The Potential of Zero-Carbon Bunker Fuels in Developing Countries

Abstract

The World Bank team would like to express its great appreciation to Genevieve Connors, Aurelio Menendez, Alexandrina Platonova-Oquab, and Binyam Reja at the World Bank for their managerial guidance and constructive suggestions during the planning, development and finalization of this research. Their willingness to give their time and support so generously was highly valued.The World Bank team would also like to thank Dirk Heine for his catalytical role in the Decarbonizing Maritime Transport program at the World Bank. His personal dedication and genuine passion were instrumental in getting the program started.The World Bank team is particularly grateful to Veronica Gadea and Jeffrey Lawrence at the World Bank for the compelling graphic design, and thanks Marlee Beers and Meghan Castonguay at the World Bank for the professional maps.Funding for this report was provided by the World Bank's Climate Change Group and PROBLUE, an umbrella multi-donor trust fund, administered by the World Bank, that supports the sustainable and integrated development of marine and coastal resources in healthy oceans.i i i ABBREVIATIONSACRONYM DEFINITION ABS American Bureau of Shipping bcf Billion cubic feet BECCS Bioenergy with carbon capture and storage CCC Committee on Climate Change CCS Carbon capture and storage CH 4 Methane CO 2 Carbon dioxide DAC Direct air capture DNV Det Norske Veritas

Optimal fuel supply of green ammonia to decarbonise global shipping

“…Consideration of other constraints such as fuel security may drive investment needs higher. Of this total investment need, half of it would be needed in low and middle income countries, which provides opportunities for foreign investments and green jobs, as previously identified [7]. However, at present, cost of capital is often higher in low and lower middle income countries, which could place a barrier on the flow of finance to construct renewable energy projects, such as green ammonia production [26].…”

“…The shipping industry faces considerable hurdles to achieve the decarbonisation targets set, in particular given long asset lifetimes, the price gap between HFO and green fuel options, a large number of independent stakeholders which will need to coordinate (e.g. engine manufactures, ports, carriers, production facilities, investors) [4][5][6][7]. As such, there is considerable uncertainty in terms of the optimal path to decarbonise the maritime sector relating to the future energy fuel mix and the infrastructure necessary to facilitate this new fuel supply-chain [8][9][10].…”

“…Recently, the international community has converged on green ammonia (ammonia produced using renewable energy only) as a likely candidate in the long-run (i.e. mid to end-century) for long-haul maritime transport [7,9,11], given that (i) it is relatively energy dense (∼3.6 kWh L −1 ) compared to liquid hydrogen (∼2.3 kWh L −1 ) [12], (ii) it is easy to handle, as it is liquid under relatively mild conditions (it boils at −33 • C under atmospheric pressure), (iii) it can be produced in very large volumes (in the order of hundreds of million tonnes/annum) at low costs (between 10 and 100 USD/GJ) [13] and without competing for agricultural land (which is the drawback of biofuels), and (iv) several manufacturers have announced commercialisation of ammonia-fuelled maritime vessels by 2025-2030 [14]. According to a projections by several studies [9,10], green ammonia could constitute 43%-99% of the shipping fuel mix in 2050, which would be equivalent to, or several times more than, the over 180 million tonne of ammonia produced globally at present (mainly for the fertilizer industry) [12].…”

“…This is partly driven by a limited understanding of where green ammonia could be most cost-efficiently produced in the future [13], and how to establish a fuel supply chain (spanning site selection, land transportation, processing, transportation to fuel demand centres) [12]. So far, studies investigating potential production locations of green ammonia for shipping have not adopted a rigorous techno-economic approach [7]. Where fine-scale estimates of site-specific (green) ammonia production have been developed [12,13,15], those spatially explicit production cost estimates often do not include fuel-supply costs and have not yet been extended to an analysis of global fuel supply-chains beyond a small number of routes [16].…”

The use of alternative fuels for maritime decarbonization: Special marine environmental risks and solutions from an international law perspective

“…For instance, in terms of whether LNG can be considered an absolute clean fuel and what emission standard should be set for potential methane slips and contamination, there are many controversies. A report by the World Bank points out that LNG plays only a limited role in maritime decarbonization because of its methane leakage problem; additionally, "over 20-year and 100-year time horizons, methane is respectively 86 times and 36 times more potent a GHG than CO 2 " (Englert et al, 2021). Using ammonia as fuel not only involves toxicity and the danger of an explosion but also may cause air pollution, acid rain, photochemical smog and other environmental problems due to the immaturity of current ammonia combustion-related technology (Valera-Medina et al, 2021).…”