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Oxford Business Group

Oxford Business Group

Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic intelligence on the markets of the Middle East, Africa, Asia…

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Emerging Tech Could Create A Greener Global Shipping Industry

  • Shipping companies are experimenting with methanol, ammonia and wind.
  • Accelerated emissions reductions needed to meet shipping’s net-zero goals.
  • Developing hydrogen export capacity key to the uptake of green maritime fuels.
  • Indonesia, Mexico and South Africa hold potential for green fuel bunkering.
Emerging Tech

With fossil fuels still powering roughly 99% of global shipping, the sector is seeking to reduce emissions through cleaner fuel sources – including methanol, ammonia and wind – that could soon see increased use.

Last month Breakthrough Energy Ventures, a coalition of private investors founded by US tech entrepreneur Bill Gates, helped Danish start-up Blue World Technologies raise $37m to scale up production of a technological system that extracts hydrogen from methanol and runs it through a fuel cell, generating fuel savings of up to 30% compared to a combustion engine.

International shipping majors have been taking similar steps in recent years. Danish shipping-giant AP Moller-Maersk has committed $2.1bn to develop methanol-powered ships by 2024 to reduce its emissions by 4% and could purchase Blue World’s methanol system for future orders. Chinese shipping giants COSCO Shipping and China Merchants Group, meanwhile, are also looking to methanol as an alternative fuel source.

In 2018 the UN International Maritime Organisation set a 2050 goal of reducing global greenhouse gas emissions in the shipping sector by 50% relative to the 2008 baseline. To meet this goal, the organisation instituted new regulations in 2020 limiting the maximum sulphur content in marine fuel to 0.5%, down from the previous limit of 3.5%.

However, emissions from shipping continue to account for roughly 3% of the global total, and the sector’s current trajectory may not be sufficient to reach its net-zero goal for 2050, according to the International Energy Agency.  

“Current short-term measures are not nearly ambitious enough to put shipping on the net-zero pathway,” the agency noted in a tracking report on the shipping industry in November 2021. “Medium- and long-term measures must therefore be implemented promptly. Such measures should establish a stable, long-term regulatory framework thasteers ship owners, operators, financers and fuel suppliers towards investing in the rapid development and uptake of technologies that are necessary to achieve net-zero alignment, but that are still at the demonstration/prototype stage.”

Shifting to cleaner fuels – rather than focusing on reducing emissions from current fossil fuel-based systems – is therefore seen as imperative, lending greater importance to innovations such as that of Blue World Technology. This is especially true for ships of 5000 gross tonnage or higher, which account for 85% of net greenhouse gas emissions in the sector.

Embracing new fuels and other decarbonisation technologies such as carbon capture and sequestration can also offer synergies. For instance, captured carbon can be used in generating renewable methanol.

Alternative marine fuels

Like methanol, ammonia produced from hydrogen or clean energy sources using electrolysers carries considerable promise as an alternative fuel that could help ships reduce emissions. In addition to ammonia’s high energy density, many countries already have transport and storage infrastructure in place, which could facilitate rapid adoption.

Ammonia is still in the early stages of technological development for application in ships, but investment is gathering pace. In August the American Bureau of Shipping granted early-stage approval for ammonia-powered ships and infrastructure, including a design from global shipbuilding giant Samsung Heavy Industries.

Early this year US-based Amogy raised $50m to use ammonia in fuel cells, which could generate even more significant reductions in emissions.

Clean hydrogen, often used to produce ammonia and methanol, also has potential, even if current technology only allows it to be used for smaller vessels such as ferries and passenger boats. Storage limitations for bunkering and the need to refit existing ships entirely makes hydrogen an unlikely mass fuel source in the near to medium term.

Nevertheless, if trade in hydrogen expands globally, with regions like Latin America aiming to become large-scale hydrogen exporters, it could play a key role in meeting 2050 net-zero targets.

Just as coal became dominant in shipping in the 19th century and oil in the 20th century thanks to plentiful supply, a significant increase in the availability of hydrogen or its by-products − like ammonia or methanol – will likely be needed to position it as a viable green fuel for the global shipping industry.

Ample supply of liquefied natural gas (LNG), for instance, has already helped gas make significant inroads in shipping as an auxiliary fuel to traditional diesel bunker fuels because ships can easily refuel at bunkering facilities around the world.

Although fossil fuel-based, LNG is classified as a transitional fuel by the EU, and ships that burn LNG reportedly emit 99% less diesel particulate matter and sulphur oxide than those running on traditional fuels, as well as an estimated 25% reduction in carbon dioxide.

In September 2022 the Port of Long Beach in California refuelled a container ship with LNG for the first time in the port’s history.

Lastly, in a trend that harkens back to the pre-fossil fuel era, some shipping companies are looking at harnessing wind power. Large sails positioned on cargo ships can enhance propulsion by 5-20% when used alongside other fuel sources, according to the International Windship Association.

Related: The Unintended Consequences Of The EU Energy Emergency Plan

Some two dozen ships will be using some form of wind power by the end of 2022. For example, US agricultural giant Cargill, which has a chartered fleet of around 600 vessels, is incorporating a design that includes 37.5-metre sails on a Mitsubishi-owned ship, with plans to test the vessel in 2023.

Emerging markets as green fuel centres

Emerging markets have an important role to play in accelerating the clean fuel transition in the shipping sector.

Holding the presidency of the G20 this year and set to hold the presidency of the Association of South-East Asian Nations next year, Indonesia is uniquely positioned to shape the transition to greener fuels in global shipping, among other areas.


Singapore has traditionally been a leader in bunkering fossil fuels for ships, but Indonesia has more than 17,000 islands on which it can strategically build green fuel bunkering centres for ammonia and hydrogen, according to a report published in August by the P4G-Getting to Zero Coalition Partnership.

The report estimates that the development of scalable zero-emission fuel infrastructure in the country could generate a total investment of between $3.2bn and $4.5bn by 2030.

With the availability of domestically generated clean sources of hydrogen and ammonia key to realising such visions, Indonesia has both climatic and economic incentives to leverage its position to accelerate the energy transition.

South Africa is similarly looking to build a green fuel corridor along its coastline and has proposed port projects in Boegoebaai, Saldanha Bay and Durban-Richards Bay to export green hydrogen, which would position these ports to bunker green fuel.

Elsewhere, Baja California and Manzanillo on Mexico’s Pacific coast are also being discussed in this light, as the country could channel ample solar and wind power into green fuel centres for the global shipping industry.

By Oxford Business Group

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