Decarbonisation of Global Shipping and Opportunities for India
The global shipping industry is moving towards decarbonization by 2040-50, presenting significant opportunities for India. Current fuels used include Very Low Sulphur Fuel Oil (VLSFO), diesel, and methane gas stored in liquid form. However, the industry is transitioning to green fuels like green ammonia, green or e-methanol, and biofuels. LNG-powered engines, due to their higher efficiency, are seen as a transitional fuel.
Green Fuels in Shipping
- Green Hydrogen: Produced via electrolysis of water using renewable power. While not directly used in shipping due to storage and transportation challenges, it forms the base for other green fuels.
- Green Ammonia: Made from green hydrogen and nitrogen, it is more stable and is being promoted in India for use in fertilizers as a substitute for LNG imports.
- Green Methanol: Made from green hydrogen and carbon dioxide from industrial sources. It's favored in shipping for its lower greenhouse gas emissions.
India's Commitment and Strategic Plans
- India aims to decarbonize domestic shipping and is establishing green fuel bunkering points at ports like Tuticorin and Kandla.
- Plans to supply green fuels to Singapore, the largest global ship fuelling station, are underway.
Challenges and Policy Framework
- India faces challenges in becoming a marine green fuels hub, including the need for solar panel and electrolyzer imports.
- However, India's solar energy revolution provides a model for green fuel adoption, supported by sovereign guarantees and strategic frameworks.
Financial and Technological Support
- Sovereign guarantees can de-risk investments in green methanol, reducing costs and improving project economics.
- Production-linked incentive schemes for electrolyzers can alleviate supply chain issues and reduce raw material transportation costs.
- Carbon capture, utilization, and storage (CCUS) incentives are critical for producing green methanol from sequestered CO₂..
- India is pushing to increase local electrolyzer manufacturing capacity and utilize industrial CO₂ sources to develop integrated green fuel hubs.
- Partnerships with international shipbuilders from South Korea and Japan enhance India's shipbuilding capabilities.