Christian Berg from Amogy on the year ahead and all things green shipping.
The volume of maritime trade is projected to triple by 2050 as demand increases. However, the reliance on carbon-emitting fuel to power shipping vessels creates a significant environmental toll with maritime shipping contributing to about 3% of total global greenhouse gas emissions. This environmental cost highlights the urgency of mitigating emissions and achieving full decarbonization in alignment with global initiatives to combat climate change and reach net zero emissions by 2050.
Despite the industry’s integral role in our society, finding a viable clean energy solution has been difficult, particularly due to the fundamental energy density challenge. The existing traditional alternative options, such as batteries, have fallen short of meeting the needs of the industry’s sizeable vessels. As the industry pushes to overcome this decarbonisation challenge, we anticipate a monumental shift in the coming year. With the energy landscape expanding and novel technologies on the precipice of commercial viability, the maritime sector is on the brink of making its most significant investment in clean energy. This will enable the decarbonisation of the industry and make a more sustainable future possible.
To align with global climate goals, the International Energy Agency (IEA) has stated that global shipping emissions must remain steady through 2025, followed by a subsequent three percent annual reduction until the end of the decade. Considering the average lifespan of a shipping vessel is 25 years, those built in 2025 or after must either be powered by alternative fuels or be equipped with engines that can easily be converted to such fuel. This underscores the urgent need for significant investments in clean energy solutions to ensure compliance with established targets.
The encouraging news is that viable solutions are within reach. The maritime sector is experiencing a growing array of alternative fuels and decarbonization options, and industry stakeholders are actively exploring the integration of these fuels across various marine vessel types. Furthermore, the industry is implementing a variety of pilot and demonstration projects aimed at testing these fuels and cutting-edge technologies. For example, Amogy is retrofitting a 1957 tugboat that once ran on diesel generators and electric motors with a 1 MW carbon-free ammonia-to-electrical power system. The vessel is set to sail in 2024, which will demonstrate to the industry that ammonia is a feasible, near-term clean solution.
Additionally, according to Clarksons Research, the demand for maritime vessels utilizing alternative fuels reached its highest number in 2023 and is expected to grow even more in the coming years. Alternative-fuelled vessels represent 12% of new vessel orders in 2023, growing from nearly zero in 2013. Adding to this positive momentum are regulatory plans and government policy strategies which help facilitate this growth. Guiding policy documents like the US Ocean Climate Action Plan (OCAP) and the Energy Efficiency and Decarbonization Technical Guide, developed by multiple federal departments have set goals and action items for the development and utilization of clean energy solutions in shipping.
The maritime sector’s journey towards sustainability is no doubt complex and demands collaboration among global stakeholders to overcome challenges and achieve ambitious and much needed goals. These collaborative efforts between industry and government will play a vital role in catapulting the maritime sector towards decarbonization. Despite the challenges, the current landscape presents an opportune moment for progress. Alternative fuel choices are expanding, novel technologies are reaching commercial viability, and the policy and regulatory framework are facilitating a smoother transition than ever before. 2024 will be a pivotal year for the maritime industry and, at Amogy, we are excited to see what the year will bring.
