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Creating a Global Fuel Lifecycle Methodology

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Charley Rattan's picture
World Hydrogen Leader Charley Rattan Associates

UK based offshore wind & hydrogen corporate advisor and trainer; Faculty member World Hydrogen Leaders. Delivering global hydrogen and offshore wind corporate investment advice, business...

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  • Jan 25, 2023
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Creating a Global  Fuel Lifecycle  Methodology

A qualitative assessment of existing methodologies and opportunities for the future

Recommendations for a global lifecycle methodology International maritime policy currently focuses on the TTW impact of alternative maritime fuels. However, the WTT part of fuel production is a large contributor to the GHG emissions of alternative maritime fuels. This is an element that international maritime policy has not considered so far, as IMO’s CII targets concern TTW CO2 emissions per transport work.

Furthermore, other GHG emissions (CH4/N2O) linked with alternative maritime fuel combustion are currently excluded. To incentivize the uptake of alternative fuels, the IMO must regulate the climate impact of fuels from a WTW perspective, supported by a global fuel lifecycle methodology. Consistency across various lifecycle guidelines would enable the comparison of the impact of GHG emissions across fuels and thus further support policy. In addition, any future fuel lifecycle methodology should be able to account for a wide scope of fuel production pathways, provide extensive coverage of all fugitive emission sources (including engine slips), include LUC, and seek to find ways of handling the uncertainty for consequential aspects such as iLUC. Including the WTT part of the production chain in emissions regulations has methodological implications.

The lifecycle methods identified across the different regulatory schemes assessed in this report have differences in their methodological approaches, particularly on the treatment of co-products and the inclusion of dLUC/iLUC impact, leading to a variation in the GHG emission intensity of fuels. Most of the variations are identified upstream, which could potentially constitute an opportunity for the shipping sector to drive deep societal decarbonization by sending demand signals for low-climate-impact fuels. When developing a methodology that aims to stimulate the enablement and scalability of alternative marine fuels, stakeholders (e.g., fuel suppliers) need a pragmatic approach to calculating their performance. Therefore, a straightforward, core attributional approach is preferable. However, a core consequential approach could be used to support the broader strategic decision needs of fuel producers. Some aspects of the fuel lifecycle, such as iLUC and co-product allocation, are more suited to a core consequential approach. If iLUC is included in the attributional approach, it merely adds uncertainty. Therefore, a risk-based approach categorizing feedstocks into high and low iLUC risk categories based on the feedstock type and agricultural practices is preferable.

Coupling a core attributional approach for the input and output flows and consequential for handling co[1]products offers certainty on the core GHG-intensive activities while ensuring the benefits and burden of co[1]products are adequately captured. A global fuel lifecycle GHG methodology, based on a combination approach (similar to PEF and CARB applications), would provide confidence and certainty on the climate performance of alternative marine fuels. This could play a role in fuel certification and policy-making, unlocking the fuel production capacity needed to decarbonize

 

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