Amazon and IKEA Lead Zero Emissions Initiative

By Lisa Baertlein

(Reuters) – Amazon.com (NASDAQ:AMZN) and IKEA, along with about three dozen other companies reliant on ocean freight, will invite shipping firms for the first time to bid on a contract in January to transport their cargo using vessels powered by near-zero emissions e-fuels like e-methanol.

The group, known as the Zero Emissions Maritime Buyers Alliance, aims to leverage the combined influence of its members, each with their own climate objectives, to stimulate demand for e-fuels produced from renewable electricity and carbon dioxide, which are currently in short supply.

The alliance's goal is to expedite the shipping industry's transition toward net-zero greenhouse gas (GHG) emissions by 2050, despite indications that U.S. President-elect Donald Trump may withdraw from global climate commitments.

The global shipping fleet facilitates over 80% of global trade and is responsible for approximately 3% of the world's GHG emissions. According to the alliance, e-fuels are essential for decarbonizing ocean shipping, given their long-term competitive potential against fossil fuels in terms of cost and availability.

"This is how you get on path and on track to being net-zero," stated Carl Berger, a member of the alliance and leader of sustainability and export operations for Amazon Global Logistics.

Contracts for e-fuel transport will span three to five years, with operations projected to commence in 2027. The cargo transported under the agreement is expected to be equivalent to at least 1.4 million 20-foot containers shipped from Shanghai to Los Angeles, allowing members to reduce approximately 470,000 metric tons of GHG emissions.

Carriers like Maersk, Evergreen, and Ocean Network Express (ONE) are in the process of ordering e-methanol-capable ships and securing fuel supplies.

While alliance members anticipate that their joint efforts will bring e-fuel prices down, it is expected they will pay a currently undisclosed premium due to the higher costs compared to fossil fuels. "Once that market gets going, we'll start to see those costs come down," stated alliance CEO Ingrid Irigoyen regarding e-fuel.