By Eirik Ovrum
Maritime Principal Consultant, DNV
Lead Author, Maritime Forecast to 2050

 

The decarbonization of shipping is a complex puzzle. Due to its nature, shipping is one of the world’s “hard to abate” sectors, which means that reducing emissions and contributing to stopping man-made global climate change requires ingenuity and out-of-the-box thinking.

The goals, at least, are clear. Following the conclusion of the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC 80) summit in 2023, the maritime industry has set its course toward full decarbonization “by or around” 2050, a 20 percent reduction in emissions by 2030, and a 70 percent reduction by 2040, all compared to 2008 levels.

These goals are, at best, highly ambitious, and, at worst, impossible. Nonetheless, the spirit of maritime exploration is alive and well, and a range of different technologies, fuels and operational strategies are already being explored across the industry.

A Roadmap for the Maritime Industry

At DNV, we are at the forefront of these efforts, summarized in the annual publication of our Maritime Forecast to 2050 report. In 2024, we released the eighth edition to continue to provide maritime stakeholders with a pragmatic assessment of the decarbonization road that lies ahead, helping them make the appropriate choices for their own fleet.

With every publication, the report provides an overview of the latest technological and regulatory developments in shipping. Both are dynamic elements that inform DNV’s forecasting models, demonstrating the different pathways to meet the IMO’s greenhouse gas (GHG) emissions targets.

Short Supply of Carbon-Neutral Fuels

Taking the longest view, full decarbonization of shipping will require the large-scale transition to carbon-neutral fuels. The scale of this task is difficult to exaggerate. Today, about 93 percent of the global fleet (in gross tonnage) is powered by conventional fossil fuel oil without onboard carbon capture. For full decarbonization, a brand new fleet, with the ability to be powered by alternative fuels, such as ammonia, hydrogen and methanol, or with the ability to capture carbon on board, needs to be constructed over the next 2.5 decades. The cost of constructing these vessels will be greater than for conventional vessels, and shipowners are understandably reluctant to commit to this based on an even greater issue, that of fuel supply.

Today, the supply of fuels such as ammonia, hydrogen and methanol is minuscule, with global supply chains, including bunkering infrastructure, almost nonexistent. Developing carbon-neutral versions of these fuels to fulfill shipping’s theoretical needs will require sustained, multibillion-dollar investment on a global scale over the next 25 years.

However, with demand uncertain, and clarity lacking around which will be the “winning” fuel, few fuel producers are reluctant to make this kind of commitment. Moreover, while some supply of these carbon-neutral fuels is available today, they are significantly more expensive than regular fuels, reducing their appeal even more for shipowners.

Energy Efficiency Plugs the Gap

Although the scale of the fuel transition seems almost insurmountable, a number of solutions—green shipping corridors; financial mechanisms, such as the Poseidon Principles, a global framework to integrate climate considerations into lending decisions; carbon pricing regulations—are being put in place to make the ground more favorable in the years ahead. Nonetheless, action is imperative today, and shipping needs to show a 20 percent reduction in GHG emissions within the next five years, so other avenues need to be explored. The most obvious of these is energy efficiency.

The latest Maritime Forecast to 2050 estimates that energy reductions of up to 16 percent can be achieved through a combination of operational and technical energy efficiency measures. This can start with instilling cultural changes throughout an organization. Encouraging crew members to seek efficiencies in their day-to-day operations has already been proven as a low-cost, risk-free way of achieving results, with some companies showing that this can deliver fuel and emissions savings of up to 5 percent.

Taking energy efficiency to the next level and reaching double-digit results requires technological solutions. Energy efficiency technologies such as wind-assisted propulsion systems, waste-heat recovery, and shaft generators, to name just a few, are already in use and have been proven to reduce emissions, with even greater potential in the future.

Other Technological Solutions Can Reduce Demand for Carbon-Neutral Fuels

Aside from energy efficiency measures, the new Maritime Forecast to 2050 report also demonstrates how a range of other technological solutions can contribute to a reduction in GHG emissions while reducing the dependence on carbon-neutral fuels.

Onboard carbon capture is a good place to start. Supported by sustainable and credible reception and storage schemes, this would enable the continued use of conventional fuels and technologies while contributing to emissions reductions. The technology required for this is developing quickly. However, there is not yet sufficient infrastructure developed to receive and store the carbon captured on board ships. Ideally, this would be done at major ports, and the Maritime Forecast to 2050 report explains how this could happen.

Digitalization is also crucial. Digital tools and systems are already unlocking operational efficiencies, for example, by facilitating speed and route optimization. Digitalization can also be used to show vessel performance, providing vital data on the impact of energy-saving measures and facilitating design of the next generation of energy-efficient ships.

Technology is developing quickly, and other solutions, such as shore power, batteries, fuel cells, and nuclear propulsion, are also examined in detail in the new report.

The Advantages of Pooling

While technology is developing quickly, the conditions for decarbonization need to be supported by progressive and goal-oriented regulations. A good example of this is the pooling mechanism, which forms part of the FuelEU Maritime regulation, effective January 2025.

Pooling provides shipowners with the option to attain compliance across a fleet of ships—even belonging to different companies—as a means of meeting stricter well-to-wake requirements imposed under the new regulation. This means that in a pool, a vessel with compliance surplus can sell excess emission units to several vessels with compliance deficits, compensating for the extra costs associated with investing and running an over-compliant vessel on costly carbon-neutral fuels.

Using a detailed simulation of an e-methanol vessel, the new Maritime Forecast to 2050 report shows how pooling can drive fleet-wide strategies, reduce investment risk, and help to accelerate the uptake of new fuels and technologies.

Possible Futures

With so many options on the table, it is understandably difficult for shipowners to know what the best solutions are for them and where to invest their money. Building on and updating our GHG Pathway model, the report presents four exploratory scenarios for achieving decarbonization: biofuels and onboard carbon capture, methanol, ammonia, and hydrogen. The report investigates the conditions under which the uptake of these different fuel types and technologies will accelerate toward 2050.

No single scenario dominates, and it is likely that the future energy mix will comprise a diversity of fuels and technologies. However the future unfolds, the cost of decarbonization will be high, including a potential doubling of the cost of transport for container shipping by 2050, compared to a business-as-usual scenario. This will have to be passed along the value chain, bringing the realities of maritime decarbonization all the way to the households of end-consumers.

Shipping’s Greatest Challenge

Decarbonization is probably the greatest challenge ever facing the maritime industry. Goals have been set, but the road ahead is full of uncertainty, and there is no guarantee of success.

Nonetheless, the pioneering spirit of shipping is alive and well, and no stone will be left unturned as we embark on this great transition.

Learn more here.