As the maritime industry transitions towards decarbonization, there will be significant changes in the sourcing and distribution of marine fuels. The low cost of transporting green methanol and ammonia will lead to extensive trade linking low-cost production regions to key ports. “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 & Shipping Decarbonization lead, 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.”
Developments in green methanol production suggest supply of the fuel could be concentrated in major bunkering hubs and at European ports. Also, there could be a global green ammonia trade, with long-distance transport of the fuel to 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 who move early in securing supply,” said Jesse Fahnestock, director, Decarbonization, The Global Maritime Forum. With plans for international shipping’s fuel to be zero- or near-zero emission by 2030, ports can play a crucial role in its adoption.
