The maritime industry is undergoing a significant transformation as it strives to reduce its carbon footprint. Currently responsible for around 3% of global CO2 emissions, the sector faces increasing societal and regulatory demands to adopt more sustainable practices. This shift is particularly challenging given the reliance on traditional marine fuels like Heavy Fuel Oil (HFO), Light Fuel Oil, and Diesel/Gas Oil. These conventional fuels contribute roughly 2.5% of global greenhouse gas (GHG) emissions annually, including harmful sulphur and nitrogen oxides. To address this, the International Maritime Organization (IMO) has set ambitious goals, aiming for net-zero emissions by around 2050 and a short-term target of integrating low or zero-emission technologies into at least 5% of the fuel mix.
In response to these targets, several alternative marine fuels are being explored. Ammonia, for instance, is a mix of nitrogen and hydrogen that does not emit CO2 during combustion, though its high toxicity and corrosiveness require specialised handling. Liquefied Natural Gas (LNG) offers environmental benefits over traditional fuels, with lower SOx and NOx emissions, but remains a fossil fuel, making it a transitional option. Biofuels, derived from organic materials like plant oils and recycled cooking oils, can significantly reduce GHG emissions. However, their sustainability is a concern, especially given competition with other sectors like aviation for the same feedstocks. Hydrogen is another promising option, offering zero emissions, but it presents challenges in storage and handling due to its low energy density and the high costs associated with necessary infrastructure. Methanol, which is easier to store and handle, also provides a cleaner alternative, though its lower energy density and limited production capacity pose challenges.
The maritime industry’s attitudes towards decarbonisation are gradually shifting. A recent survey indicated that 73% of shipowners and operators consider achieving net-zero operations a strategic priority. However, the economic viability of alternative fuels and the lack of commercial incentives remain significant obstacles. Transitioning to these fuels requires substantial investment in retrofitting vessels, higher-skilled labour, and overcoming the lower energy densities compared to traditional fuels.
Regulatory frameworks are increasingly supporting this transition. The US Inflation Reduction Act, for example, offers tax incentives for producing clean hydrogen and supports carbon sequestration efforts. The EU Emissions Trading System imposes a cap-and-trade programme on the maritime industry, gradually increasing the cost of emissions to encourage a shift to alternative fuels. Additionally, the FuelEU Maritime Regulation, set to take effect in 2025, mandates GHG emissions intensity reductions, aiming for an 80% decrease by 2050. This regulation also includes mechanisms allowing compliant vessels to trade surplus GHG allowances, although a government-run marketplace for such trades is not yet in place.
The future of the shipping industry is clearly heading towards greater adoption of alternative marine fuels, driven by both regulatory pressures and growing investment in sustainable technologies. While the challenges are significant, the ongoing transition suggests that it is only a matter of time before alternative fuels become the norm in maritime operations.
The maritime industry’s journey towards decarbonisation is marked by both challenges and opportunities. With increasing regulatory support and evolving industry attitudes, the shift from traditional to alternative marine fuels is becoming inevitable. Shipowners will need to navigate these changes carefully, balancing economic viability with the pressing need to reduce emissions.
Quadrise plc (LON:QED) is an energy technology provider whose solutions enable production of cheaper, cleaner, simpler and safer alternatives to fuel oil and biofuels, proven in real world applications. Quadrise technologies produce transition fuels called MSAR® and bioMSAR™, which allow clients in the shipping, utilities and industrial sectors to reduce carbon emissions whilst also saving costs.
