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Driven by EU regulations and IMO goals, the maritime industry is maintaining course for decarbonization but making slow headway towards an alternative-fuelled fleet. DNV’s latest Maritime Forecast to 2050 report confirms our previous finding that carbon-neutral fuels will remain expensive and in limited supply for the near future. It recommends more realistic decarbonization measures for shipping over the next decade.
“Maritime’s strategic focus for decarbonization in the short to medium term should be on operational and technical solutions to improve energy efficiency and otherwise reduce greenhouse gas emissions,” says Eirik Ovrum, Maritime Principal Consultant at DNV and lead author of the report. “Maritime Forecast to 2050 evaluates the decarbonization challenges and the toolbox of technologies for designing and retrofitting ships to future-proof them.”
Shipping cannot meet 2030 targets by using carbon-neutral fuels
The destination and waypoints for shipping’s energy transition are set by the IMO goals: a 20% emissions reduction by 2030, a 70% reduction by 2040, and full-scale decarbonization by or around 2050, all compared with 2008 levels.
Adding insight into how much carbon-neutral fuels can drive the transition to 2030 and beyond, Maritime Forecast to 2050 assesses their existing and planned production. Factoring in the probability of plans becoming reality, it estimates potential “High” and “Low” levels of fuel output for each year.
Estimated supply of carbon-neutral fuels to all sectors
The report estimates the cumulative capacity of ongoing or announced carbon-neutral fuel production capacities for 2030 to be 44 to 63 million tonnes of oil equivalent (Mtoe). Maritime demand in 2030 is forecasted at 7 to 48 Mtoe. Depending on the actual demands, shipping would need 10 to 100% of the actual available carbon-neutral fuels to reach IMO targets.
“'But our modelling results show it will be tough for shipping to source its needs if production follows the ‘Low’ trajectory. Even if production is ‘High’, other decarbonizing industries such as aviation and road transport will compete for these fuels.”
A role for on-board carbon capture
On-board carbon capture (OCC) is attracting interest because it could delay the need for carbon-neutral fuels by removing carbon dioxide (CO2) from conventional fuels and technologies.
OCC could be technically and economically feasible depending on carbon pricing and the availability of value chains and infrastructure for carbon use or permanent storage, a recent DNV white paper concluded.
The scarcity and high cost of carbon-neutral fuels could potentially support a stronger business case for OCC.
On-board carbon capture is a longer-term play
Maritime Forecast to 2050 assesses the value chain required and presents the status of and outlook for carbon storage, suggesting how OCC could become viable for vessels on busy shipping routes.
Based on “High” and “Low” trajectories of CO2 storage capacity for all industries and purposes excluding enhanced oil recovery, the report sees 47 to 67 MtCO2 capacity being available in 2030 compared with its estimated storage demand of 4 to 76 MtCO2 from shipping.
‘‘That said, out of 96 planned projects for dedicated CO2 storage, less than ten have reached final investment stage, and most are still concepts,” Ovrum says. “The uncertainties weigh against installing OCC on ships immediately, but in our exploratory scenarios for achieving decarbonization goals, OCC emerges as an important technology for greenhouse gas reduction after 2030.”
Estimated global CO2 storage capacity(excluding enhanced oil recovery)
Maritime clearly needs to work with developers to secure carbon-neutral fuel supply and CO2 storage to maximize the longer-term potential of these technologies for decarbonizing shipping.
However, the inescapable message is that energy-efficiency measures are essential for achieving fuel and emissions reductions to at least meet the earlier IMO 2030 targets and ensure profitability into the 2030s and 2040s.
Buying into energy efficiency for sustained competitiveness
Two thirds of the energy used to produce propulsion is lost.
Maritime Forecast to 2050 outlines options to reduce these losses through energy efficiency providing cost-efficient predictable pathways to emissions reduction. It estimates that operational and technical energy-efficiency measures can reduce fuel consumption by 4% to 16% by 2030, contributing to emissions reduction.
“Energy efficiency provides cost-efficient, predictable pathways to emissions reduction. The business cases for energy-saving technologies may now be better when evaluated against the cost of alternative fuels. Energy efficiency can give shipowners a competitive edge to operate profitably into the 2030s and 2040s,” Ovrum comments.
Maritime Forecast to 2050 finds 72 waste heat recovery systems on order, twice the number currently installed. Some 166 air lubrication systems are operating today, with 280 on order for newbuilds. Around 90 large vessels could have wind-assisted propulsion systems by 2025, nearly triple the tally of 31 at the start of 2024.
Shore power versus electrofuels
Around 7% of ships’ energy consumption is in port. The resultant emissions can be abated using power from shore. The degree of abatement depends on the carbon footprint of the local electricity supply – is it from renewables such as wind or solar, for example?
