en.Wedoany.com Reported - The acceleration of global shipping decarbonization is creating potential opportunities for zero-emission and low-emission fuel producers in Latin America. Although key links still need improvement, the factors driving industry transformation are already emerging.
Among various alternative fuels, green ammonia, e-methanol, and methane-based fuels with limited greenhouse gas emissions, along with their blends, are considered primary candidates. As vessels under construction adopt different types of propulsion systems, multiple alternative fuels will coexist in the future. Latin America has several green hydrogen-derived projects in the planning stage and is also a mature natural gas production region.
Fluctuations in fossil fuel prices highlight the vulnerability of traditional supply chains and underscore the importance of energy resilience and supply diversification. The European Union has promoted shipping decarbonization through the FuelEU Maritime regulation. Additionally, a vote on a broader International Maritime Organization Net Zero Framework (NZF) is scheduled for October, with the outcome still uncertain.
Gonzalo Moyano, CEO of MAE, which is planning a $2.5 billion green ammonia project in Chile's Antofagasta region, stated that beyond the specific details of this framework, the international community is sending increasingly clear signals regarding shipping decarbonization. Hans-Werner Kulenkampff, CEO of the Brussels-based decarbonization consultancy Hinicio, commented on FuelEU Maritime, stating that the regulation is real-time, regional, and is already reshaping the fuel economy for any operator within or through EU ports.
Globally, the fleet capable of using ammonia, methanol, and liquefied natural gas is expanding. In addition to newbuilds, existing vessels are also being retrofitted, such as the world's first large-scale container ship methanol conversion project operated by China COSCO Shipping Corporation.
Under the FuelEU Maritime regulation, shipowners operating within, to, or from EU ports must progressively reduce the greenhouse gas intensity of the energy used onboard, calculated on a well-to-wake basis. This process begins with a mandatory 2% reduction in 2025, rising to 6% in 2030, and reaching 80% by 2050.
Flavien Lescanne, Policy and Regulation Expert at Hinicio, noted in a recent webinar that FuelEU Maritime is the only EU regulatory framework that can create value for renewable fuels of non-biological origin (RFNBO) and low-carbon fuels (LCF) in producing countries without mandatory delivery to the EU, providing a very strong incentive for the offtake of these molecules based on shipping routes.
For shipping to and from EU and European Economic Area ports, 50% of onboard energy use is subject to this regulation, while operations within the region must comply 100%. Technically, vessel operators can use fossil LNG to meet compliance requirements for about eight years, as it reduces greenhouse gas emissions compared to traditional fossil fuel oil. Lescanne stated that many players are relying on LNG, at least in the short term, to fulfill their emission obligations, as LNG currently has a cost advantage over cleaner alternatives.
According to DNV, a Norwegian assurance and risk management company, global LNG bunkering infrastructure has matured rapidly, with bunkering capabilities available at major hubs along all key trade routes. Meanwhile, alternatives like liquefied e-methane and biomethane are drop-in fuels compatible with existing LNG engines, tanks, and bunkering systems. The EU has introduced specific incentives for using RFNBOs such as e-methanol and green ammonia. Lescanne indicated that shipowners can use several options simultaneously to achieve targets, and non-compliance will result in penalties.
Latin America, particularly Chile, is leveraging hydrogen as a means to diversify exports, decarbonize certain sectors, and stimulate investment. The country has established a robust project pipeline and is positioning itself as a potential supplier of hydrogen and its derivatives, such as ammonia, methanol, and sustainable aviation fuel, to regions like Europe. The latest large-scale sustainable fuel project to enter Chile's environmental review system is the $1.2 billion e-methanol complex proposed by NorQuim, with an expected annual production of up to 420,000 tons, targeting the export market for marine and aviation fuels.
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