mitigation measures set out in the United States’ new Nationally Determined Contribution (NDC): “While the emissions pathways analyzed focus on domestic emissions reduction, the United States is also exploring ways to support decarbonization of international maritime and aviation energy use through domestic actionas well as through the International Maritime Organization (IMO) and International Civil Aviation Organization (ICAO).”
• Major companies that contract with the shipping industry to move millions of tons of goods are starting to pressure shipping lines to cut their emissions. The retail majors behind coZEV, mentioned earlier, want to cut their scope 3 emissions by helping to decarbonize the transoceanic supply chains they use. Similarly, companies that sign onto the Sea Cargo Charter commit to tracking and reporting the greenhouse gas emissions connected to the seaborne transport of the steel, grain, and other bulk goods they trade, and to assess how their performance compares with global emission reduction targets. And a recent declaration by Heineken that it would shift all its business to carbon-neutral shipping services by 2040 comes in the wake of an earlier announcement by Unilever that it would eliminate all emissions from its supply chain, including those from marine shipping, by 2039.

The emerging evidence of a will-to-decarbonize the marine sector—among pioneering retail and commodity companies that are willing to invest in strategies to eliminate greenhouse gas emissions from the marine portion of their supply chains, among innovative shipbuilders and engine technology developers, and, most recently, among key policymakers—is just a start. But it’s a start we can build on.