What Will Be the Role of Biofuels in Shipping’s Decarbonization?

shipIllustration. Image Courtesy: Pixabay under CC0 Creative Commons license

Biofuels are not likely to become the prevailing zero-carbon solution of choice in the shipping industry’s decarbonization process in the long-term due to many challenges, according to an inquiry commissioned by the Sustainable Shipping Initiative (SSI).

The report was launched at the 2019 United Nations Climate Change Conference, COP25, in Madrid, on December 11, 2019. Its drafting included desktop literature review, expert stakeholder interviews, face-to-face roundtables,  as well as a high-level panel at Climate Week New York.

Fuels derived from biomass, referred to as biofuels, as the primary energy source may be an attractive option for the shipping sector. Biomass can be used as a feedstock to produce alcohol fuels such as ethanol and methanol, liquefied bio-gas (LBG) or bio-diesel.

Such fuels could be used as drop-in or blends with minor modifications to existing engines, machinery and storage systems, which simplifies the transition from existing fossil-derived fuels. They can, therefore, be considered to be the most ‘technologically ready’ of the various zero-carbon alternatives currently under consideration for deep-sea shipping.

However, there is a lot of controversy surrounding the use of biofuels in various sectors, including shipping. One of the major concerns related to biofuels’ role as the potential zero-carbon fuel of the future is the availability shortage, as there is an understanding that the supply-demand balance is pretty tight to meet shipping’s energy needs.

“There remains no clear consensus on whether there is sufficient sustainable biomass for shipping as well as other sectors. Current understanding suggests that a biomass-based decarbonization pathway for shipping comes with considerable supply risks and as a consequence also poses risks related to their price.

“However, there are scenarios within the working assumption range of 50-100 energy units (EJ) where there would be sufficient supply for shipping. The key assumptions needed to arrive at this, relate to high projections for purpose-grown energy crop use; high recovery of agriculture waste residues; road transport to electrify, and a lower to medium demand from biomaterial,” the report reads.

Furthermore, the majority of stakeholders that participated in the study believe that biofuels could meet 10-30 percent of shipping’s energy needs in 2030 and 2050, with biofuel use likely to be higher in 2030 than 2050, implying this is a short rather than long-term solution.

“Industry stakeholders consulted in this inquiry suggested that in the short-term, biofuels could have a significant role to play to accelerate early decarbonization action. The low end of the supply working assumption of 50EJ could more than meet all of the shipping’s current energy needs, and currently, only 0.25EJ of advanced biofuels are used globally. There is, therefore, a potential window of opportunity for shipping to use sustainable biofuels whilst sustainable bio-feedstocks are underutilized. However, depending on the supply-demand factors, there is uncertainty on the duration of this supply, with some stakeholders suggesting it could last through much of the 2020s,” SSI pointed out.

Irrespective of potential supply-demand constraints, the use of biofuel carries the additional risk of increasing carbon emissions, the inquiry further warns.

“All stakeholders who supported the use of biofuels considered certification to be a prerequisite to ensuring the transparency and sustainability of biofuel supply chains. However, others considered the current use of sustainability certification schemes to be insufficient. One potential option for the introduction of biofuels into the shipping sector is to use bio-feedstocks from waste and residue rather than from purpose-grown energy crops, which our stakeholders deemed a lower sustainability risk. If purpose-grown crops are certified using leading sustainability standards and are sourced within regions with strong land governance, carbon and biodiversity credentials, some stakeholders deemed this to have low sustainability risk while others believed it remained high.”

It has been concluded that shipping cannot solve or manage these risks and uncertainties alone. In order to ensure that a functioning and sustainable bio-economy emerges, coordination and engagement across all interested sectors and the entire shipping value chain including ports, cargo owners, fuel producers, investors, insurers, regulators, etc is essential.

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