This article was originally published by Forum for the Future and is republished with permission.
Cargo ships are famously slow to change course. And having worked with the shipping industry for many years on decarbonisation, I think that’s rather metaphoric. So after the UN-backed International Maritime Organisation finally adopted a carbon target – to reduce emissions by 50% (against a baseline of 2008) by 2050 – late last year (a reasonable start, but not enough), and as leading players push on with their own, more ambitious targets (e.g. Sweden and Maersk), there is finally impetus to turn the rudder. Yet ask a shipping executive which is the best route to take and you will either get a quizzical silence or a vigorous case for one ‘winning’ option, be it gas, nuclear, hydrogen, ammonia or biofuels. The trouble is there’s no consensus, and with a ship’s lifespan of at least 20 years, investors, shipbuilders, ports and fuel suppliers need to know what infrastructure to start investing within the next 18 months or so.
The options for shipping decarbonisation
Currently, virtually all 50,000 or so merchant ships burn heavy fuel oil or liquid natural gas and that creates 3.1% of global carbon emissions. The alternatives are for ships to burn zero-carbon hydrogen or ammonia produced by renewable electricity. These are attractive routes as they are scalable, but they are at an early stage of development and would require very substantial investment in R&D, plus changes in infrastructure on ships and in fuelling. Existing ships with fuel tanks cannot realistically be converted to store and burn them so they are options for new vessels only.
Conversely, biofuels – liquid or gas hydrocarbons produced from crops or waste biomaterials – are viewed as a ‘drop-in’ solution as they are very similar to the fossil fuel-heavy oil or liquefied natural gas currently burnt. So they can be used in existing ships with light touch adjustments to their engines and fuel tanks. They can and are fuelling vessels already, making them an attractive solution to at least start the maritime industry’s decarbonisation journey.
The challenges for biofuels
The Sustainable Shipping Initiative (SSI), a group of companies and NGOs working to create a sustainable future for the industry, has set an ambition for the industry to be zero-carbon by 2050 at the latest, which is intended to be in line with a 1.5OC trajectory. So as you’d expect, they want to get to the bottom of the best way forward and one of the least charted parts of the system is the sustainability and availability of biofuels. Are they the long-term panacea, a “no-go” or a short-term accelerant? In my role at Forum for the Future (which specialises in complex sustainability challenges and is a member of the SSI), I am leading an inquiry into these fascinating questions.
Their ability to make a rapid dent in emissions trajectories is one I find enticing as fast reductions are critical to curbing global heating. The main challenges, amongst a formidable set, are the indirect carbon emissions that can result if they are sourced from crops grown on land, largely due to land-use change to grow crop-based fuels.
Like many, I recall the horrors of deforestation of primary rainforests to make way for palm oil plantations driven by the European Union’s biofuel mandate. In many cases, the released carbon stores meant biofuels emitted more carbon than the fossil fuels they replaced. There are non-land based options but their supply is more limited. The IPCC’s Special Report on Land and Climate Change dives into the potential for bioenergy crops to contribute to a 1.5C limit to warming and the authors point out the potential for conflicts with natural habitat, food crops, afforestation and energy crops.
But they do also show that there are scenarios where bioenergy crops have little impact on biodiversity or food security, and, conversely, ones where they are highly impactful. So it seems critical to ‘get it right’ and not repeat the past debacles. Shipping also faces competition for biofuels from aviation and the increasing demand for biodegradable plastic products derived from biofuels. So it’s not able to act without at least some coordination.
The current inquiry into the role of biofuels in decarbonising shipping
I hope you are getting the picture that there’s no straightforward answer to the right role for biofuels! So far, we have engaged the shipping industry, academics, NGOs and policymakers through a series of seminars on the potential sustainability and availability of biofuels for shipping and what the industry stance on biofuels use should be.
It’s fair to say that there are as many positions on the risks and merits as there are stakeholders. And hence the industry and its value chain members are wary of both having adverse impacts and the reputational damage just association with biofuels use could bring them.
