Global Maritime Decarbonisation: New Opportunities for Latin America
May 26 2023
Latin America finds itself facing several untapped opportunities connected to the global maritime ecosystem’s transition to scalable zero emission fuels.
Currently, international shipping is highly reliant on fossil fuels as an industry, in particular heavy fuel oil (HFO), burning around 300m metric tons per year and emitting around 1bn metric tons of CO2 in the process. This means that emissions from international shipping account for 2-3% of global emissions annually, a total which is projected to grow overall and increase relative to other parts of the economy which will be able to electrify and curtail emissions at a faster pace.
In order to meet the goals of the Paris Agreement it is imperative that the maritime ecosystem is able to reach zero emissions before 2050. This means that there is a need for a full-scale transition to scalable zero emission technologies over the coming decades, creating huge shifts in terms of fuel supply and creating new opportunities for several geographies.
For illustrative purposes, assuming the maritime ecosystem transitions entirely from HFO to green ammonia, this would represent over 900 million tons per year of green ammonia, which is more than five times today’s total global output of conventional ammonia. This reflects the emergence of a new trillion dollar market opportunity, with countries that are able to produce green hydrogen, the basis for all scalable zero emission fuels, at the lowest cost having a massive potential to supply the fuels needed to ultimately decarbonise the international maritime value chain.
Consequently, maritime decarbonisation presents a wide range of opportunities connected to supplying these fuels domestically, exporting these to areas of the world with less renewable potential and ultimately leveraging international maritime decarbonisation to accelerate the transition to renewable forms of energy regionally.
- Latin America has some of the most ideally suited areas for producing green fuels competitively and at scale, given the abundance of renewable energy resources like solar and wind.
- Many countries in the region have high climate ambitions to tap into these resources to power their national electricity grids and switch to cleaner forms of energy.
- There are very few projects in Latin America engaging on the development of green fuels or focusing on shipping’s decarbonization. Further efforts will be needed to ensure that the region maintains pace with global developments.
- With coordinated political efforts, Latin American countries could become leaders in green fuel production and export, benefiting from investment opportunities for this new market.
A newly established Getting to Zero Coalition’s Task Force hopes to address important concerns as well as explore and promote potential opportunities for countries within the Latin American region. By bringing together stakeholders from across the maritime value chain with a significant presence in Latin America, it is the hope that this Task Force can help build connections between the global transition to scalable zero emission marine fuels and the extensive opportunities that Latin America possesses.
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