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Ports to become first movers in providing green methanol, ammonia

April 19 ------ The Global Maritime Forum and RMI (founded as the Rocky Mountain Institute), under Mission Innovation’s umbrella, have released a report outlining strategies for ports to become first movers in providing green methanol and ammonia bunkering. As informed, the report provides insights into the sources of green methanol and ammonia that could be available to the shipping industry and how ports can secure supply to meet the International Maritime Organization’s (IMO) target of at least 5% use of zero-emission fuels by 2030. 


Earlier on, as part of its revised GHG strategy, IMO revealed that the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources should represent at least 5%, striving for 10%, of the energy used by international shipping by 2030. As the maritime industry transitions towards decarbonization, there will be significant changes in the sourcing and distribution of marine fuels. 


Coping with the costs of production 

The production cost of green methanol or ammonia makes up the largest share of the delivered cost of the fuel. For e-methanol and ammonia, this is most influenced by the quality of local solar and wind resources (and access to hydrogen production subsidies). Specifically, the report finds that the low cost of transporting green methanol and ammonia, which are produced from green hydrogen, will lead to extensive trade linking low-cost production regions to key ports. 


The data further suggest that the cost of renewable electricity in the area around the ports will be the most significant factor determining their green methanol and ammonia fuel-sourcing strategies. “Federal incentives in the Inflation Reduction Act have made the United States one of the most competitive regions in the world for green fuel production,” said Aparajit Pandey, Principal and Shipping Decarbonization Lead at RMI. “Smaller ports with excellent renewable resources, including ports in the Global South, can build cost-competitive hydrogen production facilities and participate in the global bunker market.” 


Furthermore, policy support for green shipping fuels has the potential to significantly impact a country or region’s position in this burgeoning hydrogen economy. The study also anticipates different supply dynamics for green ammonia and green methanol as production ramps up this decade. Developments in green methanol production suggest the supply of the fuel could be concentrated in major bunkering hubs and at European ports. 


In contrast, the study finds there could be a global green ammonia trade, with long-distance transport of the fuel to key bunkering hubs from projects in low-cost production regions including the United States, South America, Australia, and Sub-Saharan Africa. “While there should be more than enough green ammonia to supply first-mover ports by 2030, competition for the lowest cost volumes may be fierce and reward those able to move early in securing supply,” said Jesse Fahnestock, Director of Decarbonization at the Global Maritime Forum. Europe may be partially self-sufficient, utilizing domestic production, while North America could retain energy hubs in the Gulf Coast region, the port emphasized. 


Four  ‘archetypes’ of ports 

The study identifies four groups or ‘archetypes’ of ports that could emerge in the transition, defined by common opportunities, challenges, and actions required to develop green methanol or ammonia bunkering. Based on the examples of Singapore, Algeciras, Corpus Christi, Seattle and Tacoma, and Rotterdam, the report provides tailored recommendations for how ports in each group can be pioneers in the decarbonization of the industry. The archetype framework is expected to help ports build strategies for implementing green methanol or ammonia bunkering. 


As part of RMI analysis, the archetypes are defined on a scale from high to low for both characteristics. High-demand ports have bunker volumes above 250,000 tons per year of green fuel, while low-cost local production ports have a local green hydrogen production cost of less than $4 per kilogram in 2030. These groups will have similar opportunities, challenges, and priority actions to become green methanol and/or ammonia bunker ports. As such, identifying the archetype that individual ports belong to can provide a useful starting framework for ports’ green methanol and ammonia bunkering strategies, according to the report. 


RMI recently revealed that, together with the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS), the Zero Emission Maritime Buyers Alliance (ZEMBA) and Hapag-Lloyd plans to pilot a Maritime Book and Claim System for tracking and decoupling greenhouse gas emissions from ocean transport services. 



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