A newly published research piece by ING’s senior sector economists Gerben Hieminga and Rico Luman explores the role of synthetic fuels for the net-zero transition in the shipping industry
The report, Synthetic fuels could be the answer to shipping’s net-zero goals, but don’t count on them yet, weighs the optimism surrounding new fuels with the commercial realities regarding their energy inefficiency and production costs.
While fuels like hydrogen and ammonia can drastically reduce carbon emissions in shipping, there are significant gaps between their potential and the current output they can deliver, according to the report.
In the existing market and current state of technological readiness, these fuels are still more costly than and lose more energy than fossil fuels.
Similarly, authors Mr Hieminga and Mr Luman believe full electrification of maritime shipping is not a feasible strategy, given technological limitations and the likelihood that any transition to electrification ill be gradual.
Given current technical and policy limitations of fossil fuel alternatives, the report’s authors outline three main strategies to reduce emissions in the maritime sector:
Tempering the demand for shipping, which means limiting growth in international trade
(For example, through near shoring and the transition towards a circular economy, which aims to lengthen the lifecycle and durability of consumer goods and to recycle more goods locally.)
Improving the efficiency of current bunker fuels, engines and vessels.
And ultimately, replacing fossil fuels with bio-based and synthetic fuels.