5 min read

What parts of our economy do we need to change to fully decarbonise and reach net-zero?

Everyone knows we need to stop burning coal for electricity, and burning oil in cars, but what do we do about the sectors of the economy that don’t have such obvious solutions? What about steel, cement, or chemicals? Shipping, heavy-duty road transport and aviation? Theses sectors have become known as the “hard-to-abate” sectors.

Climate negotiator and podcaster Christiana Figueres doesn’t like calling them that, however. She prefers the term “have-to-abate” sectors, and I agree with her. We do have to abate the emissions from these parts of our economy if we are to reach net-zero, so we may as well stop telling ourselves that its just too hard – it has to be done!

The real question is, how?

In this min-series of blogs, we hope to explain to you the reasons why these sectors emit so much CO2 now, what ideas are out there for how we can decarbonise them, and what progress is being made in that transition.

Find the first blog in this series, on Iron & Steel, here:

https://borrowedearthproject.com/blog/decarbonising-iron-and-steel

Second in our list, Shipping

Humans have been navigating the water on man-made vessels for more than a million years.

From sailing rafts to discover south Asia 47 thousand years ago, to building the first sailing boats 7 thousand years ago, then using them to trade jade and build the first maritime trading network in the Indian Ocean, to discovering the pacific islands with outrigger canoes, through to the Ancient Egyptians and the first known naval battles, to the Viking raid on Lindesfarne, Leif Eriksson crossing the Atlantic, Vasco de Gama, Columbus, The Spanish Armada, the use of naval power by the European empires of Britain, France, Portugal, Spain and others, to the transatlantic slave trade, Trafalgar, Steamboats, Ironclads, the Titanic, diesel power, WWI, WWII, to container vessels, LNG vessels, and the modern day.

Maritime history is human history.

What powers today’s ships?

Depending on who you ask, shipping emits 1.7-3% of the world’s emissions, somewhere between Korea and Japan if it was a country. On par with aviation. The majority of that is through the burning of the fuel powering the ships. Oil based fuels power 99% of global shipping, from ferries and smaller vessels through to the bulk carriers and container ships which make up the bulk of the emissions

Today, ships use a range of fuels - mostly oil-based, but the main one is Heavy Fuel Oil (HFO). It is the tar-like substance left behind when you are done refining crude oil. It is viscous, hard to clean up during a spill, and emits a lot of CO2. Its slightly less sulphurous cousin is Very Low Sulfur Fuel Oil (VLSFO), a similarly dense fuel. Some ships, like Liquid Natural Gas (LNG) carriers, burn that LNG in the engines to power the ship (also emitting CO2)

MV Wakashio oil spill in The Mauritius in 2020

How can the industry reduce emissions quickly?

Ship Less Stuff

A radical idea! Despite demand for shipping continue to grow, if we look at a decarbonised future, there is the potential for a lot of the “stuff” we ship around the world today not needing to be shipped. Oil, LNG, coal, a full 40% of maritime trade is the moving around of fossil fuels. Not to mention the iron ore that might end up being turned into steel closer to mines, a future of reduced shipping may be on the horizon. Until then:

Efficiency

Naval engineers are smart people, and can increase the efficiency of current vessels through designs of the propulsion systems, implementing better fuel management practices, reducing waste heat from engines, and even reducing the drag of the ship by blowing bubbles under water (a really cool process called air lubrication).

Slow Steaming

One big improvement that could be done without any changes to the vessels, is simply slowing down how fast the ships sail. Right now ships steam across oceans, and then spend a long time sitting around outside ports waiting to unload. If they were incentivised to manage their journeys better a 10% reduction in speed would save 27% of the emissions of each trip.

Prepare for the future

None of these improvements will get us to net-zero however.

For that we need to crack the fuel riddle. Ship owners, and the industry more broadly, needs to look to the future, and make early investments decisions on how the ships and ports being built now will be powered.

How will ships be powered in the future?

The experts
I have a sum total of 8 week’s experience in the marine engineering industry. So interested readers may want to defer to the experts for the next level of analysis on this topic. The best I have found in my research for this article are the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping . Their report here provides a really good overview of the options and industry sentiment.

For hundreds of thousands of years, sails and oars powered our ships, until steam, diesel and LNG came along. But now we need to think of alternatives that don’t emit CO2 (burning our current suite of fuels and capturing the CO2 onboard will be very difficult indeed).

The one thing everyone in the maritime industry can agree on, is that no one agrees what the future looks like for maritime fuels. A clear winner has not emerged from a long list of potential candidates.

So what are the main options being floated by the industry itself?

Ammonia

Ammonia, NH3, is a colourless gas. The reason it is touted as a potential future marine fuel is the lack of a carbon atom in its makeup, so there is no potential for the forming of CO2 when it is burned. “E-Ammonia” would be derived from green hydrogen and nitrogen pulled from the air, and “Blue-Ammonia” is similar but with the hydrogen produced through Steam Methane Reforming and carbon capture. The potential economics of scaling up Ammonia production are appealing, and are very tied to the hydrogen generation solutions.

Nations and companies that want use hydrogen in the future, but don’t have good renewable resources, are thinking about shipping hydrogen stored as ammonia (because hydrogen is so light), so following the logic of LNG ships, the thinking is, why couldn’t they run on ammonia as well? Despite recent announcements between Canada and Germany, the economics involved in all the losses in the conversion of electrons - to hydrogen - to ammonia - back to hydrogen - to power make some, like analyst Michael Liebriech, think that “it is not going to happen in more than homeopathic quantities”.