Maritime Forecast to 2050 compares energy losses from direct use of shore power and when producing electricity from on-board generators running on fossil fuels or the electrofuel e-ammonia. The energy losses are used to calculate total greenhouse gas (GHG) intensity per usable energy unit. The calculations consider power-grid GHG intensity for different countries and regions, and from coal-fired power generation.
One key finding is that the well-to-wake (WtW) emissions from on-board power production in a marine gas oil-fuelled generator set exceed many countries’ average GHG intensity from their power grids. “Consequently, using shore power can lead to efficient WtW emissions reductions,” Ovrum comments. “Another finding is that to positively affect the vessel’s GHG emissions, electrofuels must be produced using electricity with very low GHG intensity.”
Shorter voyages open door to recharging ship batteries in port
More than 900 ships are operating with batteries for hybrid power systems or that can be charged by power from shore, according to DNV’s Alternative Fuels Insight (AFI).
Maritime Forecast to 2050 reviews what influences investment in such on-board battery systems. For example, a ship making many short-duration voyages will have more chances to charge batteries in port than one sailing longer voyages.
Looking at ships above 400 GT in 2023, it selects those using 80% of their fuel (when out of port) on short voyages, which would allow frequent battery-charging and for batteries to cover “a substantial amount” of a ship’s annual energy needs. The Forecast then evaluates how much fuel is consumed on these short voyages.
Evaluating the potential for plug-in hybridization
The 4,000 ships using 80% of their voyage energy consumption on trips shorter than 24 hours consume 6 Mt of oil equivalent per year in energy while sailing on these short trips, equivalent to 2.4% of the world fleet energy use.
The report finds that increasing voyage duration to 72 hours results in 8,000 ships using 80% or more of their voyage energy on short voyages – 6.2% of world fleet energy use.
“We conclude that the potential for plug-in hybridization can be boosted by modifying current operational patterns or by building vessels specifically for shorter voyages,” Ovrum comments. “In addition, better battery and charging technology can improve the energy efficiency of on-board power systems based on internal combustion engines. Greater efficiency in turn boosts the business case for investing in on-board batteries for plug-in hybridization.”
Can nuclear propulsion support ship decarbonization?
Building on a case study in last year’s edition, this year’s report updates and elaborates on factors relevant to answering this question.
It discusses whether small modular reactors could be widely used in the global merchant fleet, potentially creating opportunities for standardization and joint development in technology choice, regulation and safety follow-up for onshore reactors.
“If commercial, technical and political barriers can be overcome, there could be an opportunity for a nuclear reactor programme dedicated to shipping to accelerate the development of nuclear power overall,” Ovrum suggests.
How digitalization drives energy efficiency
Maritime Forecast to 2050 extensively analyses how digitalization can enable operational efficiency, smoothed contractual arrangements, and facilitate reliable, flexible, dynamic emissions reporting.
Recent advancements in digital tools like AI, machine learning, IoT and computer simulations have greatly improved and facilitated the reduction of the carbon footprint of shipping operations. These technologies fall into four categories: sensing, enabling, data handling and decision-making. When interacting, these technologies can help the shipping industry to fully leverage digitalization for better efficiency and sustainability.
Advanced simulation and optimization models can help design next-generation energy-efficient ships. Real-time data can facilitate truly integrated maritime networks: the container subsector could cut energy use by up to 14.2% by coordinating just-in-time arrivals, according to an IMO study.
Digitalization can make vessel performance more transparent, showing seafarers how they can directly impact decarbonization. Green and digital shipping corridor projects with complete logistics chains could pilot scalable optimization solutions enabled by digital tools.
Trust is the key to effective digitalization
Examples in the report emphasize how emissions reporting, new contractual arrangements and regulatory mechanisms such as pooling and book and claim depend on transparent, reliable data backed up by a trusted source.
“Exploiting all the decarbonization possibilities from digitalization requires data quality and reliability to create trust. Digital tools like DNV’s Emissions Connect can help to build that trust across shipping,” Ovrum says.
Paying the price for decarbonization
Beyond the fuels, technologies and operational measures covered, Maritime Forecast to 2050 stresses that successful maritime decarbonization requires progressive, goal-orientated regulatory frameworks.
This is highlighted by modelling the impact of regulations such as FuelEU Maritime’s pooling mechanism, which will support a switch to fleet-wide fuel strategies and de-risk investing in alternative-fuelled vessels. This research will be reported in a forthcoming Maritime Impact article.
“Smart decision-making and strategic investments are needed today to lay the foundations for future emissions reductions. Using an updated version of our GHG Pathway Model, Maritime Forecast to 2050 pragmatically assesses the options to assist maritime stakeholders in to unlock the decarbonization code,” Ovrum conclude