Adding to the confusion about the new fuels is the fact that there is a good and a bad version of each of them. The scientific evidence on gray ammonia, gray methanol and palm oil biofuel shows that these fuels, if adopted, are likely to be worse for the planet than the unabated continuation of fossil fuel consumption.
Conversely, green methanol, green ammonia and biofuel produced from real waste and residues could significantly limit the production and consumption of fossil fuels. For this reason, it is crucial that there is clarity about which fuels shipping companies ultimately intend to use.
Höegh Autoliners $HAUTO (+3,65%) is focusing on ammonia, explains CEO Andreas Enger, and is committed to the fuel where the competition is not yet so far ahead. "Ammonia is more scalable and will be cheaper than methanol, clearly," said Enger. "We don't want to take a clear position on green or blue ammonia, but we have no intention of using gray ammonia. Maybe we will use it for testing.
"We would be happy if the mass balance is organized through certificates that allow us to exchange the molecules. We would like to do that. But when it comes to using these containers to scale the consumption of gray ammonia - no, we wouldn't do that.
In a speech a few weeks before the MEPC 83 ruling at the IMO, Enger emphasized that green fuels, which are currently in short supply, could be made available "if there is a regulation that stimulates demand and incentivizes the switch from fossil fuels to green fuels."
"In the beginning, it wasn't about saving the world, it was about the need for new ships to renew the fleet... it was about figuring out what kind of ships you need to build to make them sustainable over an expected 30-year lifespan. The Chinese aren't buying EVs to save the world, they're buying them because they're cheaper. That's why it's so important that people develop the technology to make it possible.
The outcome of MEPC 83 is "absolutely crucial" for this, says Enger. "The decarbonization of shipping will not happen because we build such ships - it will only happen if our customers are incentivized by regulation and market forces. We don't choose the fuel for our ships, our customers do."
After a contentious MEPC meeting that ended with a weak compromise, Enger is likely disappointed with the outcome. "Green energy, solar energy in the right places in the world, is getting to a price level where it is absolutely feasible. But that's not going to happen as long as it's absolutely free to emit carbon," Enger added.