Global Shipping and Decarbonisation
What is the Goal?
- Target: Decarbonisation of global shipping by 2040–2050.
- Aligns with International Maritime Organization (IMO) goals for net-zero emissions by 2050.
- Aims to replace fossil-based marine fuels like VLSFO, diesel, and LNG with green alternatives.
What Are Green Marine Fuels?
1. Green Hydrogen
- Produced by electrolysis of water using renewable energy.
- Not directly used in shipping due to storage and safety concerns.
2. Green Ammonia
- Made from green hydrogen + nitrogen.
- Emits no carbon when burned.
- Challenges: Toxicity, storage at low temperatures, and engine modification.
3. Green (E-)Methanol
- Made from green hydrogen + captured CO₂ from industrial sources.
- Low-carbon fuel (90% less CO₂ than VLSFO).
- Easier adoption due to liquid state at ambient temperature.
- Can be used with modest engine and storage changes (drop-in fuel).
4. Biofuels
- Derived from organic material.
- Seen as interim solutions, but scale limitations and land-use concerns
Why Is Decarbonising Shipping Difficult?
- High Fuel Costs: Green e-methanol costs ~$1,950/tonne vs VLSFO at ~$560/tonne.
- Technology Lag: Shipping industry is conservative, slow to adopt new tech.
- Infrastructure Gaps: Lack of bunkering (refuelling) infrastructure for green fuels.
- Engine Compatibility: Retrofitting or building green-capable ships requires high capital investment.
- Green Fuel Supply-Demand Gap: Expected demand for green methanol in 2028 is 14 million tonnes, but projected supply is only 11 million tonnes.
India’s Strategy for Green Shipping
Domestic Plans
- Decarbonise coastal shipping using green fuels.
- Develop green bunkering hubs at Tuticorin and Kandla
- Retrofitting & new ship builds with green fuel compatibility.
- Target: At least 10-20% of the 110 ships (under $10 billion plan) to be green fuel capable and Indian-flagged.
Green Ammonia Push
- India’s fertilizer sector relies on LNG imports — green ammonia could substitute.
- India can become a major exporter of green ammonia to Singapore (global refuelling hub).
How Can India Build Green Fuel Hubs?
Strengths
- Solar power capacity (from 2.8 GW in 2014 to 105 GW in 2025).
- Industrial CO₂ sources and planned 1.5 GW electrolyser manufacturing
- Strong experience in solar ecosystem creation via sovereign guarantees and policy assurance.
Challenges
- Import dependency on solar panels and electrolysers.
- High upfront costs for green methanol plants.
- Financing hurdles: Indian loans ~12% interest; global banks offer ~4%.
Policy Recommendations
- Sovereign guarantees for de-risking green fuel investments.
- PLI schemes for electrolyser and green hydrogen production.
- Carbon Capture Utilisation & Storage (CCUS) incentives to improve e-methanol feasibility.
- Leverage multilateral finance for capital access.
Reviving Shipbuilding and Ownership in India
- Encourage foreign partnerships with Japan, South Korea for technology and scale.
- Retrofit existing vessels and build new green-capable ships domestically.
- Strategic incentives to make Indian shipyards competitive.
- Government to support Indian-flagged, green fuel-ready fleet.
