Environment

Energy Transitions Commission: Unlocking the first wave of zero-emission shipping

Report calls to attention to five key actions first movers can take to make tangible progress towards zero-emission pilots over the next three to four years.

Published

4 years ago

November 13, 2020

Admin

The Energy Transitions Commission, a global coalition of leaders from across the energy landscape committed to achieving net-zero emissions, on Thursday (12 November) published a new report that catalogues the barriers to the early adoption of zero-emission technologies throughout the entire energy value chain.

More importantly, the Commission said the report calls to attention to five key actions that first movers can take to make tangible progress towards zero-emission pilots over the next three to four years:

Join forces to fast-track technology trials and regulatory approvals
Choose pilot locations that offer privileged access to low-cost renewable electricity
Seize opportunities to repurpose and retrofit existing infrastructure and assets
Co-invest in critical equipment such as bunkering assets and vessels
Form consortiums with key value chain actors to establish voluntary offtake agreements and distribute cost across the value chain to the end-consumer

Renewable electricity for the production of green hydrogen represents the largest share of the total pilot cost for the ammonia and methanol fuel pathways that the report explores.

First movers can lower electricity cost at the outset by selecting the right geographical locations for the energy production and by entering into long-term corporate purchase power agreements to secure large volumes of clean power at the lowest costs.

Though first movers will have to contend with higher investment and operational costs, the report shows that this can be mitigated through a green fuel premium, which would help distribute the additional cost throughout the value chain up to the end-consumer.

“Despite the higher business to business costs of operating zero-emission vessels, the impact on end consumer prices is likely to be limited. The increase in the cost of a high-end athletic shoe will represent around 0,5-1% of the total cost,” said Michael Parker, Chairman, Global Shipping, Logistics & Offshore, Citi and Co-Chair of the Getting to Zero Coalition’s Motivating First Movers workstream.

To deploy zero-emission vessels globally, the Commission said new and existing stakeholders will need to work together in creating a new green shipping value chain.

It added that forming consortiums with core value chain actors is another key action first movers can undertake to lower pilot costs.

“Shipping’s decarbonisation cannot be achieved without collaboration. Forming consortiums will allow first movers to cooperate easily, diversify risks across multiple actors, enter into voluntary offtake agreements, and provide robust demand signals,” said Randy Chen, Director and Vice Chairman, Wan Hai Lines and Co-Chair of the Getting to Zero Coalition’s Motivating First Movers workstream.

To lower investment costs, early adopters can also retrofit existing infrastructure, and establish industrial clusters of industrial sectors.

“The economics of zero-emission shipping will depend massively on the cost of zero-emission fuels. Commitments from cargo owners to procure “green shipping” services at a premium price will be crucial to unlock a first wave of commercial scale project,” added Faustine Delasalle, Director, Energy Transitions Commission.

“A combination of tactical corporate decisions reducing fuel costs, enhanced public support to investment, and collaborations across the maritime value chain can also boost the commercial viability of zero-emission shipping for first movers.”

The report emphasizes that governments have to play a decisive role in supporting the shipping industry’s transition to zero-emission. This ranges from direct grants, offering concessional loans to first movers, waiving electricity taxes and grid fees, co-investing in zero-emission pilots, to exploring measures such as a carbon levy.

“Governments have a crucial role in incentivizing and accelerating shipping’s green transition. By supporting first movers, governments can help generate the technology learnings and economies of scale that will allow the market to take over, similarly to the role governments has played within renewable energy technologies such as solar and wind,” added Kasper Søgaard, Head of Research at the Global Maritime Forum, a Partner of the Getting to Zero Coalition.

The first wave of pilots will prove the technological and commercial case for zero-emission shipping, create demand signals for fuel producers and engine manufacturers, set the template for regulatory measures, and provide the foundations of the long-term infrastructure needed for the decarbonization of maritime shipping.

The analysis focuses on green ammonia and green methanol use in pilots involving containerships, but insights will be relevant for other potential zero-emission fuel options.

The full report “The First Wave – A blueprint for commercial-scale zero-emission shipping pilots” is available for download here.

Photo credit: Energy Transitions Commission
Published: 13 November, 2020

Methanol

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

Korean firm’s MoU with AE Risinājumi will see construction of Latvia’s first commercial-scale green methanol production plant, which will supply green methanol to ships in EU’s maritime fleet.

Published

7 hours ago

December 2, 2024

Admin

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

South Korean clean energy firm PLAGEN on Friday (29 November) signed an MOU with Latvian company, AE Risinājumi, for the production of green methanol in Latvia at the “2024 Latvia-Korea Business Forum” hosted by the President of Latvia.

The agreement will result in the construction of Latvia's first commercial-scale green methanol production plant, which will supply green methanol to ships in the EU's maritime fleet, contributing to the reduction of greenhouse gas emissions from maritime transportation.

