DNV: competition for alt fuel to pose challenge in key decade

Increasing regulatory pressure to decarbonise, including stricter targets set by the International Maritime Organisation (IMO) this July, means the shipping industry now needs to achieve a 20% reduction in emissions by 2030 and net-zero emissions by or around 2050.

To meet the anticipated demand of 17 million tonnes of oil equivalent (Mtoe) annually by 2030, the maritime sector needs to access a staggering 30-40% of the projected worldwide carbon-neutral fuel supply.

Eirik Ovrum noted that demand for carbon-neutral fuels will not just be limited to competing modes of transportation, such as aviation or heavy haul transportation, but also from other industries outside mobility entirely. Ammonia is also widely used in the production of fertilisers, while methanol is an importance feedstock for the chemicals industry. 

The Motorship notes that the annual report includes a comprehensive list of alternative fuel production projects from the initial FID stage through to groundbreaking and project delivery. The report notes that a significant proportion of the 2,400 projects in progress around the world are likely to face delays, amid evolving investment conditions, and the emergence of cost-curve considerations.  

Looking beyond alt fuels

Shipowners must therefore focus beyond fuels, in particular on what can be done now to achieve energy efficiencies and carbon emission reductions. 

Knut Ørbeck-Nilssen, CEO DNV Maritime, said: “The 2020s marks the decisive decade for shipping. Securing greener fuel supply is critical. However, focusing on fuels alone can distract us from making an impact this decade and ambitious future declarations are not good enough. What we need is tangible actions that will reduce emissions. Energy efficiency measures can deliver decarbonisation results now and towards 2030.”

The Maritime Forecast to 2050 presents an updated look on a range of regulations and drivers for the decarbonisation of shipping, the most important being new IMO regulations, the inclusion of shipping in the European Union’s (EU) Emissions Trading Scheme and incoming well-to-wake requirements. These regulations will increase the operational cost of using carbon fuels, incentivising shipowners to put plans in place today to reduce their carbon output.

“Our latest report outlines several energy efficiency measures that can deliver decarbonisation results now. It emphasises the need for the maritime sector to adopt a holistic approach to ensure a strong evolution of regulations and technologies, as well as long-term security of fuel supply,” said Eirik Ovrum, Principal Consultant in DNV Maritime, and Lead Author of the Maritime Forecast.

To overcome decarbonisation challenges, the sector can adopt operational energy efficiency measures such as air lubrication systems and wind assisted propulsion. The latter has already been installed on 28 large vessels, delivering fuel savings of between 5-9% to date. The potential when retrofitted on existing ships can reach 25%.

Other findings include that a fuel technology transition is already underway, with half the ordered tonnage capable of using liquefied natural gas (LNG), liquefied petroleum gas (LPG), or methanol in dual-fuel engines, compared to one third of the tonnage on order last year. For ships in operation, 6.5% of tonnage can now operate on alternative fuels, compared to 5.5% last year. The uptake of methanol and LPG is also starting to show in the statistics together with the first hydrogen-fuelled newbuilds. There are currently several ongoing demonstration projects for ammonia-fuelled ships, and a growing pipeline of ammonia-fuelled ships soon to hit the order book.