GCMD addresses key questions on maritime bunker fuel transition

The Global Centre for Maritime Decarbonisation (GCMD) on Wednesday (14 February) said Dr Sanjay C. Kuttan, Chief Technology Officer at GCMD, recently shared his perspectives on “Greening the Marine Fuel Mix: Evaluating Current & Future Fuels Markets” at the 8th Green Shipping Summit in Rotterdam.

Reflecting on the event, he shares four key questions on the work needed for maritime fuel transition.

How can we achieve decarbonisation goals with current inefficiencies in the marine fuel supply chain?

Currently, 2/3 of global marine bunker volume goes through 17 ports around the world. This bunkering pattern is not built to cater for green fuel production and bunker demand. 

Further, the GCMD-BCG survey revealed that shipowners and operators prefer to bunker more frequently than to carry more fuel, due to the lower energy densities of green fuels. This could result in new bunkering ports, creating a complex green fuel distribution system.

Biofuels adoption and a greater emphasis on energy efficiency technologies can facilitate a more decentralised and efficient supply chain structure.

Can green fuels procurement policies play a bigger role in reducing emissions? 

We are currently seeing tailwinds enabling green fuels procurement policies. 

First, we believe that IMO’s adoption of life cycle analysis of marine bunker fuels, coupled with strong policy support, will pave the way for a better evaluation of the alternative fuels markets.

Second, the increasing adoption of Science Based Targets Initiative’s definitions of emissions reductions for low carbon fuels will set the right tone for addressing IMO’s 2050 net zero target.

These developments, together with efforts such as GCMD’s initiative to establish an assurance framework for the quality, quantity and GHG abatement of drop-in green fuels will crystallise procurement guidelines. 

How can we unlock financing to address the “whale-on-the-shore”? 

Maritime sector stakeholders are often bogged down by a multitude of commercial and operational priorities and may not be focused on addressing the “whale-on-the-shore”: the ‘first-of-its-kind’ infrastructure needed for green fuel delivery. 

Vessel owners are grappling with unknowns about access to green fuels when ordering future IMO-compliant vessels.

To mitigate this uncertainty, vessel owners can aggregate demand to bring in green fuels cheaper and sooner. 

Marine service providers can further reduce their financial exposure by cost-sharing assets through joint ventures to undertake these infrastructure projects.

What can we do in the meantime?

With zero-carbon fuel availability uncertain and cost premium high, shipowners are increasingly looking to Onboard Carbon Capture and Storage (OCCS) as a key interim solution. 

To do so, ports need to have the right infrastructure, coupled with an ecosystem that will utilise or sequester the captured carbon. This system-of-systems is crucial to justify the adoption of OCCS by ship owners and operators.

Photo credit: Global Centre for Maritime Decarbonisation
Published: 19 February, 2024