Container ships and other vessels remain the most effective and affordable way to move large volumes of cargo between continents for trade. However, as consumers and businesses begin to consider their carbon footprints more carefully, ocean carriers have found themselves under increasing pressure from customers and regulatory bodies to reduce carbon emissions.

Carriers rely primarily on fossil fuels to haul goods and materials across the ocean and, as a result, ocean shipping is responsible for about 3% of all global greenhouse gas (GHG) emissions. If something doesn’t change, that share could increase to up to 10% of all GHG emissions by 2050. Ocean shipping emissions have increased by 20% in the last 10 years, and they will continue to rise if industry stakeholders don’t take steps to reduce reliance on fossil fuels.

The International Maritime Organization (IMO) is gradually toughening shipping-sector regulations to reduce emissions from international shipping to (or close to) net zero by 2050 (compared to 2008 levels), including on existing ships. Vessels that don’t comply with efficiency and emissions guidance may face penalties and restrictions, which could create bottlenecks in the supply chain.

Supply chain bottlenecks are just one reason that maritime shipping emissions should concern supply chain executives, however. Sustainability counts from end to end — shipping, including ocean carriers, likely plays a significant role in your Scope 3 emissions (the emissions in your value chain that are indirectly generated). Lower emissions from ocean carriers mean lower Scope 3 emissions for you.

One solution generating optimism? Alternative fuels. 

Let’s look at the fuels under consideration for ocean shipping.

Hydrogen

Hydrogen is a widely available, low-cost fuel alternative that can be stored for long periods of time and can support extended travel distances. To harness its power, hydrogen must be loaded into fuel cells, though most existing ships could be retrofitted to use hydrogen cells.

While no major shipping carriers have tested hydrogen yet, it is currently being piloted on some smaller shipping vessels. Though hydrogen has great potential as an alternative fuel and is worth watching, scaling up to larger ships may prove challenging since eco-friendly sources for hydrogen are currently limited.  

Ammonia

The industry is exploring ammonia as an alternative fuel at an increasingly rapid pace. It can be easier to distribute, store and bunker than hydrogen. It also has a higher energy density by volume than hydrogen, which means less storage room is required to generate the same amount of energy. In this respect, ammonia is more competitive than hydrogen as an alternative fuel option. Depending on volume requirements, ammonia can be stored pressurized, semi-refrigerated or fully refrigerated. 

There are two main challenges currently associated with ammonia fuel. First, most of the shipping vessels currently in service can’t use ammonia, so converting to this fuel requires extreme retrofits or new vessels. Second, the extremely toxic nature of ammonia leaks means the industry must be proactive about addressing equipment failures and properly training crews.

While today’s vessels aren’t currently set up for ammonia, more companies are showing interest in ammonia-powered vessels. “Development of low-speed engines is not yet fully complete,” says Hyoung-Seog Kim, CTO of Hanwha Ocean, a leader in green energy shipping solutions. “But we’ve been hearing news lately that major companies in Europe and Japan have signed orders for new ammonia-powered vessels. In addition, the dual-fuel LPG/ammonia carriers that recently saw a boom in new orders are reportedly planning to be converted to ammonia propulsion once the development of an appropriate engine is complete.”

Biofuels

Biofuels, such as biodiesel, ethanol and methanol are liquids made from biomass. Some biofuels, such as biodiesel, can be used without equipment modifications or retrofits, making them immediately available to harness and even mix with fossil fuels. Currently, one of the main concerns about biofuels is their potential for damaging equipment if not properly handled, since mold or other unexpected growth can clog filters and damage equipment.

Methanol is a sulfur-free biofuel alternative well-suited for powering long-distance ocean travel. Because methanol is a liquid, many existing engines and vessels can be reconfigured to run on it. For example, carrier tanks can be cost-effectively retrofitted from conventional fuel oil to methanol fuel. Methanol is simpler and more cost-effective to manufacture and store than other biofuels, which can be costly to produce.

Maersk Line, the world’s second-largest container ship company, pioneered the launch of a methanol-powered container vessel in 2021. Shortly after, other shipping companies, including CMA CGM, Evergreen and HMM, ordered methanol-powered vessels as well.

It’s worth noting that the increase in orders for methanol-powered ships has strained the world’s methanol supply. Given the current production infrastructure, it’s unlikely that the industry could generate enough sustainably produced methanol to keep pace with current ship orders.

A Final Word on Alternative Fuels

The primary challenge for alternative fuels in ocean shipping right now is that none of the above options stand out from the rest. None of the aforementioned options has the existing infrastructure to support a full industry conversion.  To address GHG emissions in ocean shipping, the industry will need to quickly move beyond the current pilot phases for these fuels and dedicate resources to developing the infrastructure and technology required to facilitate the widespread adoption of at least one alternative option.

“Ammonia can be a good compromise in terms of availability and scalability as a hydrogen carrier,” says Kim. “As long as there are strong safeguards against toxicity in case of a leak, it could become more widely adopted. Many vessels are already transporting ammonia, which serves as a good benchmark for us, so we expect that the toxicity issue can be resolved fairly easily as well.”

When considering all factors, Hanwha has elected to invest in the future of ammonia by developing an ammonia-powered gas turbine to help spur the technological innovation the ocean shipping sector needs to push the adoption of alternative fuels. The combustor, which uses a fuel mix of ammonia and natural gas for fuel flexibility, is currently in testing. Though many alternative-fuel engines are currently theoretical, Hanwha expects to have a vessel with this invention on board on the water as soon as 2027. 

Though some ships can run on 100% ammonia or other zero-carbon fuels now, they still can’t reach full net zero because of pilot fuel requirements. Unlike the standard low-speed, two-stroke engines used in many container ships, Hanwha’s new technology doesn’t require oil for pilot fuel. Hanwha sees the elimination of pilot fuel as a key step in the net-zero shipping puzzle and a critical step on the journey to unlocking a carbon-free future for ocean carriers. 

“This area merits continued interest and needs practical solutions generated from the industry side before it’s too late,” says Kim. “While various energy-saving mechanisms are used to extend a ship’s lifespan, bolder measures are needed for a more fundamental approach, and carbon-free or low-carbon fuels could be the way forward.”