zero44’s Post

This week: what’s the link between FuelEU and EU ETS? In this post, I address the main differences and share an interesting cost comparison to help you understand its implications. Next week I’ll explain the different options for FuelEU compliance. Follow me and zero44 and make sure you’re well-prepared for #FuelEUMaritime. 🚢

🌊 Exciting times ahead in maritime sustainability! Recent studies indicate that zero-emission fuels like ammonia and methanol could reach cost parity with conventional fuels by 2026. 🚢💚 This progress is supported by increasing government and financial sector backing. Key points: - COP 28 insights: Maritime sector's rapid advancement in decarbonization. - Regulatory frameworks (Inflation Reduction Act, EU's Fit For 55) bolstering the transition. - UMAS report highlights the importance of green shipping corridors and the phased approach in maritime decarbonization. 🔜 Looking forward to a greener maritime industry where zero-emission shipping becomes the norm, not the exception. #MaritimeSustainability #ZeroEmission #GreenShipping #Decarbonization #maritimeindustry

The European Union's Emission Trading System (EU ETS) sets its course in our ocean world, so let's break it down into clear waters. Come 2024, ships weighing 5000 GT or more, carrying cargo or passengers in the EU, need to pay their carbon dues. It's like a carbon bill – a charge for each ton of CO2 released, known as the EUA (emissions allowances). Here's the timeline: 2024: 40% phased in 2025: 70% phased in 2026: 100% The EU ETS comes as a cap-and-trade system. Imagine this: there's a limit on how much pollution we can release (the "cap"), and these allowances can be bought and sold. This cap gets smaller each year, aiming to cut emissions by 55% by 2030. With the ultimate goal to become climate-neutral in 2050. All emissions during trips and stops within the EU/EEA fall under the EU ETS radar. When ships enter or exit the EU/EEA, 50% of their emissions are in the system's grasp. Oh, and container ships stopping in ports just outside the EU/EEA (within 300 nm) must consider 50% of their emissions for the journey to that port. This incentivizes CO2e reduction, helping avoid those hefty carbon bills! We built a model where we can showcase the advantages and costs of Fuel Switches, taking into account the changing components (EU ETS, FuelEU, and HBEs) year after year. This empowers our clients to gain valuable market insights and understand the variables at play. This benefits our clients' businesses while making a positive impact on the planet. Win-Win 🎊 Want to know more? Feel free to reach out to Eva Schyns! Stay tuned – CarbonLeap will be diving deeper into #FuelEU and other maritime sector changes. #co2 #impact #eu #sustainable #shipping #decarbonization #CarbonLeap

World Economic Forum: “Establishing clean value chains in hard-to-abate industries, such as agriculture and shipping, is one way to decarbonize them. Hydrogen is a key element in decarbonization processes, and clean ammonia is a superior hydrogen carrier.” AFC Energy is playing its role in supporting the adoption of clean ammonia in decarbonising hard to abate industries with its leading ammonia cracker technology. Lots of news coming out of COP28 in Dubai on the importance of clean ammonia across the energy value chain! #cleanammonia

Europe to give shipping priority access to greener fuels The European Commission published on Tuesday its proposal for a 2040 climate target laying out the pathway to make the European Union climate neutral by 2050 with shipping shown its green pathway, and a noticeable rapprochement with the industry’s global regulator, the International Maritime Organization (IMO). European shipowners welcomed the commitment of the commission to address “barriers to the deployment of low- and zero-emissions fuels including e-fuels and advanced biofuels” in shipping and to give the sector “priority access to these fuels over sectors that have access to other decarbonisation solutions”. The commission acknowledged that the increased costs of sustainable fuels is a key factor for the competitiveness of shipping and has committed to consider regulatory measures to foster their production. ECSA endorsed the commission’s consideration of differentiated targets for shipping in alignment with the IMO’s greenhouse gas (GHG) strategy, under the three scenarios for the decarbonisation of the European economy. The IMO GHG strategy, which was agreed in July 2023, sets up a target of net zero GHG by 2050, with objectives of at least 70% striving for 80% by 2040. In previous years, the EU, frustrated by slow progress at the IMO, had gone down on its own route for creating green regulations for shipping, something that saw the industry included in the bloc’s emission trading scheme from the start of this year. International Maritime Organization European Commission ECSA Group #ghg #emissions

"More Japanese companies are seeking to export carbon dioxide emissions to Southeast Asian nations and elsewhere for underground storage as a way to tackle climate change, with over a dozen projects in the works, a tally by Kyodo News showed Sunday... Trading house Mitsubishi Corp., major oil distributor Eneos Corp., and two other companies are studying a project to liquefy CO₂ emitted from thermal power plants and oil factories in the Tokyo Bay area and ship it to Malaysia for storage there. About 3 million tons of CO₂ is expected to be collected annually under the project, which the companies aim to start by fiscal 2030. Chubu Electric Power Co., based in Nagoya, central Japan, has also started, along with other companies, a feasibility study on collecting CO₂ from plants and factories at the Port of Nagoya area for storage in Indonesia. Trading firm Sumitomo Corp. has tied up with JFE Steel Corp. and others to conduct a feasibility study to aggregate CO₂ from the Setouchi and Shikoku regions in western Japan and then transport the emissions to Australia for storage. Companies, including Osaka Gas Co., are also considering a project to store CO₂ from domestic industrial plants in the Asia-Pacific region. However, environmental groups have criticized Japan's push for CCS as not being an effective climate change measure, given that the technology enables the continued use of fossil fuels and the emission of greenhouse gases. Friends of the Earth Malaysia has protested to the Japanese government and others over the possible storage of CO₂ in Malaysia... 'It is an unproven technology with high risk, high cost and comes with long-term liability,' the group said in an open letter made public in March(, https://lnkd.in/gU32SiX7). 'Japan must cut the emissions at the source and should not export or dump CO₂ in other countries.' " Japan firms' plans for CO₂ export, storage in Southeast Asia on rise, 𝘒𝘺𝘰𝘥𝘰 𝘕𝘦𝘸𝘴, 8 April 2024, https://lnkd.in/gsauuPa7

