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23.03.2023 · Ioannis Tsiropoulos, Alkistis Florou, Panagiotis Fragkos

International bunker fuels and the Paris Agreement goals


Despite their comparably small share in global GHG emissions, ~3% in global greenhouse gas (GHG) emissions in 2018 and ~2% in global CO2 emissions in 2019 respectively, international shipping and aviation pose a great challenge to global decarbonization efforts. The activity and resulting emissions of maritime and aviation industries are expected to grow exponentially, as a result of global population rise, trade expansion, and economic growth.

This would deal a blow to the Paris Agreement, which calls for rapid emission reductions towards carbon neutrality by mid-century through a large-scale transformation of the global economy, including energy and transport systems. International shipping and aviation industries should be massively transformed too, through energy efficiency improvements, moderation of activity growth (lifestyle changes and shortened supply chains), and large uptake of low-carbon fuels, especially advanced biofuels, hydrogen, ammonia, and synthetic fuels. To this end, the combination of technical and operational measures along with significant uptake of alternative sustainable low-carbon fuels is critical to ensure large emission reductions in these sectors, with a limited cost increase.

In this new study, we provide a more robust assessment of the international maritime and aviation sectors using two bottom-up sectoral international bunker fuel models, PRIMES-International Maritime, and the Global Aviation Model. Then we integrate the data and insights gained into PROMETHEUS, a global energy system model, to improve how international aviation and shipping are represented in global Integrated Assessment Models (IAMs), and to assess their contribution to the Paris goals and impacts on other sectors, fuels, and transition pathways. For more details on all models used, see the annex at the end of this post.

Global Transport Scenarios

To understand what decarbonization will mean for international maritime and aviation, we quantified the following scenarios:

  1. One (1) Baseline scenario for the maritime sector: it projects the sector’s growth by sub-sector globally in a context of moderate climate and energy policies. For this scenario, the PRIMES-International Maritime Model was used.
  2. Three (3) Global scenarios for the aviation sector: a Reference (Ref) scenario that assumes no major decarbonization action, the C-price scenario that assumes a gradually increasing carbon price on fossil kerosene, and the Mandates scenario that on top of carbon price assumes quotas on alternative jet fuels. For these scenarios, the Global Aviation Model was used.

Baseline/Reference conditions  – key findings

Total maritime trade activity for major shipping segments is set to grow by almost 90% in 2050 compared to 2018. This is in line with IRENA’s BES scenario projections (2021). Global aviation is projected to grow to almost 19 Gpkm in 2050, projections that are within the range of the International Civil Aviation Organization (ICAO 2022) and the International Council on Clean Transportation (ICCT 2022), both of which underly the importance to decarbonize the sectors.

Decarbonisation of the aviation sector – key findings

The use of energy drops by 8-13% in 2050 (compared to the Reference scenario), partly due to lower activity caused by the introduction of the carbon price or the mandate, which makes fuels more expensive. The C-price scenario projects that the use of hydrogen will increase significantly in 2050. In contrast, the Mandates scenario projects the uptake of alternative fuels triggered by the introduction of such quotas (i.e., more than 50% of fuel consumption in aviation, while retaining an 86% share in the pool of liquid jet fuels). The analysis shows that price signals alone may not be adequate to achieve the emission reduction required for the ambitious Paris Agreement emissions reduction trajectories. To this end, alternative jet fuel mandates may be necessary for the sector to achieve further emission reductions.

Regional Case Studies

With a focus on Europe, we developed 4 regional case-study scenarios for maritime and aviation on top of the global scenarios.

 European maritime:

  • Allmar scenario: a carbon price applies on emissions from activity in intra-European and extra-European routes;
  • OperStand scenario: a carbon price and operational standards apply.

European aviation:

  • TickTax scenario: an additional fixed cost applies to the ticket price, which reaches gradually 180 Eur/ticket in 2050. This ticket price is considered sufficient to induce modal shifts to fast rail;
  • NeutralMand scenario: mandates on alternative jet fuels apply. These mandates are technology neutral (i.e., not prescribed on a specific fuel).

