Shipping Giants Urge Caution: Biofuels' Role in Decarbonization

As the maritime industry grapples with ambitious decarbonization targets, shipping giants are sounding the alarm on the potential pitfalls of relying too heavily on biofuels in the clean-up push. In a letter to the International Maritime Organization (IMO), industry leaders, including German shipping giant Hapag-Lloyd and several NGOs, have called for the exclusion of unsustainable biofuels from the list of green alternatives to traditional fossil fuels.

Biofuels, in the form of methane, methanol, or fuel oils, are seen as a convenient way for shipping companies to reduce their carbon emissions due to their ability to be used as a "drop-in" fuel. This means that biofuels can be mixed with similar versions of fossil fuels and used to power existing engines, negating the need for large-scale capital investments required for other decarbonization options.

However, the shipping industry's enthusiasm for biofuels is tempered by concerns about their sustainability and potential environmental impacts. Biofuels derived from crops like palm and soy, for instance, have been linked to deforestation and land-use changes, which can exacerbate climate change and put pressure on food supplies and biodiversity.

DNV's new white paper, "Biofuels in shipping," provides an overview of the role of biofuels in the industry's future energy mix. The study highlights the current availability of biofuels to the maritime industry and forecasts future production potential based on stringent sustainability criteria. According to the paper, global production of advanced biofuels stands at 11 Mtoe per annum in 2023, with a significant number of projects expected to come on-stream between now and 2026, bringing total sustainable biofuel production levels up to 23 Mtoe per annum.

While this represents strong growth, it still falls short of the volume of biofuels that shipping would need in order to make a big impact on decarbonization efforts. Moreover, the white paper stresses the need for several practical considerations before biofuels are adopted by shipowners, such as mapping biofuel options, holding dialogues with engine manufacturers and equipment suppliers, and providing relevant training to seafarers and other personnel.

The IMO has agreed on ambitious targets to get shipping to zero around 2050 but has yet to specify how. National delegates will be in London this week to debate new regulatory measures for decarbonizing the shipping industry. Without key safeguards, the new measures could lead to palm and soy oil skyrocketing as they become the cheapest fuel to comply with lower emission standards, while waste biofuels such as used cooking oil are limited in availability.

The shipping industry must focus on green fuels made from hydrogen, rather than burning crops, which is never the answer. The IMO should exclude crop-based biofuels from regulatory compliance and ensure that they do not benefit from economic incentives directed towards promoting zero and near-zero emission fuels.

In conclusion, while biofuels offer a promising path to decarbonization for the shipping industry, their potential environmental impacts and sustainability concerns cannot be overlooked. The IMO must play a crucial role in regulating and promoting sustainable biofuels, ensuring that they do not exacerbate environmental issues like deforestation and food security. By adopting clear guidelines, capping food-based biofuels, and promoting green e-fuels made from hydrogen, the IMO can help the shipping industry navigate the complex landscape of biofuels and achieve its ambitious decarbonization goals.