Emerging Nations to Get Rich From Green Fuels as Energy Capacity Jumps 7 Times: Trafigura (5)

–Huge growth in energy capacity flagged; shipping and aviation, especially, need green fuels

May 23, 2023 — Trading company calls on International Maritime Organization to set ambitious new goals for 2030, 2040 and 2050 to decarbonise shipping, which is a key way to encourage developing countries to create massive new export industries that produce green fuel.

Much of the opportunity from the energy transition has focussed on green-hydrogen upside in North America, Europe and, to a lesser extent, Australia.

Yet many poorer countries have more opportunity, Trafigura found. Heaps more — several times current global primary energy use. The era of plentiful energy signalled by the trading company and others could usher in a period of global growth, especially if the vast fleet of windfarms, solar plants, carbon capture facilities and electrolysis machines needed can be built in a more sustainable way.

“There is significant potential for producing these fuels, not in the regions we’ve been focussing on today, but actually in the global south,”said Margaux Moore, Trafigura’s Head of Energy Transition Research and co-author of a new report, speaking by phone. “You have a lot more renewable power potential, you have more land and you have the potential to be more cost competitive in the global south.”

While biofuels and efficiency improvements can help reduce the industry’s carbon footprint in the near term, deep decarbonisation of shipping can only be achieved if the industry switches away from high carbon fuel oil to cleaner alternatives, the trader said.

To set the challenge in context, aligning the industry with a 1.5-degree temperature goal requires absolute GHG emissions reduction of 37 percent by 2030 and 96 percent by 2040, according to the Science Based Targets initiative (SBTi), it said.

Well positioned nations, according to Trafigura research, include,

but are not limited to, Argentina, Brazil, Chile, Colombia, Egypt,

India and Morocco. These countries have access to abundant

sources of renewable energy that could be used to produce green

hydrogen – the main feedstock needed to produce electrofuels

such as methanol and ammonia for shipping.

Expected growth in the aviation industry also stokes the opportunity: Scroll to the bottom for links to three related reports.

Trafigura statement, received by email — comments, emphasis added in square brackets and in bold:

Singapore, 23 May 2023 – Trafigura, a market leader in the global commodities industry, has today published new research highlighting the vital role that hydrogen-based fuels will play in decarbonising shipping – and the enormous potential for countries in the ‘Global South’ to produce green ammonia and green methanol to satisfy growing global demand for these low-emission fuels.

“Our research estimates the ‘Global South’ could produce almost 4,000 exajoules per year of competitively priced green hydrogen, against projected annual shipping demand of 20 to 40 exajoules.

[Details from p18 of the report:

Based on this approach, we have identified the west coast of South America, Oceania, the Middle East and Africa as regions with high potential. Drawing on the work of IRENA27, we found sub-Saharan Africa could produce up to 1,923 exajoules per year of competitively priced green hydrogen. Overall, we think high potential regions could produce up to 3,852 exajoules per year of competitively priced green hydrogen {approximately during the next two or three decades: from report}. Exajoules are a measure of electrical energy. To put the above figure into perspective, it is equivalent to 6.5 times primary energy consumption in 2021.]

Global price for marine fuels needed

This could provide developing countries with the chance to develop new export industries and create thousands of skilled jobs,” said Moore. “It will, however, only be realised if the shipping industry can agree on ambitious decarbonisation targets and, crucially, implement a global price on carbon for marine fuels.”

[Context from the IEA website: World energy production amounted to 617 EJ in 2019 – a 2% increase from 2018. This increase was mostly driven by natural gas (+4%) and coal (+2%), though some renewables increased much more in relative terms (e.g. +14% for solar and +12% for wind). Hydro-electricity production stagnated at 15 EJ. While it did not increase in 2019, oil remained the most produced form of energy, at 190 EJ. Fossil fuels accounted for more than 81% of production in 2019, as in the previous years.]

The International Maritime Organization (IMO) is in the process of revising its initial GHG strategy and 2023 presents an important window of opportunity to set a zero, or at minimum net zero, GHG emissions target by 2050, together with ambitious goals for 2030 and 2040.

By agreeing and implementing demanding science-based decarbonisation targets in its revised GHG Strategy, the IMO can accelerate the development of low- and zero-emission fuels and establish global fuel standards, which together will attract the investment needed to overhaul the infrastructure of the global shipping industry and retrofit, or build, new ships at scale.

“Delaying action will only add to the eventual cost of decarbonisation. The IMO needs to decisively move forward to tackle the shipping industry’s emissions and start the journey to a sustainable and resilient future,” added Rasmus Bach Nielsen, Global Head of Fuel Decarbonisation at Trafigura and co-author of the whitepaper.


The whitepaper was co-authored by Margaux Moore, Head of Energy Transition Research and Venture Investment and Rasmus Bach Nielsen, Global Head of Fuel Decarbonisation and was edited by Neil Hume, Senior Manager, Corporate Affairs for Trafigura. External voices include Katharine Palmer, Shipping Lead (UN High Level), Climate Champion; Knut Ørbeck-Nilssen, CEO Maritime, DNV; Dr Uwe Lauber, CEO, MAN Energy Solutions; Jan Dieleman, Chair, Global Maritime Forum; and Dumisani Theophelus Ntuli, Chief Director Maritime Transport Policy & Legislation, Department of Transport, Republic of South Africa.

Download the white paper here and immediately below.


Aviation decarbonisation also under spotlight:

Decarbonizing aviation: This is what the shift to alternative propulsion will require (from WEF)
Large investments are needed – and soon – to adapt airport infrastructure for new value chains around electric and hydrogen flight. Here is some expert analysis highlighting the current trends on the topic.
UN Climate Change
Decarbonizing aviation: This is what the shift to alternative propulsion will require
McKinsey & Company
Critical insights on the path to a net-zero aviation sector
World Economic Forum
Flying without emissions: how green hydrogen is greening aviation


(Adds comments from author interview; changed headline to energy capacity from energy needs, to be more specific; earlier added context to amazing figures demonstrating potential)

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