Pioneering green shipping corridors in Asia

ABS managing principal Ilias Soultanias noted the green shipping corridor concept originated from the Clydebank Declaration (COP 26), which signatories are progressing at different stages.

In the US, the Department of State has established a framework for a green shipping corridor focusing on emissions reduction. However, various proposed corridors may prioritise different elements of decarbonisation.

Some green corridors may be fuel and technology-agnostic, while others may be influenced by existing or potential fuel and bunkering infrastructure, or green corridors may highlight specific technology demonstrations for future pilot projects. This leads to confusion regarding the definition of a green corridor.

Mr Soultanias said a green corridor denotes the geographical connection between two locations and the enabling environment that aids in emissions reduction. Apart from its physical attributes, a corridor can also foster a new business case, with policies supporting low or zero-carbon emissions.

“It’s important not to randomly declare and develop a green shipping corridor based on existing maritime routes. Instead, we need to establish a framework to filter and rate the potential of a maritime route before transforming it into a green corridor,” he said.

This involves setting commonly accepted standards within a consortium, where all members agree to operate according to these emissions’ reduction standards.

HAMR energy director – project development David Stribley gave the view of green corridors from the perspective of a green fuels development company. HAMR is focusing on project origination, development and execution of low-carbon fuels and chemicals projects, with a 200,000-tonne per annum green bio e-methanol development flagship project in Portland, Western Victoria, Australia.

Mr Stribley noted the key elements for successful implementation of green shipping corridors. The first is a consumer who is willing to buy decarbonised transport products. “Without that, there is no push for green corridors,” he said.

That consumer is the cargo owner, who will engage its logistics supplier – the shipping lines – to play a direct role in interacting with customers and operating vessels. Then there is infrastructure, such as ports, which is critical for new fuel implementation, leveraging existing infrastructure where possible. Distribution and storage of future fuels also need careful consideration.

HAMR and other fuel generators play an important role in providing the fuel, but an unavoidable issue is that all the elements above have their own timelines.

“The timeframe required to create a new fuel plant can take a lot longer than buying vessels that can operate on that fuel,” said Mr Stribley.

It is a complex puzzle that needs champions in the different sectors and prominent partners.

In a new project in the Port of Melbourne, Australia, there are familiar names in the mix, including Stolthaven Terminals, Svitzer, CMA CGM and Maersk, to name a few. The next stage is to establish a counterparty project in another port to complete the green corridor, and that is now underway.

Oceania Marine Energy (Oceania) Australia managing director Nick Bentley led a discussion on establishing a green corridor between Australia and Asia. Iron ore is one of than products shipped on that route, 800M tonnes between Western Australia and Asia, generating 22.5M tonnes of CO2 annually. While many mining companies have committed to net-zero emissions by 2050, they lack a decarbonisation plan for their shipping fleets. Oceania, as a marine energy company, is helping address this issue by providing green ammonia-fuelled bunkering vessels that deliver low-carbon marine fuel to the shipping fleets.

“Australia is a lucky country,” he said, “We have vast renewable energy resources. In the Pilbara alone, there is over 40 GW of renewable energy generation capacity under development.”

This will result in 15 GW of electrolyser capacity. “That is enough to generate 8.5M tonnes of green ammonia,” he said, “A carbon-free marine fuel sufficient to power 3,000 shipments of iron ore up to Asia.”

This is the basis of the West Australia green corridor, vast quantities of green fuel, committed cargoes on established routes, cargo owners looking for low-emissions transport and deepwater ports.

“Yet there is a piece missing and that is the bunkering infrastructure itself in the Pilbara. At the moment there is no bunkering infrastructure that supports low-carbon marine fuel, and that is where oceanic green energy comes in,” he said. “We are committed to delivering more than 1M tonnes of low-carbon marine fuel by 2030 and Oceania’s bunkering vessels will be carbon free.”

The Oceania bunkering vessel is a collaboration between Scandinavia companies Kanfer, Wärtsilä and CGR Arctic Marine.

“We are taking this design through approval in principle with DNV this year and are looking at deployment in 2028,” said Mr Bentley.

Key takeaways

Ilias Soultanias (ABS): “Throughout our study of the subject of green shipping corridors, it has been clear that for any such initiatives to progress, there is a need for a broad buy-in from stakeholders in shipping, the supply chain and the value chain.”

David Stribley (HAMR Energy): Mr Stribley noted there is no reason why alternative fuels cannot be deployed – even hydrogen. These will be mitigated by stringent regulations, but shipping has overcome these before, he noted.

“But it really comes down to the commerciality of the fuels,” he said. He said the route was likely to be using very low sulphur fuel oil and paying a carbon tax, until the pricing swings in favour of ammonia.

Nick Bentley (Oceania): Mr Bentley agreed with the other two experts and added the role of fuel supply in the past was not a major feature, but with green corridor projects, the supply of fuel is a vital element and brings in a new level of collaboration. “We will need a lot of trust among different companies that may not have worked together,” he said.

Webinar poll results

How important is the establishment of green shipping corridors in maritime decarbonisation?

Essential: 46%

Important: 39%

Desirable: 11%

Low priority: 4%

Which factor is most important in the successful establishment of green shipping corridors?

Promoting the development of alternative fuel supply: 26%

Sustainable shipping infrastructure: 38%

Technology development: 13%

Customer demand: 10%

Government-to-government relationships and policies: 13%

Which green corridor has most potential for success?

Singapore–Rotterdam: 49%

Japan–Western Australia: 31%

China–South America: 11%

South East Asia–US West Coast: 9%

Who is most critical to drive the transition to clean marine fuels?

Regulators: 53%

Shipping companies: 35%

End users/cargo owner: 12%

Will the safety aspects of ammonia be satisfactorily met to deploy as a marine fuel?

Yes: 40%

No: 12%

Maybe: 48%

What percentage of shipping will use ammonia as a marine fuel in 2040?

0-25%: 56%

25-50%: 32%

50-75%: 12%

75%-100%: 0%

Source: Riviera Maritime Media