Liquid Terminals’ Role in a Growing International Market for Low-Carbon Fuels
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Kathryn Clay
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Liquid Terminals’ Role in a Growing International Market for Low-Carbon Fuels

As the energy transition continues on a global scale, the demand for new and increased storage and transportation of liquid fuels in North America is likely to both grow and shift. Energy and fuel demand are projected to increase through 2050 and, due to the nature of biofuels, hydrogen and other low-carbon fuels, there is a predicted change in global markets with new trade dynamics and roles for different regions.

The North American market is positioning itself to continue being the central element of global trade in low-carbon fuels. In 2022 the United States and Japan announced their Clean Energy Partnership (JUCEP) which seeks to encourage clean energy trade, including that of clean hydrogen and ammonia. Additionally, in March of 2023 Japan published a new biofuels policy will allow the United States to capture up to 100 percent of Japan’s on-road ethanol market. The agreement operates under the Sophisticated Methods of Energy Supply Structure Act, where exports of U.S. ethanol could increase by over 80 million gallons (about 302832800 L) annually, representing an additional $150-200 million in exports each year. Additionally, there is growing demand for US ethanol, which is being applied across a wide variety of industrial uses in developing countries including use as disinfectants, solvents, carriers in foods and cosmetics, commercial deicers, pharmaceuticals, and organic chemical manufacturing. This is likely to drive increased trade of liquid fuels out of the United States and create demand for services provided by liquid terminal operators.

Outside of the United States, there is particular interest in the production of new fuels in Africa and South America which have high demand in North America, Europe and parts of Asia. Just one year ago, Kenya, South Africa, Namibia, Egypt, Morocco, and Mauritania launched the Africa Green Hydrogen Alliance, aiming to ramp up hydrogen production in the continent. In June of this year, the Republic of Namibia and the Namibian Ports Authority signed an MOU with several Dutch companies to develop a vertically integrated green hydrogen project. In a similar move, last week South Africa selected three firms to submit proposals to develop Boegoe Baai Port, a $2.8 billion port project aimed at transporting green hydrogen. With this production, IRENA has predicted new trade routes, which will require infrastructure development for their implementation.



A similar situation has arisen in Central and South America, which have become leaders in biofuels, currently producing nearly 25% of the world’s supply.

This has had major effects on employment within these countries as Brazil and Colombia have the first and fourth highest number of jobs in biofuels in the world and are investing heavily and developing the sector. With continued growth in demand for SAF and other biofuel products in developed markets, these products will require substantial infrastructure for their commercialization. These market shifts will be fundamental to ILTA’s members’ business and their role in the energy transition.

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