A new report from the International Chamber of Shipping (ICS) exposes the scale of the industry’s decarbonization challenge and sets the scene for governments to back the industry’s proposal for a global US$5bn R&D fund to de-risk future investment.
The report warns that a failure by governments to support the industry’s initiative to accelerate R&D risks trillions of dollars of investment being misallocated, making it impossible for the sector to decarbonize, reports Clean Shipping International.
Decarbonizing shipping
The report looks at different options to help decarbonize shipping and achieve the greenhouse gas (GHG) reduction targets established by IMO, including the use of ammonia, hydrogen, and batteries to power the global fleet.
However, the report finds that currently, zero-carbon fuels are not available at the size and scale needed to drive decarbonization.
While there are several promising potential zero-carbon fuels and technologies, the emissions reductions called for by the international community and industry require a huge amount of research and development before they can become viable.
This represents a ‘financial iceberg’ for the industry, as pressure to regulate emissions is currently moving faster than supply chains’ ability to keep pace.
Without innovation and a massive scaling-up of research and development, there is a significant risk of stranded assets that will impact nation-states, the finance community, and the shipping industry.
The report examines three alternative fuels in more detail:
- ‘Green’ Ammonia – for which production would have to rise by 440 million tonnes – more than treble current production – requiring 750 gigawatts of renewable energy. This means that shipping alone would consume 60% of the world’s current renewable energy production of 2,537 gigawatts.
- Hydrogen – current commercial production emits a large amount of GHG, negating its green credentials, though research is underway to prevent this.
- Fuel Cells and Batteries – a typical container vessel would require the power of 10,000 Tesla S85 batteries every day.
R&D Investment is a necessity
To upscale these and other infant technologies into adoptable solutions, large levels of investment in R&D is required. Operational improvements alone cannot achieve the 90% efficiency targets needed to reach the IMO 2050 goal of halving emissions compared to 2008.
ICS Secretary General, Guy Platten said:
“A quantum leap in decarbonized technology similar to the switch from sail to steam over a century ago is required if shipping’s current CO2 reduction targets are to be achieved. However, we do not have the same luxury of time to transform. This report sheds some light on potential solutions that will have to be adopted if we are to steer the shipping industry away from fossil fuels. But the reality is that companies need a centralized fund that can catalyze an intense injection of R&D investment to turbocharge projects. Without it, we are not going to achieve zero-emission shipping. The scale of the financial challenge is as great as the technical challenge. We need certainty and action to avoid the approaching financial iceberg as we set course for a zero-carbon future.”
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Source: Clean Shipping International
