Action needed to meet growing demand for sustainable fuels on Rotterdam-Singapore Green and Digital Shipping Corridor

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Based on current order books, the potential demand for sustainable variants of methane and methanol for container vessels on the Rotterdam-Singapore route could reach up to 5 million tonnes per year in 2028. However, affordability and availability still needs to be improved to enable the switch to sustainable fuels.

The Rotterdam-Singapore Green and Digital Shipping Corridor aims to reduce emissions from large container vessels on the 15,000-kilometre route by at least 20% by 2030 by enabling the use of low- and zero-carbon shipping fuels. The project is supported by 25 partners, operating more than 90 large container vessels on the route, with a combined transport capacity of 1.5 million containers (TEU) per year.

Multiple fuels are currently under development to enable low or zero-carbon sailing of large container vessels. Bio-based and synthetic (e-) variants of methanol and methane are currently the frontrunners in this development, with ammonia and hydrogen expected to follow in the coming years. Based on current order books, partners in the Green Corridor will operate more than 200 vessels by 2028 which are capable of using bio- or e-versions of methane or methanol.

Affordability, Availability and Acceptability

Current order books consist of dual-fuel vessels, capable of sailing on either methane or methanol, and fuel oil. This means pricing mechanisms and the availability of fuels remain key drivers of actual demand for sustainable methane and methanol.

Sustainable fuels are estimated to be two to three times more expensive than fossil fuels and could account for a significant portion of the total cost of ownership for container vessels. This makes it difficult for shipping companies to commit to long-term offtake agreements, thereby hampering investments from suppliers in new production facilities.

To address this "chicken-and-egg" problem, international bodies such as the European Union and the International Maritime Organization can play a role to spur production of sustainable fuels by helping to match demand and supply. This could be similar to the marketplace mechanisms used by the European Hydrogen Bank but tailored specifically to bridge shipping fuels.

In addition Port of Rotterdam and the Maritime and Port Authority of Singapore, are also working to increase the acceptability and up-take of sustainable fuels by providing clear safety and operational framework for ships looking to bunker at port.

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