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How big polluters such as aviation and shipping industries can reduce emissions

Global shipping and aviation – both major polluting industries – are charting a new path for net-zero emissions.

But the stepping up of production of low-carbon fuels, seen as key to decarbonisation efforts in these sectors, remains a big hurdle.

Peak fossil fuel demand is now in sight by the end of the decade, supported by clean energy policies and the rising adoption of electric cars, according to the International Energy Agency.

Aviation and shipping have so far lagged decarbonisation efforts mainly as the requirements of high energy density and long-distance travel make it harder to replace conventional fuels.

In aviation, which accounts for 2 per cent of global carbon dioxide emissions, sustainable aviation fuels (SAFs) are seen as the most significant contributor to helping the sector reach its net-zero goal by 2050. SAF can be produced from renewable feedstocks such as municipal waste, woody biomass, cooking oils and other feedstocks.

SAF offtake agreements between fuel suppliers and airlines surged in contracted volume to 22 billion litres last year from 9 billion litres in 2021, according to IEA.

However, the planned production capacity for the low-carbon fuels will provide only a small fraction of jet fuel demand by 2027, the agency has said.

The cost of producing and manufacturing SAF will be 20 to 40 times more than jet fuel, Mark Martin, the chief executive of aviation consultancy Martin Consulting told The National.

The current oil infrastructure is designed to convert crude oil into refined products such as diesel and petroleum, but the production of SAF would require a “whole new level” of technology, Mr Martin said.

Airline heads gathered at the World Travel & Tourism Council Global Summit in Rwanda last week and expressed frustration over the lack of SAF production as they come under increasing pressure from investors and governments to lower emissions.

“The airlines are willing to play ball if the rest of the world plays ball … if the governments provide incentives to produce sustainable fuel, then we will buy the fuel even though it’s more expensive,” said Samer Majali, chief executive of Royal Jordanian.

There’s some cause for optimism with recent government mandates setting the stage for a massive increase in SAF production.

Earlier this year, the EU reached an agreement to set binding targets for European airlines to increase their use of clean fuels.

By 2025, suppliers are required to guarantee that 2 per cent of the fuel they offer at EU airports consists of clean fuels. This requirement will increase to 6 per cent in 2030, 20 per cent in 2035, and rise to 70 per cent by 2050.

Meanwhile in the US, the world’s largest aviation market, the government aims to collaborate with the aviation industry to produce 3 billion gallons of sustainable fuel every year by the end of the decade. It also plans to have enough to meet 100 per cent of aviation fuel demand by 2050.

The US Inflation Reduction Act, a landmark climate law enacted last year, provides fuel producers with a tax credit of $1.25 per gallon.

“The pathways that are available to us at the moment show us that there is no silver bullet … it is an inescapable reality that as an industry we have to get there,” Tony Douglas, the chief executive of Riyadh Air, said last week.

“[The path to net zero] will come with a cost, and the challenge around the cost will be almost as big an issue as the challenge around enabling the solution.”

Slow sailing
International shipping, responsible for more than 80 per cent of world trade and about 3 per cent of human-made CO2 emissions, has made few inroads into decarbonisation.

Despite ongoing development of battery electric ships for short distances, the adoption of zero-emissions fuels like green hydrogen and ammonia is limited and not expected to reach significant levels before 2030.

“The technology’s there. The [ship] engines are going through final testing, so you can have the dual fuel ships [and] you can have an ammonia engine probably coming in the next couple of years,” Stuart Neil, director of strategy and communications for the International Chamber of Shipping, told The National in an interview last month.

Apart from being a user, the global shipping industry is going to be a transporter of the cleaner fuels, and “unless you start building that thinking and that infrastructure in place, you get a bottleneck”, Mr Neil said.

Complicating shipping’s net-zero push is an ageing world fleet.
By early 2023, the average ship age was 22.2 years. With over half the global fleet exceeding 15 years, they are either too old for retrofitting or too new for scrapping.
Meanwhile, the adoption of alternative fuels is in the early stages, with 98.8 per cent of the fleet still sailing on fossil fuels, according to the United Nations Conference on Trade and Development (Unctad).

However, around 21 per cent of vessels on order will operate on cleaner alternatives like liquefied natural gas, methanol and hybrid technology, Unctad said in its Review of Maritime Transport 2023 in September.

At the same time, imposing cleaner energy standards on the shipping industry could disproportionately affect vulnerable economies.

For instance, Liberia, Panama and the Marshall Islands, who account for a third of global shipping emissions, have a combined gross domestic product of roughly $84 billion. To put that into perspective, India’s financial capital Mumbai had a GDP of about $310 billion last year.

Decarbonising the global fleet by 2050 may cost up to $28 billion annually, with infrastructure for 100 per cent carbon-neutral fuels requiring as much as $90 billion per year, according to Unctad.

In July, the International Maritime Organisation (IMO) tightened decarbonisation goals for the industry and also confirmed the development of new fuel standards and a pricing mechanism for greenhouse emissions.

The adopted document set goals of declines of at least 20 per cent, striving for 30 per cent, by 2030 and “by at least 70 per cent, striving for 80 per cent, by 2040″, compared with the 2008 baseline.
Source: The National News

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