Amazon, IKEA join other ocean cargo shippers to boost demand for new green fuels (updated)

Evergreen Marine Taiwan

13/11/2024 18:04

(Adds role of Aspen Institute in paragraph 7, details on
expected global maritime regulations in paragraphs 11-13)
    By Lisa Baertlein
       Nov 13 (Reuters) - Amazon.com and IKEA, in alliance with
about three dozen other companies that depend on ocean freight,
will invite shipping firms for the first time to bid on a
contract in January to move their cargo on vessels powered by
near-zero emissions e-fuels like e-methanol.
    The group known as the Zero Emissions Maritime Buyers
Alliance wants to use the combined clout of its members, who
have their own climate goals to meet, to create demand for
e-fuels made with renewable electricity and carbon dioxide.
Those fuels are in very short supply.
    The alliance wants to accelerate the ocean shipping
industry's move toward net-zero greenhouse gas emissions by
2050, even as U.S. President-elect Donald Trump is expected to
pull out of international commitments to combat global warming.
    The world's fleet moves more than 80% of global trade and
contributes about 3% of the world's GHG emissions. E-fuels are
vital to fully decarbonizing ocean shipping because they have
long-term potential to compete against fossil fuels on cost and
supply, the alliance said.
    "This is how you get on path and on track to being
net-zero," said alliance member Carl Berger, who leads
sustainability and export operations for Amazon Global Logistics
 AMZN.O .
    The group's three- to five-year contracts for e-fuel
transport are expected to begin in 2027.
    The cargo moved under the contract is estimated to be
equivalent to at least 1.4 million 20-foot (6.1-meter)
containers transported from Shanghai to Los Angeles. That would
enable members to abate some 470,000 metric tons of GHG
emissions that warm the planet and harm human health, according
to the group, which is administered by the Aspen Institute, a
U.S.-based think tank.
    Carriers such as Maersk  MAERSKb.CO , Evergreen  2603.TW 
and Ocean Network Express have ordered ships that can operate on
e-methanol and are working to secure supplies of that fuel.
    While alliance members hope their collective action will
lower the cost of e-fuels, they expect to pay an undisclosed
premium to help offset the higher cost versus fossil fuel. 
    "Once that market gets going, we'll start to see those costs
come down," alliance CEO Ingrid Irigoyen said of e-fuel.
    The effort could get a boost from global regulations aimed
at bringing more certainty to companies that are making the
transition to greener fuels. 
    The International Maritime Organization's Marine Environment
Protection Committee in April is scheduled to set a global
regulatory structure for reducing GHG emissions in the maritime
industry. 
    That would include regulating the phased reduction of marine
fuel GHG intensity and introducing a GHG pricing mechanism that,
among other things, gives incentives for zero-emissions fuel use
and charges a fee for each metric ton of carbon dioxide emitted.

 (Reporting by Lisa Baertlein in Los Angeles; Editing by Richard
Chang and Jonathan Oatis)
 ((lisa.baertlein@thomsonreuters.com))