DOE’s Action Plan for Maritime Energy and Emissions Innovation: Implications for Biofuels

In December 2024, the U.S. Department of Energy (DOE), in collaboration with other federal agencies, released An Action Plan for Maritime Energy and Emissions Innovation. This comprehensive strategy aims to guide the U.S. maritime sector toward achieving near-total greenhouse gas (GHG) emission reductions by 2050. It sits alongside other action plans that cover light-duty vehicles, medium- and heavy-duty vehicles, and aviation, all of which seek to implement the goals set out in The U.S. National Blueprint for Transportation Decarbonization published in 2023.

The timing of DOE’s publication of this Action Plan was no doubt at least partially influenced by the change of administration, and limited progress is likely during the next four years given president-elect Trump’s position on climate change. However, given the U.S.’s significance in the maritime sector – as the world’s largest importer and second largest exporter – the report provides an overview of the strategic options to decarbonize the U.S. marine sector over the longer-term and the implications for sustainable marine fuels (SMF), including biofuels.

Background and Context
The maritime industry is integral to the U.S. economy, facilitating approximately 99% of overseas trade and contributing over $500 billion to the gross domestic product. It supports more than 10 million jobs nationwide. However, the sector is also a significant source of GHG emissions, accounting for about 4% of the U.S. transportation sector’s emissions, which, in turn, are responsible for around one third of the U.S.’s total GHG emissions.

Figure 1 provides details on the composition of the U.S.-flagged and foreign-flagged vessel fleet. The Action Plan breaks the sector into four segments:

1. Ocean Going Vessels (OGV), which include bulk carriers, container ships, tankers, Ro-Ros cruise ships and general cargo,
2. Harbor Craft, which include commercial fishing, barges, ferries, passenger ships, tugs and offshore support vessels,
3. Non-Commercial Vessels, primarily recreational craft, and
4. Department of Defense Vessels, which include vessels operated by the U.S. Navy and U.S. Coast Guard.

Figure 1. U.S.-flagged and foreign-flagged vessels per maritime market segment

Source: An Action Plan for Maritime Energy and Emissions Innovation

As Figure 1 indicates, while small in numerical terms, OGVs contribute the majority of gross tonnage and nautical miles travelled and so are responsible for the majority of marine fuel consumed and GHG emissions.

In addition, while the U.S. is a key contributor to maritime trade, the U.S.-flagged OGV fleet is relatively small. Therefore, the Action Plan needs to consider both U.S. flagged vessels and international vessels that bunker in the U.S. As Figure 2 indicates, while the vast majority of the world’s fleet is conventionally fueled, 50% of new ships on order are alternatively fueled, with LNG and methanol being the leading options. Drivers behind this shift to alternatively fueled ships include the International Maritime Organization’s (IMO) Strategy on Reduction of GHG Emissions from Ships which calls for a 40% GHG emission reduction per transport work versus a 2008 baseline, regional legislation such as the EU’s FuelEU Maritime, and corporate decarbonization strategies from some of the world’s leading shipping companies such as Maersk, CMA CGM, Hapag-Lloyd, and COSCO Shipping.

Therefore, the U.S. will need to consider how to provide the fuel and infrastructure needs of these vessels as well as the domestic fleet.

Figure 2. Alternative Fuel Uptake in the World Fleet by Gross Tonnage

Source: An Action Plan for Maritime Energy and Emissions Innovation

Key Objectives of the Action Plan
The Action Plan outlines several strategic objectives to decarbonize the maritime sector:

1. Sustainable Maritime Grand Challenge: This initiative seeks to coordinate with industry stakeholders to rapidly deploy competitive, affordable, and scalable fuels and technologies. The goal is to accelerate the adoption of low- and zero-emission fuels, such as green ammonia and methanol, and to modernize shipbuilding and port infrastructure.
2. Transition to Low-GHG Fuels: The plan emphasizes the adoption of alternative fuels, including green ammonia and methanol for ocean-going vessels, sustainable drop-in fuels, and the implementation of vessel electrification and hydrogen fuel cell technologies. This transition is crucial for reducing the carbon intensity of maritime operations.
3. International Collaboration: The U.S. aims to lead through international partnerships and commitments, such as those with the IMO and the Green Shipping Challenge. These collaborations are essential for harmonizing global efforts toward maritime decarbonization.