PLAGEN's MoU aims to produce 20,000 metric tonnes (mt) of green methanol per year and will begin feasibility studies in the first half of 2025, and full-scale production will begin in 2028.

With 53% of Latvia's land area covered by forests, timber production and wood processing make a significant contribution to Latvia’s economic production, which generates a large amount of forest residues and wood wastes. In addition, Latvia also has an abundance and low price of renewable electricity from wind power.

Latvia is one of the most competitive countries in the European Union, as it can produce clean methanol at a competitive price by using abundant wood waste as a raw material and renewable electricity from cheap wind power.

The use of abundant forest residues and wood wastes as a feedstock and cheap renewable electricity from wind power makes it possible to produce green methanol with a competitive price, making Latvia is one of the most competitive countries in the EU.

In the European Union, the European Emissions Trading Scheme (EU-ETS) will come into effect in 2025, requiring shipping companies to purchase carbon credits for their greenhouse gas emissions.

In addition, the EU is implementing FuelEU Maritime, which aims to reduce greenhouse gas emissions by 2% below the 2020 average by 2025 and 80% by 2050. This is expected to result in an energy transition to green methanol.

In July 2023, the International Maritime Organization (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050, and plans to introduce full-scale regulations from 2027, and shipping companies have begun ordering methanol-powered ships fueled by green methanol, a carbon-neutral fuel.

“We expect to start producing green methanol in Latvia in 2028, which will reduce greenhouse gas emissions from EU maritime transport vessels and contribute significantly to the revitalization of the Latvian economy and national energy security,” said John Kyung, CEO of PLAGEN.

In November 2024, PLAGEN completed the purchase of an industrial complex and received a government permit for the construction of the country's first green methanol plant in Dongjeom Industrial Complex in Taebaek City, Gangwon-do.

The project, which will produce 10,000 mt per year, is scheduled to begin construction in the first half of 2025 and begin production in the second half of 2027.

Photo credit: PLAGEN
Published: 2 December, 2024

LNG Bunkering

Molgas commences LNG bunkering operations in United Kingdom

Firm successfully completed the first LNG bunkering of “MV Glen Sannox” since the ship was handed over to CalMac Ferries Limited last week.

Published

7 hours ago

December 2, 2024

Admin

Molgas commences LNG bunkering operations in United Kingdom

Molgas Group on Friday (29 November) said it successfully completed the first LNG bunkering of the MV Glen Sannox since the ship was handed over to CalMac Ferries Limited last week, marking its entry into the United Kingdom.

“We would like to thank CalMac Ferries Limited and Ferguson Marine (Port Glasgow) Limited for their trust and long-term collaboration,” the firm said in a social media post.

“This project not only represents a significant step forward in the adoption of cleaner fuels in the maritime industry of the United Kingdom but also for the expansion of our Pan-European Supply Network for the Marine Segment to receive (bio)LNG via various supply assets across multiple countries and ports.”

Photo credit: Molgas Group
Published: 2 December, 2024

Methanol

GENA Solutions: Total renewable and low-carbon methanol project pipeline rises from 38.6 to 39.9 Mt by 2030

Information shared by the Methanol Institute meant to assist the maritime industry in the adoption of methanol as a mainstream marine fuel heading into IMO 2030/2050.

Published

7 hours ago

December 2, 2024

Admin

GENA Solutions: Total renewable and low-carbon methanol project pipeline rises from 38.6 to 39.9 Mt by 2030

The Methanol Institute recently shared with Manifold Times the renewable and low-carbon methanol project pipeline November 2024 release produced by Finland-based GENA Solutions Oy (Green Energy Analytics).

Information from the release is meant to provide the bunkering publication’s readers with insight on renewable methanol availability, and to assist the maritime industry in the adoption of methanol as a mainstream marine fuel heading into IMO 2030/2050.

Key highlights of the November 2024 release are as follows:

The renewable methanol project pipeline increased from 30.5 Mt in October to 31.8 Mt in November (+1.3 Mt). The total renewable and low-carbon methanol project pipeline grew from 38.6 Mt to 39.9 Mt.
As of November 2024, GENA tracks 113 e-methanol plants and projects with total capacity of 18.7 Mt (+0.6 Mt), 77 biomethanol plants and projects with total capacity of 13.1 Mt (+0.7 Mt), and 14 low-carbon methanol plants and projects with total capacity of 8.1 Mt.
Eight projects were added in the November release: four in China, three in Europe and one in Africa. One project was excluded from the Project Navigator due to a change in the final product.
One e-methanol project has started construction in the last month. One small-scale e-methanol plant has started production. Currently, 2.6 Mt of renewable methanol facilities are either operational or under construction.
We estimate that renewable methanol capacity by 2030 could reach 7–14 Mt (22–44% of the project pipeline). However, a lack of long-term off-take agreements and insufficient state support may result in a lower capacity range of 3–7 Mt.