Trafigura sees potential for H2 derivatives in shipping

Green hydrogen derivatives offer a more viable alternative to conventional bunkers than biofuels, trading firm Trafigura said in a white paper published today.

The company said it has shifted its focus away from biofuels as alternative marine fuels because production cannot be scaled to meet the demands of the shipping industry. It sees more potential in marine fuels derived from green hydrogen such as methanol and ammonia.

The shipping industry, which represents 3pc of global greenhouse gas (GHG) emissions, will require a variety of alternative marine fuels to exceed current GHG emissions reduction targets by 2050, the firm said. It suggests the global south could be the primary producer of these fuels due to its access to renewable energy resources.

Combustion engines that run on ammonia are not yet available, and commissioning new vessels requires significant investment, in terms of time and capital - they take 3-5 years to build and have a lifespan of 20-30 years. There are also safety risks associated with ammonia, which is toxic, as well as concerns around the future availability of low-emissions fuels.

But Trafigura thinks these problems could be overcome by the International Maritime Organisation (IMO) setting decarbonisation targets for the industry to encourage new technological developments. The company reiterated its calls on the IMO to impose a carbon levy to incentivise the use of e-fuels, which are four times the price of very low-sulphur fuel oil in Europe, according to the white paper's findings. It pointed to 50 countries that already have a carbon levy, such as Japan, as examples to follow.

By Anya Fielding