EMEA News
Dutch Bank Makes Case for 'Blue' Alt Fuels
A Dutch bank has questioned the economic sense of ship operators opting for the greenest alternative fuel.
In a lengthy paper released last month, finance house ING points to efficiency and pricing discrepencies between different alternative bunker fuels that are too big to ignore.
Synthetic fuels, such as methanol and ammonia, are made whereas fossil fuels are underground. That production process is intense and inefficient so that ships burning synthetic fuels get to use between 20-25% of the energy provided.
It also takes a lot of green energy to produced green, synthetic fuels, the paper found.
"In the Netherlands more than 100 gigawatts of offshore wind energy is needed to substitute all the oil-based bunker fuels for aviation and shipping with synthetic fuels," according to the bank. But there is nowhere near that capacity available.
Another factor to consider, according to the bank, is competition for green carbon used in making some synthetic fuel. This could cause problems during the energy transition as although carbon is currently cheap, in a net-zero economy, that would no longer be the case.
"Given the energy inefficiencies and the likely shortages of green sources of carbon, it might be better to produce blue instead of green methanol," ING said.
The difference being that while blue methanol is still produced from fossil fuels (where the carbon can be captured) and is not as green, it is more efficient, at least, until the energy market has changed sufficiently for it not be so.