European maritime – key findings

  • Sector demand grows between 2030 and 2050.
  • Energy consumption per transport unit improves significantly from 2020 to 2050.
  • Operational standards reduce energy consumption.
  • GHG intensity target brings about the penetration of zero-emission fuels to about 90% in 2050 in both scenarios.
  • Biofuels are the main alternative maritime fuel. Biofuels are more widely used because they cost about 25% less than e-liquids.

European aviation – key findings

  • Ticket taxation is a driver of modal shifts to less carbon-intensive modes and larger emission reduction.
  • Transport by air becomes more expensive for households and so activity drops (TickTax scenario).
  • Carbon intensity of air travel is notably higher (TickTax vs. Mandates scenario).

Still, an important amount of work is needed to improve the models and explore the contribution of international bunker fuels to the Paris Agreement goals. Enhancing data alignment across activity, energy, and emissions on a regional basis, regional differentiation of fuel prices, and higher technology representation are steps towards this direction. The findings of the present work point towards the importance of both demand-side (e.g., lifestyle changes, shortened supply chains, operational improvements) and supply-side measures (e.g., deployment of alternative fuels).

Implications for the global energy system

To capture the implications for the entire energy system, the systemic feedback, and the interplay with domestic and international climate policies, we expanded the PROMETHEUS model further with an improved representation of international shipping and aviation transport sectors, informed by data and insights from the bottom-up sectoral models. The modelling enhancements reflect the short-term impacts of the COVID-19 pandemic and are validated with the latest statistical data and information. Detailed techno-economic assumptions were also included for various emission reduction options, both on the demand side and on the supply side, using alternative low-emission fuels, including biofuels, synthetic e-fuels, electricity, and hydrogen.

The emission reductions achieved in international transport in the 1.5°C-compatible scenarios range between 65% and 85% relative to 2015 levels, indicating that the sectoral goals of the International Maritime Organization (IMO) and ICAO for 2050 are over-achieved in these scenarios. Still, more ambitious emission reduction goals should be established to ensure that the sectoral transition is compatible with the 1.5°C Paris Agreement goal towards net-zero shipping, as declared by several countries in COP26.

To get there, a combination of market-based (carbon pricing) and regulatory instruments (e.g., blending mandates, technology, or efficiency standards) will be required, along with large amounts of direct and indirect investment toward the production, transport infrastructure, trade, and use of sustainable, low-emission fuels and associated technologies.

The decarbonization process may generate synergies and trade-offs with the low-carbon transition in other sectors, by increasing the competition for the limited biomass resources or creating stresses in the renewable energy potentials needed to produce green hydrogen and e-fuels. Meanwhile, domestic climate policy measures result in lower demand for international shipping (due to reduced fossil energy trade), indicating positive feedback and synergies of the domestic energy transition with the decarbonization of the international shipping sector.

For more details on the study and its results, see Deliverable 2.1 here.

Appendix: Model descriptions

The PRIMES-International Maritime Model assesses current and future policies that impact the maritime sector by projecting international maritime activity, fleet composition, bunker fuel consumption by type of fuel, and the derived GHG and other pollutant emissions until 2050. It covers the global freight sector split into various shipping segments (dry bulk, tankers, containers, and general cargo). The model, while regional in its disaggregation, explicitly includes more than 40 countries as key trading countries. On the supply module, the model includes a detailed representation of technologies and fuels.

The Global Aviation Model projects fuel consumption and emissions from international passenger aviation in the long term. It has a global scope, covering in detail passenger trips per origin and destination between 105 countries. The trips are distinguished in different distance bands, and the demand of the different distance classes is met by aircraft of different sizes. The supply module includes explicitly different aircraft technologies, different propulsion systems, and different fuel types (i.e., conventional kerosene, alternative low-emission jet fuels, hydrogen, and electricity).



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