Past and present of fuel transitions through cluster investment

Monday, January 23 2023

Past and present of fuel transitions through cluster investment

In December 2022, the Lloyd's Register Foundation remotely hosted three students from the University of Oxford for micro-internships. Over the five-day placements, they used HEC's digital collections to conduct a rapid literature review focusing on one of the Foundation’s big challenge areas - such as safety at sea and safety for a sustainable future. Aside from blogs, the micro-interns have produced social media posts from their research. In this blog, we learn more about Beatriz Rilo Sanchez's research on fuel transitions.

Green Corridors

The concept of a ‘green corridor’ is a recent one, a hopeful endeavour to find a practical way for the shipping industry to reduce emissions in accordance with the Paris Agreement [1] and which acknowledges the weight of the findings of the Fourth International Maritime Organisation (IMO) Greenhouse Gas Study[2]. In this line, the Clydebank Declaration[3] was signed by 25 states at the COP26 Conference in 2021, pledging to participate in the creation of six green corridors – zero-emissions maritime routes between two or more ports - by the end of 2025.

The transition from oil to hydrogen

The key to this project is the transition to renewable sources of energy. This includes practices like shore power, and importantly, the change from oil to hydrogen-based fuels, such as green hydrogen, ammonia, or methanol. However, the construction of pipelines to guarantee supply, the increased storage space needed[4], and the introduction of hydrogen-fuelled engines, all share the same challenge: high infrastructure costs. The introduction of green corridors provides a solution through geographical investment concentration. Cargo Owners for Zero Emissions Vessels (CoZev) describe the aim of the project as ‘concentrat(ing) policy, investment, and infrastructure development in specific geographical locations where key actors are ready and willing to act’[5].

This is the case in the development of the green corridor between Montreal and Antwerp, in which the Port of Montreal specifically aims to take advantage of its existing relations with nearby producers and distributors of liquid bulk fuels[6]. In the general case, the International Energy Agency (IEA)  states that 74 MtH₂/yr of the current hydrogen demand is already located at coastal industries, as are most of the piping and storage facilities[7].

The transition from coal to oil

The transition to hydrogen fuels poses a challenge, one of the solutions to which is cluster investment. However, this is not the first time the shipping industry has experienced a fuel transition of this scale. The transition from coal to oil posed similar infrastructural costs, and a possibly larger supply challenge. How did solutions then compare to present ones like the green corridors?

The transition from coal to oil was not a uniform global process. The adoption of the new fuel depended mostly on access to it. In the United States it was first adopted in California, which lacked the north-east’s rich coal production[8], and until Britain had secured its supply through its colonial endeavours in the Arabian Peninsula, some British shipowners remained sceptical of renouncing the readily available and high-quality Welsh coal[9].

Carlo Raucci, Marine Decarbonisation Consultant at the Lloyd's Register Maritime Decarbonisation Hub, adds "One potential difference between green corridors and the coal-to-oil transition is that we now have well-established bunkering hubs. So, on one hand, ports located in the proximity of hydrogen production could be well positioned to become new bunkering hubs. On the other hand, making hydrogen-based fuels available where there is already a concentration of demand from ships (and other sectors too) could be another potential development pathway for cluster investment."

Arabian Peninsula and Aden Port case study

The example of the Arabian Peninsula, indeed, provides an interesting case study of the transition and infrastructural development. Foreign investment and agreements with the local elites lead to the rapid development of ports like Dubai, Abu Dhabi, or Kuwait[10]. In the case of Dubai, specifically, grand dredging projects made it a suitable large-scale port, while disregarding the environmental impact of such activities[11].

Perhaps one of the better examples of joint port and oil industry development is that of the port of Aden, in Yemen. At the beginning of the 20th century, Aden was one of the UK Royal Navy’s main coaling stations, and as the Navy started the transition to oil, it slowly became a major oil-bunkering port. The nationalisation of Anglo-Persian Oil Company (APOC) in 1951 and subsequent loss of access to the Abadan refinery motivated the opening in 1954 of the Aden refinery, consolidating in full Aden’s transition from coal to oil, and creating a new industrial cluster in which transportation between refinery and port were minimised[12].


Port Rashid, Dubai - United Arab Emirates. Taken on 26 March 2013


PB Refinery Aden Limited in 60's. Taken on 1 May 2012


The development of oil and bunkering ports where coal infrastructure already existed and supply was readily available, is an example of clustering in the oil transition as in the hydrogen one. The principles guiding the green corridor initiative, however, are different; motivation is not economic advantage, but sustainability. The development of the oil industry can inform present economic choices, but the disregard for the local communities and environment which characterised colonial oil-business must not be translated. The hydrogen transition is a laudable enterprise for reducing emissions, but the industry needs to be sustainable itself, cooperating with citizen representatives and putting green practices in place throughout all the links of the supply chain.  

Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily represent those of the Lloyd’s Register Group or Lloyd’s Register Foundation.

  1. [1] 2015 COP21 Paris Agreement
  1. [2] Fourth IMO Greenhouse Gas Study, 2020
  1. [3] COP26 Clydebank Declaration, 2021
  1. [4] Jones, Bolton. Hydrogen storage in future warships. 2004
  1. [5] Cozev. Roadmap to 2040. Released at COP27 2022
  1. [6] Chamber of Marine Commerce. First-ever North Atlantic Green Shipping Corridor prioritized by Montreal and Antwerp ports. 2022
  1. [7] IEA. The Future of Hydrogen: Seizing today’s opportunities. Report prepared by the IEA for the G20, Japan. 2019 – ‘Hydrogen is already in use in a number of important sectors. Demand for hydrogen in its pure form is estimated to stand at around 74 MtH₂/yr’
  1. [8]  Jones, G. Oil: a novel energy source. Futures Volume 15, Issue 3, Pages 224-225. 1983
  1. [9] Goldrick, J. Coal and the Advent of the First World War at Sea. War in History Volume 21, Issue 3. 2014
  1. [10] Khalili L. Sinews of War and Trade: Shipping and Capitalism in the Arabian Peninsula. Chapter 2: Harbour Making. 2020
  1. [11] Idem
  1. [12] Idem 
Guest blog
Hindsight Perspectives