The international shipping and aviation industries have set ambitious net-zero targets for 2050, demonstrating their commitment to decarbonization. The International Maritime Organization (IMO) recently introduced measures to address this challenge, but tangible progress has been limited.
The focus on decarbonizing shipping took center stage during London International Shipping Week and continues at the European Shipping Summit. While the industry has identified essential steps, such as enhancing efficiency, adopting technologies like wind propulsion, and electrifying shorter journeys, the path to true sustainability demands alternative fuels to replace fossil fuels.
Unfortunately, both sectors face a critical shortage of regulations to drive this transition, and the European Union (EU) is currently lagging behind the necessary pace in alternative fuel production.
The Role of Green Hydrogen
Hydrogen plays a pivotal role in facilitating the shift away from fossil fuels. Whether used directly as a fuel or in the production of alternative fuels like e-ammonia, e-methanol, or synthetic kerosene, hydrogen is essential for achieving truly sustainable fuels in shipping and aviation.
However, there are substantial challenges in scaling up hydrogen production. As of the end of 2021, only four percent of global hydrogen production was “green,” the lowest emission form produced via electrolysis. Moreover, hydrogen is being considered as a solution for decarbonizing multiple sectors, including home heating and road transport, which can lead to inefficiencies in production.
The Need for Targeted Regulation
The situation underscores the need for regulations that not only increase the supply of green hydrogen but also ensure its allocation to sectors where it is most crucial for decarbonization, such as maritime and aviation.
In the EU, regulations like FuelEU Maritime and ReFuel EU Aviation address the use of these fuels but require further refinement to incentivize hydrogen-derived fuels with the greatest emission reduction potential. Current regulations often promote fuels that merely produce lower emissions than existing fossil fuels.
For instance, ReFuelEU Aviation mandates that 70 percent of aviation fuels be “sustainable aviation fuels” by 2050 but only requires 35 percent to be synthetic fuels (like e-kerosene or those made from green hydrogen) by the same year. Similarly, FuelEU Maritime, while setting targets for reducing greenhouse gas intensity, does not go far enough to meet IMO targets.
This results in regulations permitting the use of fuels that are not genuinely sustainable, such as biofuels for aviation and liquid natural gas (LNG) for shipping, which fall short of achieving emission reduction targets.
Closing the Green Hydrogen Gap
To close the green hydrogen gap, regulations must be strengthened to create substantial demand for hydrogen-derived fuels in shipping and aviation, surpassing the demand for alternative “sustainable” fuels. Regulation should also prioritize the allocation of green hydrogen supplies to sectors lacking more efficient decarbonization routes.
Furthermore, the EU must explore avenues to compete with the United States in leading the production of these fuels, as the US makes strides under the Inflation Reduction Act (IRA) to produce and use hydrogen-derived aviation fuels.
While 2050 may seem distant, a swift transition away from fossil fuels in shipping and aviation requires immediate action. Failure to act now may result in missed opportunities to propel the industry toward a more sustainable future.