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Friday, September 11, 2020 

A new report from the International Energy Agency (IEA), 'Energy Technology Perspectives 2020' looks beyond the IMO 2050 forecasts and targets to consider decarbonisation in 2070, and, crucially, takes a holistic view of all consumers and sources of energy, rather than shipping alone, considering how all energy users are likely to interact and influence each other.

In some ways the report is encouraging - it suggests that biofuels, ammonia and hydrogen are expected to meet more than 80% of shipping’s fuel needs by 2070, but on the other hand it stresses that the maritime industry has a long way to go and will need government support to make the transition to carbon-neutral status.

The IEA report says that international shipping accounted for around 2% of global energy-related CO2 emissions in 2019, nevertheless ambitious and concrete policies are needed to meet the goals set forth by IMO to reach carbon neutrality in the second half of the century. Reducing carbon intensity in the near term, for instance through energy efficiency measures and slow steaming, is a priority. Over the longer term, policies are needed to promote the adoption of low- and zero-carbon fuels and technologies for oceangoing vessels.

IEA says that no single fuel or technology will be able to enable net-zero CO2 emissions. Success depends upon a wide range of fuels and technologies, tailored to individual parts of the sector and to country-specific circumstances. Net-zero CO2 emissions will require a fundamental change in the way we produce and use energy,

If the report's view of the maritime energy transition is followed, by 2070 shipping will consume around 13% of the world’s hydrogen production. Energy efficiency must also make a significant contribution. The industry will need further tightening of efficiency targets and low-carbon fuel standards to close the price gap with fossil fuels and de-risk investment.

The decarbonisation of transport, including shipping, will require long-term planning and government support. Considerable investment in R&D is needed to reduce costs and improve performance of powertrains and fuels, along with measures to develop the required infrastructure. More than 60% of the emissions reductions required from shipping in 2070 will need to come from technologies that may be in development, but are not commercially available today.

The necessary new technologies, the report says, will not become available at scale without further R&D. Indeed, as the report points out: “No technology to replace the main engine of oceangoing vessels is yet commercially available.”

The even faster progress required under the IMO targets to deliver net-zero emissions globally by 2050 would involve CO2 savings around 75% higher, and across the board, about 45% of all emissions savings in 2050 would need to come from technologies that have not yet been commercially deployed, even on a very limited basis.

In the case of shipping, IEA's methodogy builds upon data from UN bodies (IMO and UNCTAD) and commercial sources (Clarkson Research, Bloomberg) to build a vessel fleet-turnover model across five ship types: tankers, container ships, bulk carriers, general cargos and 'other' ships. It considers major current and potential future maritime fuels (high sulphur fuel oils, very low sulphur fuel oils, diesel and biodiesel, LNG and biomethane, ammonia, hydrogen, and electricity) and powertrains (internal combustion engine configurations, fuel cells, battery electric vessels). In this, IEA believes efforts to reduce sulphur emissions and other pollutants could lock-in investments in fossil fuels, thus hampering longer-term decarbonisation efforts. As a short-term measure, IEA suggests adding biofuels to the maritime energy mix.

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