Climate Action: As per a report: India's greenhouse emissions rate dropped by a faster-than-expected 33% in 14 years as renewable energy generation rose and forest cover increased. #sdgs #climateaction #carbon #emission Some of the global best practices compiled: 1. European Union Emissions Trading System (EU ETS): The EU ETS is the world's largest carbon trading system and covers various sectors in European Union member states. It operates on a "cap-and-trade" principle, with a gradually declining cap on emissions. Allowances are allocated to participants, and they can trade these allowances within the EU market. 2. California, United States: California has implemented its own cap-and-trade program called the California Cap-and-Trade Program. It covers multiple sectors, including electricity generation, industrial facilities, and transportation. The program sets a cap on emissions and requires participants to hold allowances or use offset credits to comply. 3. South Korea: South Korea launched its national emissions trading scheme in 2015. It covers companies in sectors such as power generation, manufacturing, and buildings. The scheme sets a cap on emissions and allows participants to trade emission permits. 4. New Zealand: New Zealand operates the New Zealand Emissions Trading Scheme (NZ ETS). It covers sectors such as energy, industrial processes, waste, and forestry. The scheme uses a cap-and-trade approach and allows participants to trade units called New Zealand Units (NZUs). 5. China: China has implemented several regional pilot carbons trading schemes, including in Beijing, Shanghai, and Guangdong. These pilot programs have been designed to test different approaches and inform the development of a nationwide carbon market. The national carbon trading scheme in China is expected to become the world's largest. 6. Quebec and Ontario, Canada: Quebec and Ontario provinces in Canada have implemented their own cap-and-trade systems. Participants are required to hold allowances to cover their emissions, and trading of allowances takes place within these regional markets

Ammonia as green fuel? Is it what the maritime industry needs for sustainability? Considered as the "Teslas of the sea," ammonia-fueled marine vessels are becoming the hottest topic in the maritime industry. In the search for feasible fossil-free fuels for marine vessels, ammonia has been on the agenda for quite some time as one of the strongest alternatives. Aiming to meet the International Maritime Organization's (IMO) targets regarding carbon emissions, more newbuildings are leaning towards cleaner fuels to align with these set targets. However, despite having clear advantages in some areas, such as lower emissions due to emitting mainly nitrogen and water vapor, renewable production opportunities, higher energy density (higher than hydrogen), and already existing infrastructures for production, there are some drawbacks related to this transition. Most of these drawbacks that are being discussed revolve around the costs of transition, technological advancements required for the infrastructure to meet the increasing demand, and some other issues regarding feasibility in technical terms. The problem is, in order to produce ammonia, huge amounts of electricity are needed, making it really energy-intensive. So it will all boil down to the method of electricity production to assess the cleanliness of ammonia as a marine fuel and is likely to be overlooked. Another problem, despite ammonia being carbon-free, is that its combustion engines do release greenhouse gases, namely, laughing gas (a very potent greenhouse gas, 200 times more impactful than CO2, according to researcher Selma Brynolf). Therefore, even the strongest pro argument of the transition to ammonia-fueled engines has a shaky base to support. The biggest (by far) drawback is the health-related hazards concerning the handling of ammonia. Exposure to high concentrations of ammonia in the air is dangerous and could lead to burning in the eyes, nose, throat, and respiratory systems. Additionally, it could lead to blindness, lung damage, and death. So this adds another dimension with an ethical perspective into the equation. There was one accident related to ammonia leakage on a marine vessel, where one crew member died and three others were severely injured, on April 6, 2021, in Malaysia. Is ammonia the future of the green maritime industry? Really curious about your thoughts as maritime professionals.

🌍 Last week, I attended the highly informative Go Net Zero Conference in Brussels. Here are my top 5 takeaways from the engaging discussions and panels: 💰 The green energy transition requires investments estimated at 2.5%-7.5% of global GDP annually, which we'll pay for as taxpayers or consumers. 📈 Revenue generated from auctioning EU ETS emissions allowances since 2013 until August 2023 has reached €152 billion. In 2023 alone, it has already reached €35 billion. The European budget for climate actions is rapidly expanding. This suggests increased support for low-emission technologies and projects on the horizon. 🤝 No silver bullet for decarbonization: The journey to decarbonization involves a diverse set of technologies and solutions tailored to specific industries. Promoting a single "best" technology could slow the green transition. 💼 The European bioethanol industry currently produces approximately 4 million tons (MT) of CO2, of which 1 MT are currently captured and utilized. This leaves at least 3 MT of concentrated biogenic CO2 streams available for CCU development, solely from bioethanol production. 3 MT of CO2 could be used to produce approximately 2.1 MT of e-methanol with zero carbon footprint. This is equivalent to the total capacity of all existing e-methanol facilities and projects in Europe. 💡 The benchmark price for third-party CO2 transport and storage in the Netherlands is about €50/t CO2 (excluding carbon capture costs). To put this in perspective, current EU ETS prices are around €85 per ton. As CO2 prices continue to rise, CCS become increasingly economically attractive for various industries. #GoNetZeroEnergy #NetZero #Decarbonization #CCUS #CO2