Near-Term Actions (By 2030)
To achieve substantial emissions reductions by 2050, the Action Plan outlines several near-term actions:

• Deployment of Low-Carbon Vessels: This includes increasing operational efficiencies, reducing at-berth emissions through solutions like shore power, and promoting vessel retrofits, rebuilds, and replacements with cleaner and zero-emission technologies.
• Production of Sustainable Maritime Fuels (SMFs): The plan sets targets to produce 700 million heavy-fuel-oil (HFO) equivalent gals of SMF by 2030 and 80 million gasoline-equivalent gals of marine green gasoline annually by the same year. These fuels are expected to have significantly lower GHG emissions compared to traditional marine fuels.
• Infrastructure Development and Shipbuilding: Supporting advancements in ship design and construction for low- and zero-emission vessels is a priority. Additionally, the plan advocates for the development of infrastructure for the production and bunkering of sustainable maritime fuels within the U.S.
• Workforce Development: Preparing current and future generations of engineers, scientists, and technical specialists in decarbonization is essential. The plan promotes a more diverse maritime workforce equipped to handle emerging technologies and sustainable practices.
• Strategic Partnerships and Collaborations: Engaging with port-adjacent communities and stakeholders is vital to inform technical and policy decision-making. The plan also supports the expansion of resources for tools and models that calculate GHG emissions and potential reductions in the maritime sector.

New Fuel Pathways
In terms of new fuel pathways including SMFs, the Action Plan includes the following approaches for each vessel category:

• Ocean-Going Vessels: prioritize clean ammonia and methanol fuels by 2050, with biofuels integrated as a direct drop-in replacement in the near-term.
• Harbor Craft: prioritize hybrid electric, battery electric, and hydrogen fuel cell technology adoption by 2050, while integrating biofuels in the near-term.
• Non-Commercial Vessels: prioritize sustainable drop-in fuels while focusing on advancing efficiency improvements such as hull designs as well as hybrid electric, battery electric, and hydrogen propulsion systems by 2050.

As an example of the DOE’s expected evolution of SMF, Figure 3 details the report’s envisaged evolution of marine fuels used by OGV. While biofuels are seen as the initial SMF solution, given their utility in the legacy fleet, the report suggests that, in the long-term, clean ammonia (produced from green or blue hydrogen) and bio- and e-methanol will be the primary compliance options.

Figure 3: OGV Marine Fuel Usage

Source: An Action Plan for Maritime Energy and Emissions Innovation

There are, however, challenges and risks to this projection and the transition to low- and zero-emission fuels more generally:

• SMF Comparative Cost: The Action Plan does not supply any comparative cost data to support this view of the future, and other studies¹ suggest that while the cost of clean ammonia and e-methanol will reduce over-time they will remain a higher cost option than biodiesel or bio-methanol even if carbon prices of up to 100 Euros per metric ton of CO₂ are considered.
• Vessel Replacement Rates: The annual replacement rate of vessels in the U.S. is relatively low, necessitating a focus on retrofits and upgrades to existing vessels to achieve emissions reductions.
• Infrastructure Development: Establishing the necessary infrastructure for the production, distribution, and bunkering of alternative fuels like ammonia and methanol requires significant investment and coordination among stakeholders.
• Regulatory and Safety Standards: Developing and implementing regulations and safety standards for new fuels and technologies are essential to ensure safe and effective adoption.

Potential biofuels implications
The 2030 target of 700 million gallons of SMF, if enacted, would represent a potential ~14% increase to U.S. biomass-based biodiesel consumption at current levels.

In the longer-term, the potential impact increases. According to the report’s projections, some 25% of all marine fuel will be biofuel by 2050 (some 2 billion gals, based on the EIA AEO marine fuel projection of ~8.1 million diesel-equivalent gals), equivalent to current U.S. biodiesel consumption.

There is the potential for this to increase further by several multiples if commercialization of other SMF’s such as clean ammonia and methanol and the corresponding vessels and infra-structure does not come through at the scale and pace anticipated by the report.

Conclusion
The Action Plan for Maritime Energy and Emissions Innovation sets out a bold and ambitious plan for decarbonizing the U.S. maritime sector, that is comparable to the Sustainable Aviation Fuels Grand Challenge published in 2021. While it is unlikely to proceed further under the current Trump presidency, it does set out a longer-term vison on the strategic options to decarbonise one of the world’s most important maritime sectors. As such, it has the potential to influence U.S. government thinking over the longer-term.

SMFs have a key role to play in this vision and, given the still significant technoeconomic challenges and uncertainties surrounding the commercialisation and scale up of fuels such as clean ammonia and e-methanol, the risk would appear to be to the upside for biofuels if the de-carbonisation ambition is to be achieved. Biofuels’ incumbency and advantages in handling, storage, and infrastructure are likely to be valued by a sector that is seeking decarbonisation options that are cost effective, safe, reliable, and robust.