Green shipping edges closer with Tyne corridor plan

Strengthening of climate ambitions by the International Maritime Organization earlier this year has led to enhanced interest in exploring a range of options to help the maritime ecosystem decarbonise.

One exciting option is that of ‘green shipping corridors’ – end-to-end maritime routes between ports with a vessel operating on a low-emission fuel, and refuelling using infrastructure in both ports.

At COP26 in Glasgow two years ago, the ‘Clydebank Declaration’ was signed by 26 nations who committed to establishing green shipping corridors. The aim: to have six in operation globally by the mid-2020s.

Connected Places Catapult has helped to develop the business case for one green corridor between the Port of Tyne and the Port of Rotterdam – using renewable e-methanol as the preferred choice of fuel – in a project known as the ‘Clean Tyne Shipping Corridor’.

It forms part of the Clean Maritime Demonstration Competition Round 2, funded by the Department for Transport and delivered in partnership with Innovate UK. We have been working with highly specialised teams from Newcastle University, Lloyd’s Register, Arup, EDF Energy R&D UK, Port of Tyne and the North East Local Enterprise Partnership.

Building the case for investment in the corridor

Our role in developing the Clean Tyne Shipping Corridor involved investigating the characteristics of e-methanol, the type of vessel which could operate on the route and the port infrastructure required.

This helped us to build a logic model identifying the immediate benefits of a green corridor, plus a validation of fuel demand, assessment of options of fuel supply and operational requirements.

We were also able to agree on medium term outcomes; including the identification of fuel transition pathways for the Port of Tyne and the region, and establishing an e-methanol supply chain.

Longer-term impacts were also identified, including building the case for large scale infrastructure projects, plus delivering wider economic and social benefits for the region promised with a green corridor.

We supported this strategic outline with a review of various Government policies and international projects, and interviews with stakeholders. This helped us to identify the barriers and enablers for a concept which could prove to be a catalyst for decarbonisation in shipping.

Calculating the cost of e-methanol vessel ownership

In addition to this strategic benefit assessment, we also looked at the cost differentials of conventional vessels (operating on Marine Gas Oil) along the corridor compared to future vessels (powered with e-methanol) to prepare a total cost of ownership model.

We found that the costs for operating vessels on e-methanol are likely to increase by 50% to 60% depending upon the production source of the fuel. But this cost differential can reduce to 15 – 20% if a carbon tax of around $100/ tonne CO₂ was considered for Marine Gas Oil vessels.

We also considered various other interventions such as varying the costs of methanol production, increasing the carbon tax in future and lowering port administrative charges for e-methanol vessels, to understand the impact that different costs can have on achieving the more sustainable ambition. This work was supported by an assessment we carried out of various funding models available in the maritime industry which could be used for funding green corridor projects.

What did we learn?

Our final assessment was that a business case for a green shipping corridor would benefit immensely from introducing a ‘multiport’ strategy considering future fuel pathways at a regional level to reduce investment risk for introducing bunkering infrastructure. In the case of the Port of Tyne, this should increase their readiness for supplying future fuels. It is also important to identify early and understand any skills gaps within the region.

It is crucial too to explore options to minimise the cost gap between more sustainable fuels and current fuels, actively investigate the feasibility of carbon taxing at an international level, and explore business models by engaging directly with stakeholders of the green corridor from the Port of Tyne.

Read the Clean Tyne Shipping Corridor Roadmap.