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Publication(World Bank, Washington, DC, 2021-04-15) Englert, Dominik ; Losos, Andrew ; Raucci, Carlo ; Smith, TristanTo meet the climate targets set forth in the International Maritime Organization’s Initial GHG Strategy, the maritime transport sector needs to abandon the use of fossil-based bunker fuels and turn toward zero-carbon alternatives which emit zero or at most very low greenhouse gas (GHG) emissions throughout their lifecycles. This report, “The Potential of Zero-Carbon Bunker Fuels in Developing Countries”, examines a range of zero-carbon bunker fuel options that are considered to be major contributors to shipping’s decarbonized future: biofuels, hydrogen and ammonia, and synthetic carbon-based fuels. The comparison shows that green ammonia and green hydrogen strike the most advantageous balance of favorable features due to their lifecycle GHG emissions, broader environmental factors, scalability, economics, and technical and safety implications. Furthermore, the report finds that many countries, including developing countries, are very well positioned to become future suppliers of zero-carbon bunker fuels—namely ammonia and hydrogen. By embracing their potential, these countries would be able to tap into an estimated $1+ trillion future fuel market while modernizing their own domestic energy and industrial infrastructure. However, strategic policy interventions are needed to unlock these potentials.
Publication(World Bank, Washington, DC, 2021-04-15) Englert, Dominik ; Losos, AndrewAs the backbone of global trade, international maritime transport connects the world and facilitates economic growth and development, especially in developing countries. However, producing around three percent of global greenhouse gas (GHG) emissions and emitting around 15 percent of some of the world’s major air pollutants, shipping is a major contributor to climate change and air pollution. To mitigate its negative environmental impact, shipping needs to abandon fossil-based bunker fuels and turn to zero-carbon alternatives. This report, the “Summary for Policymakers and Industry,” summarizes recent World Bank research on decarbonizing the maritime sector. The analysis identifies green ammonia and hydrogen as the most promising zero-carbon bunker fuels within the maritime industry at present. These fuels strike the most advantageous balance of favorable features relating to their lifecycle GHG emissions, broader environmental factors, scalability, economics, and technical and safety implications. The analysis also identifies that LNG will likely only play a limited role in shipping’s energy transition due to concerns over methane slip and stranded assets. Crucially, the research reveals that decarbonizing maritime transport offers unique business and development opportunities for developing countries. Developing countries with large renewable energy resources could take advantage of the new and emerging future zero-carbon bunker fuel market, estimated at over $1 trillion, to establish new export markets while also modernizing their own domestic energy and industrial infrastructure. However, strategic policy interventions are needed to hasten the sector’s energy transition.
Publication(World Bank, Washington, DC, 2021-04-15) Englert, Dominik ; Losos, Andrew ; Raucci, Carlo ; Smith, TristanDue to its much lower air pollution and potential greenhouse gas (GHG) emissions benefits, liquefied natural gas (LNG) is frequently discussed as a fuel pathway towards greener maritime transport. While LNG’s air quality improvements are undeniable, there is debate within the sector as to what extent LNG may be able to contribute to decarbonizing shipping. This report, “The Role of LNG in the Transition Toward Low- and Zero-Carbon Shipping,” considers the potential of LNG to play either a transitional role, in which existing LNG infrastructure and vessels could continue to be used with compatible zero-carbon bunker fuels after 2030, or a temporary one, in which LNG would be rapidly supplanted by zero-carbon alternatives from 2030. Over concerns about methane leakage, which could diminish or even offset any GHG benefits associated with LNG, and additional capital expenditures, the risk of stranded assets as well as a technology lock-in, the report concludes that LNG is unlikely to play a significant role in decarbonizing maritime transport. Instead, the research finds that LNG is likely to only be used in niche shipping applications or in its non-liquefied form as a feedstock to kickstart the production of zero-carbon bunker fuels when used in conjunction with carbon capture and storage technology. The research further suggests that new public policy in support of LNG as a bunker fuel should be avoided, existing policy support should be reconsidered, and methane emissions should be regulated.