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Shell steers course toward net-zero shipping, with hydrogen on the horizon

container ship at sea

Shell has unveiled plans to tap hydrogen fuel cells and liquified natural gas to wean its carbon-intensive shipping business off heavy fuel oil as it works toward its aim of becoming a "zero emissions company" by 2050.

In a roadmap published Tuesday — "Decarbonizing shipping: Setting Shell's course" — the oil giant said it had identified hydrogen fuel cell technology as the zero-emissions technology with the greatest promise for helping the hard-to-abate shipping sector achieve net-zero emissions by 2050.

As such, the roadmap outlines plans to "advance its research" in hydrogen fuel, which it believes holds the potential to become more cost-competitive than alternative zero-emissions fuels due its potential for the decarbonization of multiple industries.

However, with zero-emission fuel unlikely to be commercially available until the 2030s, the oil and gas giant emphasized it would also take steps in the short-term to make its shipping operations more energy-efficient. This will involve investing in a range of solutions, such as wind assist, air lubrication, advanced engine lubricants and digital optimization technologies, it said.

Shell said it would develop a set of performance standards for future new-build vessels for all ship types in order to meet an aim of delivering "up to 25 percent emissions savings."

Liquefied natural gas (LNG) is also set to play a "critical role" in making Shell's shipping operations more sustainable, according to Tuesday's update. The firm estimates the fuel can reduce greenhouse gas emissions by between 15 to 21 percent — depending on the size of the ship's engine — compared to heavy fuel oil that traditionally has powered ships. In addition, LNG can be used with fuel cells to aid the development of the technology, it said.

Shell therefore said it would double its existing LNG bunkering infrastructure on key international trade routes by the mid-2020s.

The shipping industry needs to develop the new technologies, fuels and infrastructure required for a net-zero emissions sector at a pace never previously seen.

Grahaeme Henderson, global head of Shell's shipping and maritime business, stressed the decarbonization of the shipping industry would require stakeholders from across the sector to collaborate on new innovations at a breakneck pace.

"The shipping industry needs to develop the new technologies, fuels and infrastructure required for a net-zero emissions sector at a pace never previously seen," he said. "This will require the determination of all of those at the forefront of this transition."

Shell also committed to establishing a consortium that will develop and trial fuel cells on a commercial deep sea vessel, and implementing an emissions data collection program across Shell's internationally traded and voyage charters, with a view to ultimately publish annual carbon intensity data.

The company also pledged to "build the commercial case" for carbon-neutral lubricants through the development of its nature-based solutions portfolio, and to collaborate with "those at the leading edge of the transition in the sector" in order to accelerate decarbonization, in particular the Getting to Zero coalition working to make U.S. and Canadian cabotage shipping operations more sustianable.

The pledges came as Shell this week announced plans to cut 7,000-9,000 jobs across its global oil and gas business, as the company reels from plummeting demand for oil in the wake of the COVID-19 crisis that has affected the entire sector. 

But in the meantime, the firm has continued to increase its interest in the green economy and towards furthering its net zero goals, for which the new shipping roadmap marks just the latest move.

Henderson said the firm had developed its "ambitious course" on shipping after consulting with customers and partners in the sector. "I hope that by doing so, openly and transparently, others will be encouraged to join us and help create a net-zero emissions future for shipping," he added.

The oil giant also urged the International Maritime Organisation (IMO) to raise the industry's decarbonization ambition by setting out a "clear trajectory" for how the industry can deliver net-zero emissions by 2050.

In response, a spokesperson from the U.N. agency told BusinessGreen the IMO had adopted a greenhouse gas strategy with "ambitious goals." 

"The Organisation's immediate focus is on finalizing the short-term greenhouse gas reduction measure to ensure achievement of the 2030 level of ambition of reducing carbon intensity by 40 percent compared to 2008, followed by discussions on other candidate measures listed in the Strategy, including possible market-based measures," the spokesperson said.

IMO also flagged that Shell, as a company, cannot make submissions directly to IMO. Submissions must be made by "by Member States and NGOs in consultative status," it said.

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