The maritime industry is a critical component of the global supply chain and infrastructure, making it a key target for decarbonization efforts. But there are numerous challenges to doing so, such as the wide spectrum of vessel types, sizes and uses given the global nature of the industry, their long lifespans and the large amounts of fuel they require.
It’s a tough but critical sector, which is why we are excited to announce our investment in Purus Marine, a maritime infrastructure company focused on supplying innovative low-carbon vessels to large corporate and government customers. Purus’ equipment is critical to supporting global energy transition and are utilized across the entire renewable energy value chain.
Charting a Course to Decarbonization
Maritime vessels are both major energy users and polluters. The industry is responsible for 3 percent of global CO2 emissions, 9 percent of sulfur oxide emissions and 2 percent of particulate matter. Low-income communities around ports are disproportionately impacted by marine emissions and experience higher rates of respiratory and cardiovascular disease, dangerous soil and water quality, and poorer health outcomes. Additionally, large corporates working to decarbonize their supply chains are increasingly looking at scope 2 and 3 emissions, and shipping, which accounts for 90 percent of traded goods, is a key target of those efforts. But 99 percent of the global marine fleet still uses high carbon fuels due to the specialized nature and high cost of environmental technologies.
Purus was established by investment firm EnTrust Global in 2020 to support the maritime industry’s transition to zero-carbon. The company currently owns over 50 low-carbon marine vessels across four key customer segments: offshore wind services, ferries, low carbon fuel carriers and logistics. The maritime industry is diverse and does not have a silver bullet for decarbonization and therefore will require a range of approaches. As a difficult industry to decarbonize, it also benefits from intermediate solutions. For example, battery technology is a viable pathway primarily for propulsion vessels traveling relatively short distances on set schedules with access to charging stations. Liquified natural gas (LNG), liquified petroleum gas (LPG) and biofuels are useful for difficult-to-decarbonize vessels where energy use is high and the required energy storage is so substantial that zero carbon solutions are currently unfeasible. When deploying these vessels, Purus Marine adds energy savings devices to improve efficiency and even carbon capture and storage technologies in some circumstances.
The economic life of a vessel is generally 25-30 years, meaning vessels built today might still be in service in the 2040s. But it is likely that zero carbon technology will evolve drastically by then. For example, ultra-low or zero carbon fuels such as green ammonia, hydrogen, methanol and synthetic liquified natural gas are promising for long distance transports but these technologies are still nascent.
For these reasons, Purus utilizes vessels that are modular and adaptable to future pathways for decarbonization to keep pace with the needs of the energy transition. Purus’ vessels are currently low-to-zero-carbon with the goal of being net-zero in the 2030 decade. But even today, Purus’ platform operates with 20-100 percent fewer carbon emissions than its peers and the decarbonization benefits are immediate. Purus’ fleet is estimated to be capable of reducing carbon emissions by over 250,000 metric tons per year upon deployment, equating to the removal of approximately 47,000 gasoline powered cars per year.
Regulations to Steer Demand
While there is already growing interest in low- and zero-carbon vessels, a significant driver of demand will be ambitious regulations. The global shipping regulation authority, the IMO, is an agency of the UN and therefore incorporates guidance from the UN Sustainable Development Goals when setting its decarbonization objectives. The IMO has recently set its most aggressive standards to date which aims to reduce maritime emissions by 50 percent by 2050, with discussions on whether this ambition should be increased to 100 percent.
Economic viability of these vessels will also be furthered by market-based measures such as the EU Emissions Trading System (ETS), which mandates that carbon allowances must be purchased to compensate for vessel emissions. These allowances are designed to become more expensive over time. The inclusion of maritime shipping in the EU ETS is expected to put pressure on other regions such as China and the US to implement similar market-based measures in the future.
Purus Marine will use this funding to continue to expand its business, meeting the demand for low-carbon marine equipment from its customers and growing its fleet to over 100 vessels, utilizing commercially viable decarbonization technologies that suit the vessel type and use case. We are excited to be working with Purus to advance decarbonization across the maritime sector and believe the platform’s unique capabilities to move to net zero and the high incentives that exist to drive down emissions could help facilitate a historic turning point in the industry.
