How Central and South America can lead the way on green maritime electrofuels

With the rapidly melting Arctic polar ice habitat, rising sea levels, and increasing number of extreme weather events, the climate crisis is making its way to the top of the news cycle with increasing regularity. As the urgency of the crisis has come into clear focus, it’s vital for every industry to envision its pathway to full decarbonization and embark on this journey as quickly as possible.

For shipping, this pathway is guided by the International Maritime Organization’s 2050 goal of reducing GHG emissions by at least 50% by 2050. In order to restrain warming to within 2 degrees, however, total decarbonization must be achieved in the same time frame. Achieving either the IMO’s goal, or the broader goal of halting climate change, the first zero emission ships must be on the water by 2030.

The task ahead calls for the kind of broad cross-industry approach best represented by the Getting to Zero Coalition, as well as immediate investments in promising fuels such as ammonia or hydrogen and scaling up Zero Emission Vessels. Such an effort is key to make the industry’s “moonshot” ambition a reality. The transition to carbon free shipping will have a profound effect on the maritime fleet, but it will be just as impactful for the ports that can effectively provide the renewable fuels to power the fleet.

As such, a new report by Ricardo Energy & Environment, commissioned by Ocean Conservancy working with partners Instituto Clima e Sociedade and Environmental Defense Fund Europe, evaluates the investment opportunities posed by zero carbon fuel infrastructure at existing ports in South and Central America. The report Zero Carbon for Shipping: Propelling investment in South and Central America with hydrogen-based shipping fuel, identifies significant opportunities for ports throughout the region to transition with the help of a targeted strategy to invest in renewable energy and zero carbon fuel production to create long-term sustainable economies.

The report finds that countries in South and Central America are well positioned to reap the advantages of being first adopters of producing and distributing green electrofuels for the shipping sector. Building on previous analysis of potential infrastructure investment in places such as Morocco and Chile, the report highlights the benefits that ports and states across the world could derive from harnessing their renewable potential for green electrofuel production.

The analysis looks at multiple factors to reach this conclusion, including existing shipping traffic, current port economies, national mandates for increasing renewable energy sources, and the potential for wind, tidal, and solar energy production in the vicinity of existing ports. Through the review of individual port case studies throughout the region, several themes emerged:

• Ports could provide zero-carbon bunkering on busy shipping lanes. With the proximity of numerous shipping lanes, including approaches to the heavily used Panama Canal, the volume of ships moving through the region could provide stable demand at numerous ports. Porto do Pecém, located on the northern coast of Brazil, is a good example as it is located along shipping lanes that include the eastern coast of the USA, the southern tip of Africa, and the eastern coast of South America.
• Adoption could be supported through demand from existing port activity. In addition to providing the option to refuel, ports with predictable and stable traffic would represent optimal places for investment. Puerto Shougang Hierro, Peru, for example, exports iron ore primarily to New Orleans, USA. Such routes, where demand can easily be calculated, would be ideal ground for green electrofuel infrastructure and perhaps even demonstration projects for dedicated zero emission corridors.
• Electrofuels offer a new lease on life for ports reliant on fossil fuel trade. Ports currently reliant of fossil fuel export face an uncertain future and will likely see a decline in demand as we transition to a lower-carbon future. Puerto Bolívar Cerrejón, Colombia, for example, relies heavily on the export of coal from the region. With a high potential for wind and solar renewable facilities, a transition to green electrofuel production could provide a stable future for the port and ameliorate impacts on the local economy, which is also partially dependent on coal mining.
• Collaboration within port clusters would provide economies of scale. Regions with multiple ports would also be ideal for larger scale investments in renewable energy and zero-carbon fuel infrastructure. For instance, the nine ports in Argentina and Uruguay surrounding the mouth of the Rio de la Plata provide diverse opportunities for sources of renewable energy production as well as siting electrofuel production and storage facilities. Furthermore, the diversity of industrial activity and volume of ports could provide stable sources for aggregate demand.
• Electrofuels could support decarbonization in other sectors. Increasing investment in renewable energy and production of green electrofuels near existing ports can not only serve the shipping industry but other carbon intensive industries that are facing their own challenges in transitioning to a low-carbon future. Investing in offshore wind renewable energy infrastructure and electrofuel production near Porto do Pecém, Brazil, for example, could assist the transition to decarbonize the steel and chemicals factories in the neighboring industrial zone.

While there may be no silver bullet to tackling the shipping sector’s contribution to the climate crisis, there are clearly solutions that can be beneficial to both the environment and the local and regional economies. As nations consider their next moves to stimulate economies struggling with the ongoing COVID-19 pandemic, investing in renewable infrastructure to produce green maritime fuels could provide numerous benefits that would ripple well beyond the shipping industry. Through national and regional collaboration, and with careful consideration for individual port circumstances and renewable potential, the region could become the blueprint for the new green maritime future.