But the big problem is the gas itself, it is highly toxic. An engine room running on ammonia would really need to be a very well controlled lab. Leaks would be very dangerous, fixing them very hazardous. Controlling the handling of such a chemical at sea, with its own potential for accidents and poor weather, make some commentators, like chemical engineer Paul Martin, believe it should not even be considered.

It remains to be seen who will be right, and how quickly that will be proven out. When I put my engineer hat on and look at this problem, I remain unconvinced that making ship engines “safe” for ammonia will come at anything less than an exorbitant cost.

Maybe we could do it, but would it be worth the risk and the cost? And are there better options?

Methanol

CH₃OH, Methanol is a light,colourless, volatile, toxic alcohol (though not as toxic as ammonia). It can come from two main sources, Biomethanol is derived from biomass, and e-methanol derived from green hydrogen and captured CO2. Either type of methanol would be a low-emission fuel, and could be handled without major changes to engines by a lot of ships today. Being a liquid at room temperature, methanol is easier to store and use in a marine engine setting.

The drawbacks for methanol come from the “feedstocks” - or the component parts that need to come together to make the fuel in the first place. Biomethanol requires biomass feedstocks, which are currently diverted to food for humans and animals. Despite being a more mature fuel, that also means a lot of the costs have already been driven out of the process of making it, and its still more expensive than what we use now.

E-methanol requires both green hydrogen (clean electricity + electrolysers) and CO2 captured from the atmosphere. The CO2 has to be from the air if it is to be truly green, if you use CO2 captured from a coal plant for example, you’re just delaying the same emissions reaching the atmosphere that would have got there anyway. Because it needs both inputs, e-methanol will always be more expensive than e-ammonia.

Methanol has promise, but some of the intrinsic elements of how it is made look like they may stay expensive for a long time.

Batteries

Believe it or not the first electric boat was invented in 1838 and demonstrated to Tsar Nicholas I on the Neva river.

Today, batteries are one of the real success stories of the energy transition. Despite the obvious challenge of their weight, shorter journeys, like channel hopping ferries, seem well within reach. Norway & Siemens Energy are leading the way already.

The energy density of today’s batteries make transatlantic or transpacific crossings of container ships or large bulk carriers difficult to justify economically - too much of the ship would need to be taken up with batteries to make the journey worthwhile. This might be an area to watch, however, as battery technology continues to progress and improve dramatically.

Biodiesel

Biofuels in general have fallen out of favour as a solution to climate change. This is partly because they remain more expensive than fossil fuels (and will continue to do so until fossil fuels have a carbon price attached), and there are environmental concerns with the land needed to grow them, and the effect on food prices of the displacement of agricultural land. Yet Biodiesel would be a “drop in” replacement for current fuels with substantial emissions reductions. The feedstocks are in high demand, but if quick emissions reductions are required while we wait for the maturity of other options, perhaps more attention needs to be paid to whether we can make biodiesel in a sustainable way.

Liquid Natural Gas

Standard LNG (almost all methane - CH4) is used today as a fuel on some ships, and has lower emissions than HFO, but when you consider the potential for methane emissions up-stream of the ship itself its still a heavily emitting fuel choice. Biomethane/Bio-LNG is derived from biological feedstocks, and faces the same supply issues as biodiesel. E-methane/e-LNG is derived from green hydrogen and captured CO2 and faces the same sort of supply costs as e-methanol, with the added risk of methane emissions leaking through a process called methane slip.

What is happening in the industry?

Since shipping, like aviation, is outside individual countries’ controls due to its international nature, it has somewhat slipped under the radar of climate negotiations like the Paris Agreement. But as analysis shows shipping taking up a higher share of emissions in the future, scrutiny is finally turning to how the industry will clean up its act and after a slow start, it seems that it is beginning to take decarbonisation more seriously.

The organisation responsible for overseeing the files governing shipping is The International Maritime Organisation (IMO). They can regulate fuels, for example, in 2020, the IMO introduced stringent rules on sulphur content in fuels to one seventh of the previously allowed amount. After only getting round to agreeing their initial strategy in 2018, they adopted a more substantial strategy in 2023. The main points are below:

.1 carbon intensity of the ship to decline through further improvement of the energy efficiency for new ships

.2 carbon intensity of international shipping to decline

to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, compared to 2008;

.3 uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to increase

uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to represent at least 5% striving for 10% of the energy used by international shipping by 2030; and

.4 GHG emissions from international shipping to reach net zero

to peak GHG emissions from international shipping as soon as possible and to reach net-zero GHG emissions by or around, i.e. close to, 2050, taking into account different national circumstances, whilst pursuing efforts towards phasing them out as called for in the Vision consistent with the long-term temperature goal set out in Article 2 of the Paris Agreement.

Within the industry itself a few companies stand out as taking proactive “first-mover” status. Ocean Network Express ordered 12 giant methanol dual-fueled ships in the first few months of 2024, while Fujian Guohang Ocean Shipping ordered 10. While Maersk seemed to be a leader in this area in recent years, and helps run the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, this year it seems to be hedging its bets and looking more at ships that can run on Methanol and LNG.

The winning fuel of the future still seems to be undecided, and we may end up with a big mix of fuels. To fully decarbonize the sector, not only do the ships have to be powered differently, but ports have to have the infrastructure to bunker the new fuels, and we likely have to ship less stuff (which will hopefully happen as we use less fossil fuels in the future).

It’s a fascinating time for the marine industry and how they respond to the energy transition will have a huge impact on whether we can meet our decarbonisation goals.

Decarbonising the have-to-abate sectors. Pt 2: Shipping

What parts of our economy do we need to change to fully decarbonise and reach net-zero?