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Report: Shipping May Need All Existing Renewable Power for Future Fuel

But the energy transition may also offer shipowners "huge" economic opportunities

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Published May 17, 2022 11:44 PM by The Maritime Executive

A new study from the International Chamber of Shipping confirms expectations that the maritime industry will have to surmount a real ramp-up challenge for its future fuel supply as it makes the transition to zero-carbon operations. 

According to ICS-sponsored research authored by Prof. Stefan Ulreich, an energy industry expert at the Biberach University of Applied Sciences, the green-energy requirements of tomorrow's shipping industry will be staggering. In order to attain the 2050 net-zero carbon goal, shipping may have to source 3,000 terawatt-hours of renewable electricity per year in order to make green hydrogen, the key ingredient in green ammonia and green methanol. This is the equivalent of the entire world's current renewable energy production (excluding hydropower, which accounts for another 4,400 terawatt-hours per year). 

According to the report, this tremendous supply requirement presents a giant economic opportunity, particularly for countries in the global south. To seize that opportunity, "hydrogen and (net) zero carbon fuel facilities must be urgently developed to ensure access to a highly competitive market," and new export policies and trade agreements will have to be set up to match. Algeria, Argentina, Australia, Chile and Morocco are already under way in developing policy approaches and identifying potential projects, the report noted.

There will also be significant opportunities for shipping. The rest of the global economy will also be transitioning to zero-carbon fuels on the same timetable, and will need 18 times the current quantity of installed renewable power capacity. Many of the most economical fuel supply sources will be geographically distant from energy-hungry markets. High-potential locations in Africa, Latin America and the Middle East - with abundant wind, sun or both - could make hydrogen at great scale and reduced cost. 

With an estimated 10,000 TWh potential for zero carbon fuel production located near coastlines, shipping is in a good position to help. If shipowners and seaports can secure enough investment to meet the transport needs of the next global energy market, there will be a "huge opportunity for return," according to Prof. Ulreich. 

“Shipping will be a key enabler of the global energy transition, providing cost effective and flexible solutions to transport at least half of the net zero carbon fuels traded around the world," said Stuart Neil, the director of strategy and communications at ICS. “A great deal is talked about the global energy transition to zero emission fuels outside of shipping. But what we have found in this report is that there is a tremendous opportunity for all.”