We are beginning to provide answers to the tricky questions
I am finding the process hopeful though. Views and key issues are becoming clearer and a pathway is emerging. At the seminars, we asked participants the question ‘how much of the energy needs of shipping will be provided by biofuels?’ We have found that the range of forecasts in 2030 spans from just a few percent up to 20% and most see its prevalence declining up to 2050 as electricity, hydrogen or ammonia become increasingly viable and available at scale.
Stakeholders’ main sustainability concerns are unsurprisingly around land use change from land crops, as well as biofuels being made from waste and residues from industries including food or timber production. This isn’t a universal split: some believe that countries with high biofuel production like Brazil have the spare capacity to up production from current farmed land sustainably. Notable among the residue concerns is a focus on the by-products from palm oil production, which is viewed as increasing the viability of the palm oil industry and thereby leading to increased tropical deforestation.
Our seminar on availability saw experts present their studies on the potential amount of sustainable biofuels supply. The goal was to explore why there are wide-ranging forecasts, which have created uncertainty for the industry as to whether biofuels are worth pursuing at all. The outcome was a pleasantly surprising consensus between experts that there are around 100 exajoules (EJ) of energy to be made out of a sustainable supply of biomass. The good news for shipping is that their energy demand is currently only 11EJ.
The bad news is that 55EJ of that 100EJ are already in use (for heat, power and road transport) and the remaining 45EJ would meet all the demand from aviation. The third problem is that it is not feasible to make all the 45EJ into liquid fuel as much of it is solid wood. What can be made into fuel oil will only in part be appropriate for shipping. Aviation has ambitions to increase biofuels use but from a tiny base of 0.25% in 2017 to 2.5% in 2020. With aviation having very limited use of biofuels right now, shipping will need this to rise so that biorefineries have the incentive to produce both aviation and shipping grades.
We also learnt that there are more demand sources for biowastes than aviation and shipping, which could take further chunks of this 45EJ. For example, biogas could be used to replace natural gas for heat generation and the use of biomass to produce power coupled with carbon capture and storage may reduce atmospheric carbon more than displacing fossil fuels use in aviation or shipping.
So – unsurprisingly – the picture is partly resolved and partly more complex.
The way forward
It is clear is that until other potential biofuel users go for scale, there is a decent amount of current and future feedstock that is not being used. There is a concern that each of the sectors will wait to see what the other will do – effectively leaving potential carbon savings unrealised. So, with some collaboration between sectors, shipping should be able to make limited (5% to 20%) but rapid use of biofuels in the existing fleet. But with supply likely to constrain demand somewhere in the 2020s, the industry and its investors should be planning for new vessels from 2030 to be running on ammonia, hydrogen or batteries.
Getting from the few pilots there are now will take a collaborative can-do mindset to overcome the challenges. The inquiry has helped to identify the conditions needed for a smooth and rapid decarbonisation:
- Only sustainably produced biofuels are used and certification has a large role to play in this
- Understanding the maximum supply that shipping can expect to have available to it and for how long
- Understanding the potential cost differences to fossil fuels and how carbon pricing might affect this
- Managing the reputational risks of using biofuels with their negative historic impacts
- Working effectively with other potential users and producers to ensure that the potential for sustainable biofuels is realised
- Stimulating and preparing for the readiness of non-biofuel zero-carbon options
The inquiry continues and you have the opportunity to be involved through a high-level event during Climate Week in New York City on 25 September. A report on our findings and recommendations will launch in December. Please be involved.
We will be working out what to add to this list and how to achieve these through the rest of our inquiry. We are keen that this really leads to firm decisions and actions so that shipping doesn’t just turn the tiller but calls “fast ahead” as well.
Will Dawson is Forum for the Future’s Associate Director for Climate and Energy and currently leads the inquiry into the sustainability and availability of biofuels for shipping.