Green corridors: Silk Alliance sees methanol and ammonia demand increasing

This analysis, which can be viewed in the most recent progress report, forms part of the fuel demand workstream. The projected costs and emissions, given this aggregated demand, depend on the carbon intensity of the fuels, and research in this area forms part of workstream two – fuel supply. 

Under this workstream, members  agreed to set the desired carbon intensity of the fuels between 20% and 10% in terms of lifecycle emissions compared with fossil fuels. The analysis under both workstreams – fuel demand and fuel supply – will continue to capture any changes while members continue to discuss implementation.

The Alliance is now applying the projected fuel requirements and tentative carbon intensity to scope the cost gap within the Silk Alliance green shipping cluster and to identify financing mechanisms that can bridge these gaps.

Forming part of workstream three, the Alliance has created an asset-based cash flow model and is mapping out various options, including leasing structures, public-private partnerships, leasing platforms and mass balancing among others, to unlock supply-side investments.

Commenting on the progress made by the group, Maritime Decarbonisation Hub senior decarbonisation analyst Ahila Karan said, “Through quantifiable tasks set out to bridge these cost gaps and fulfil key milestones in the implementation plan from now until 2030, we aim to demonstrate that zero-carbon shipping at scale is both feasible and practical.”

Silk Alliance members will establish the sequence of the green corridor, including where the corridor will start and how it will scale over time. Members aim to identify which fuel pathways to escalate from the initial pilot project stage by early 2025, weighing each fuel’s carbon intensity and supporting the pathways with near-zero carbon fuels.

The hope is that the green corridor cluster can create a significant spillover effect, driving more and more demand for methanol and ammonia as fuel.

Another milestone will see Silk Alliance members focus on finance to address investment hurdles and identify financing mechanisms to get the initiative underway.

By aggregating demand for alternative fuels through the pilot vessels running on low-carbon methanol and ammonia deployed in this initiative, members hope to drive investments into scaled alternative fuel supply infrastructure in Singapore and the intra-Asia container trade route from 2028 to 2030. 

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