UK unveils clean bunker fund, harnessing industry, government resources

Coastal communities across the UK are to receive over GBP1.1 billion ($1.50 billion) in joint government and industry investment for the maritime sector, the government said in a statement Sept. 15.

The funding includes GBP700 million of private investment for major UK ports and leading industry players, as well as GBP448 million of public investment to reduce emissions from UK shipping. The announcement came at the start of London International Shipping Week.

Almost half a billion pounds will bolster the government's UK SHORE program, which supports the research and development of new clean maritime technologies and fuels, including electric, hydrogen, ammonia, methanol, wind power and more.

Previous projects have included electric chargepoints at UK ports for ships developed by Aqua Superpower and smart technology developed by Waterwhelm, which can produce hydrogen from recycled wastewater to generate electricity.

Momentum is expected to build for alternative fuels as companies strive to meet CO2 targets. The issue is the lack of fuel availability and actual main engines for these ammonia and hydrogen dual-fueled vessels being built in the shipyards. Until then, LNG and biofuels, along with a handful of methanol, are the main candidates to fill the slots until the new fuels are tested and more prevalent, analysts at S&P Global Energy said.

The analysts expect the alternative fuel as part of the overall bunker demand mix, excluding LNG and LPG, will only rise from 0.6% in 2022 to 7.8% by 2030.

Looking to 2050, ammonia and hydrogen seem to be the companies' choices for now to meet CO2 targets. The physical infrastructure could come from environmental, social and governance investors, who could provide the vast capital needed to meet the demand from shipowners and engine manufacturers working with the industries to build scalable products, the Energy analysts said.

July's average cost for green ammonia delivered to East Asia on a cargo basis was $44.09/Gj, while the delivered bunker price for 0.5%-sulfur fuel oil was $12.63/Gj, and 0.1%S marine gasoil was $15.42/Gj, according to the Platts bunker cost calculator from Energy.