Accelleron’s recent e-fuels survey of decision makers within the maritime industry highlighted a sector that’s eager to embrace e-fuels as a route to decarbonization. The survey also highlighted plenty of other interesting details, including the major challenges facing maritime organizations over the next few decades.
E-fuels will play a large role in the shipping industry’s journey to net-zero, with 60% of the industry’s decision-makers considering retrofitting existing ships to run on alternative fuels. According to the survey, more than nine out of the ten companies in the maritime industry believe that e-fuels play a substantial role and could make shipping more sustainable.
There are plenty of challenges ahead, however, and Accelleron’s survey provides a useful insight into the concerns of maritime executives and technical specialists. In addition to the technical complexity of producing e-fuels, for example, the survey highlights high investment costs involved in the changeover, along with a lack of availability at an international level.
The availability of e-fuels will remain poor until 2030, according to more than half of the respondents, and companies see it as the responsibility of governments around the world to create incentives to help produce e-fuels at scale, along with funding research and development. Huge costs are also a concern for the respondents. Three-quarters of those surveyed assume the cost of e-fuels will remain higher than that of fossil fuels over the next 12 years.
There are also longer-term concerns when it comes to costs. Even taking tax incentives into account, the majority of those surveyed do not expect cost parity to be reached before 2040. According to the survey, the largest cost driver is likely to be the construction and operation of production facilities.
“The absolutely massive capital investments needed for enough renewable electricity generation, very large-scale fuel production facilities, and totally modifying shipping infrastructure will be multiple trillions of dollars globally,” Daniel Bischofberger, CEO at Accelleron, tells Riviera. “It’s an enormously complex and expensive undertaking far beyond what many appreciate.”
Delving into the details
High conversion costs (50%), lack of availability (46%) and infrastructure problems (43%) were most frequently cited in the survey as obstacles to the implementation of e-fuels in the shipping industry.
A massive 82% of the survey’s respondents highlighted the implementation of e-fuels in the shipping industry to be too technically complex, while regulations are also proving a challenge, with 33% of respondents complaining about insufficient regulatory framework conditions and the lack of political support for the implementation of e-fuels.
Other obstacles include insufficient infrastructure for the storage and transport of e-fuels (36%), competition with other industries for e-fuels, including air traffic and steel production (34%), insufficient cooperation in the value chain (33%), additional technical requirements for operation and safety (27%), and difficulty in passing on costs to customers (27%).
“There are very serious risks of disastrous supply shortfalls if the demand for these fuels grows too quickly before massive production capacity can be built up worldwide,” Daniel tells Riviera. “It’s a recipe for trouble.”
There’s also concern for smaller, independent shipowners, which may lack resources to effectively plan the transition. According to the survey, only 35% of firms with annual revenues under €100M have a decarbonization transition strategy, and Daniel tells Riviera that these companies could face severe disruption to their operations if requirements accelerate without regard for their limitations.
These are all challenges that the shipping industry will need to overcome sooner than later, with three-quarters of those surveyed anticipating that the shipping industry will no longer be able to manage without e-fuels from 2045 at the latest.
Check back here soon, as we’ll also be looking at what organizations across the shipping industry actually need to overcome these challenges and make the transition to e-fuels a reality.