How is Global Shipping Trying to Decarbonise?

Context:

Global shipping aims to achieve decarbonisation by 2040–2050. This is both a climate imperative and a strategic opportunity for India to become a green fuel hub.

1. Current and Future Fuels in Shipping

• Present fuels: Very Low Sulphur Fuel Oil (VLSFO), diesel, LNG (methane-based fuel).

• Transition fuels: LNG, due to higher efficiency.

• Green fuels for the future:

  • Green Methanol: Made from green hydrogen and CO₂; emits 10% of CO₂ compared to conventional fuels. Easy to store and use.

  • Green Ammonia: Made from green hydrogen and nitrogen; emits no GHGs, but harder to handle onboard.

  • Biofuels and e-methanol also in use.

2. Production of Green Fuels

• Green hydrogen: Produced via electrolysis of water using renewable energy.

• Green ammonia: Stable and preferred over hydrogen for shipping and fertilizer needs.

• Green methanol: Easier storage and compatible with current engine tech but expensive due to high energy input (10–11 MWh/tonne).

3. Shipping Industry Trends

• Methanol engines gaining traction (360+ ships on order/operational).

• Major companies like Maersk, CMA CGM, and Evergreen investing in methanol ships.

• Price gap remains: Green methanol is ~$1,950/tonne vs. VLSFO at ~$560/tonne (Feb 2025).

4. India’s Decarbonisation Strategy

• Committed to decarbonising domestic shipping.

• Developing green fuel bunkering hubs (e.g., Tuticorin, Kandla).

• Aiming to export green fuels to hubs like Singapore, which accounts for ~25% of global ship fuelling.

5. Enabling India’s Green Fuel Economy

• Challenges: Need for imported solar panels, electrolysers, and high upfront costs.

• Opportunities:

  • Use sovereign guarantees, PLI schemes, and CCUS incentives to attract investment.

  • Build domestic electrolyser manufacturing (target: 1.5 GW capacity).

  • Leverage solar energy growth model (from 2.82 GW in 2014 to 105 GW in 2025).

6. Rebooting Indian Shipbuilding

• Government has pledged $10 billion to purchase 110 ships.

• Aim to make 10–20% of them green fuel-capable, Indian-built, and Indian-flagged.

• Seeking foreign partnerships (e.g., South Korea, Japan) to enhance shipbuilding capacity.

• Retrofitting existing ships and building new ones to support green fuel use.

India stands at a pivotal point to become a global leader in green marine fuels. By leveraging solar capacity, financial innovation, and international cooperation, India can decarbonise shipping, boost exports, and revive its shipbuilding industry.