Prospect 75% E-Fuels Adoption by 2045: Maritime Sector Survey

Posted on Feb 10, 2024 at 10:02 PM

A recent survey of 700 senior maritime executives and technical specialists has revealed that the maritime & shipping Industries are poised for a significant shift towards e-fuels, with an estimated 75% of owners considering adoption by 2045. While e-fuels are pivotal for decarbonising the sector, challenges and regional variations persist.

The analysis, encompassing shipping firms and vessel operators in the Netherlands, Belgium, Germany, and Spain, provides insight into the diverse European cluster representative of the global shipping market. Notably, Dutch ship operators express strong confidence in the potential of e-fuels by 2030, while their German counterparts exhibit more caution.

However, Northern European countries may be better situated to arrive at the aspired goals sooner rather than later.

Regional preferences also emerge, with biofuels favoured as a transitional fuel in the Netherlands and Spain, while Germany and Belgium lean towards LNG. Concerns about e-fuel availability and costs are particularly pronounced among Belgian companies.

Despite the perceived technical complexity, most companies recognise the competitive advantages and are formulating investment plans. Retrofitting existing ships ranks as a top decarbonisation strategy, with e-fuels anticipated to become indispensable by 2045.

The survey underscores the industry's consensus on the significance of zero-carbon e-fuels like green hydrogen, ammonia, and methanol in achieving decarbonisation targets, especially in 2030-2040, when emissions targets are expected to tighten. However, doubts persist about the global fuel supply's ability to meet growing demand, raising concerns about potential shortages or price spikes. We can remember the same issues of availability once low-sulphur fuels were implemented.

High investment costs for transitioning to renewable fuels and transforming port and ship infrastructure are identified as significant obstacles by 76% of respondents. Additionally, global biofuel production limitations, sustainability concerns, and methane leakage issues further complicate the transition.

While green hydrogen and e-fuels offer promising decarbonisation pathways by 2050, their toxicity and safety concerns necessitate the development of new protocols and training.

The importance of globally traded liquid e-fuels becomes evident for longer transoceanic voyages, addressing the energy density challenge inherent in shorter regional marine shipping routes.

Amid these developments, Accelleron, a turbocharger specialist, has acquired Officine Meccaniche Torino (OMT), an Italian manufacturer specialising in high-precision fuel injection equipment for medium and low-speed engines. This acquisition expands Accelleron's capacity to meet the growing demand for marine engines powered by sustainable fuels, addressing the limited global production capacity.

However, Accelleron warns of potential risks if regulations surpass the capabilities of existing ships to transition to new fuels and efficiency standards. Such a scenario could lead to premature mandates and the retirement of serviceable ships, disrupting global shipping capacity and supply chains and necessitating gradual retrofit incentives.

Moreover, changing economics in energy-efficient investments, exemplified by Accelleron's cost-effective turbocharger upgrade, requires a delicate balance between regulatory drivers, fuel prices, and payback periods.

The impending implementation of emissions regulations, such as IMO's CII, has brought substantial financial penalties for ship operators with insufficient ship efficiency, emphasising the urgency of decarbonisation.

Accelleron says there is much more impetus to make a  US$10 million investment in engine down rating yielding a 10% efficiency improvement and a five-year payback period due to regulatory pressures; more minor, independent shipowners may face resource challenges in navigating the transition.

Renewable e-fuels may entail higher costs than fossil fuels, but their environmental benefits are immeasurable. Policymakers are urged to balance economic and ecological considerations while charting realistic transition pathways for the maritime industry.

The survey by Accelleronen, compassing 200 maritime industry executives and technical specialists, reveals that 44% were directly involved in logistics and operations roles, while 35% represented shipping companies and ship operators. Most respondents hailed from medium-sized firms with 250-999 employees, with 60% reporting annual turnovers between €50-500 million and a third holding top management positions.

As the world is meeting this week in Dubai to discuss more sustainable energy resources for our planet in COP28, all eyes will be on the shipping industry to fulfil its promised obligations for a more sustainable maritime future.

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