Accelerating the Production of Alternative Fuels in the Shipping Industry

Trade and employers’ association Danish Shipping has launched its recommendations to accelerate the production of alternative fuels.

The recommendations were unveiled following a summit in Copenhagen attended by representatives from shipping companies, fuel producers, authorities, the Minister for Industry, Business, and Financial Affairs, and others. It was concluded that a joint effort and political focus are essential to ensure that the industry’s ambitious climate goals are met. A significant part of the solution must be found at the European level.

Danish shipping companies are ready to invest in new vessels and green fuels, yet they expect to predominantly operate on green fuels only after 2035. This was emphasized by the largest Danish shipping companies in a recent survey conducted by Danish Shipping. The reason for this is a lack of green fuels. Large investments are needed across the entire value chain—from renewable energy and green fuel producers to shipping companies that currently lack the necessary green fuels to power their vessels.

Additionally, international climate regulations for shipping are required to create stronger incentives for green operations across the industry. This is why Danish Shipping recently convened the Minister for Industry, Business, and Financial Affairs and key representatives from the entire value chain to discuss the urgent situation. At the same time, Danish Shipping urged all stakeholders, particularly the Danish government, to prioritize this agenda at the European level and bring the issue to the negotiating table in the EU.

“We face a critical situation in our hopes of achieving our green ambition of climate-neutral shipping by 2050. We simply do not have the luxury of waiting much longer for more affordable and accessible alternatives to fossil fuels. We urgently need much larger volumes of green fuels to power our ships. Every link in the chain understands the gravity of the situation and is ready to act. Now, we must collectively find ways to ensure that good intentions translate into real action,” Anne H. Steffensen, CEO of Danish Shipping, pointed out.

Among the recommendations are a diplomatic push for ambitious global regulations, financial support schemes in both Denmark and the EU for the shipping sector’s green transition, the need for strategic partnerships in green fuel production, and the crucial expansion of renewable energy.

Recommendations to the Danish Government:

• The government prioritizes a diplomatic offensive for ambitious global regulation of shipping within the IMO.
• The government focuses on a scale-up of the production of green fuels for shipping.
• The government allocates a larger share of the revenue from the EU Emissions Trading System (EU ETS) to support the green transition of the shipping industry. The primary focus of these funds should be to accelerate the production of green fuels.
• The government establishes support schemes to ensure financial backing for the green transition of shipping, including the scaling up of green fuel production.
• Additional dedicated support funds for shipping via the EU Hydrogen Bank.
• The government works towards committing Denmark to a series of strategic partnerships with selected countries to produce green fuels.
• Government prioritization of green shipping cooperation in the North and Baltic Seas, including concrete green routes.
• The government develops a PtX strategy for shipping, as outlined in the 2021 PtX strategy, to clarify potential and ambitions.
• The government fulfills its ambitions for the rollout of renewable energy by at least realizing the political agreement “Danmark kan mere II”.
• The government, based on the recommendations of the Danish Havnepartnerskab (Port Partnership), ensures the establishment of the necessary infrastructure in relevant ports to accommodate national and regional demand for future port services.

“The shipping sector accounts for three per cent of global CO₂ emissions. If we do not ramp up green fuel production, we simply cannot achieve a green transition—let alone comply with the regulations already in place. Furthermore, there is a significant risk of becoming critically dependent on China, which is far ahead of the EU in green fuel production, much like in the solar and wind industries,” H. Steffensen continued.

Achieving these goals requires massive investments throughout the value chain and collaboration between industries and authorities at both national and European levels.