Global Shipping Greening Speed Up

Although there are still many uncertainties in the green fuel supply market, overall, major shipowners have significantly accelerated their own emissions reduction pace, and the green development of the global maritime industry has accelerated.

 

Since the International Maritime Organization proposed to achieve net zero greenhouse gas emissions by 2050, orders for dual-fuel ships have grown rapidly worldwide. Although there are still many uncertainties in the green fuel supply market, overall, major shipowners have significantly accelerated their own emissions reduction pace, and the green development of the global maritime industry has accelerated.

 

 

Danish shipping giant Maersk has launched its latest dual-fuel vessel in Singapore that uses fossil fuels while switching to green methanol, another step in the company's push to reduce greenhouse gas emissions from the maritime industry.

 

According to Maersk Group public information, the latest launch of the dual-fuel vessel is one of the 18 large methanol fuel vessels planned by the company, which is expected to be delivered within this year and next. By using green methanol as fuel, the ship can reduce CO2 emissions by about 280 tonnes per day. In the view of Maersk Group's president of the Asia-Pacific region, Baidile, the dual-fuel ship represents the latest technological means available to decarbonize the maritime industry.

 

In July 2023, the IMO published its latest emission reduction strategy, proposing to peak greenhouse gas emissions from the maritime industry as soon as possible, and to achieve net zero greenhouse gas emissions around 2050, taking into account different national conditions. Industry estimates show that the global maritime industry consumes about 2.5 billion barrels of heavy fuel oil a year, and it would cost more than $100 billion a year to meet the decarbonisation targets.

 

Under the pressure of decarbonization, dual-fuel vessels that can use low-carbon fuels have become the latest "grasping hand" of the maritime industry. According to industry estimates, at present, the global shipping industry has about 170 orders for dual-fuel ships that can use methanol, and major enterprise plans show that this scale is continuing to expand.

 

According to market research institute Clarkson research statistics, in terms of ship tonnage, alternative fuel in the new shipbuilding hand orders accounted for 50%, alternative fuel ships are gradually becoming the mainstream of new ships. Among them, from the perspective of ship type, the alternative fuel power of gas carriers and automobile carriers is close to 100%, and there are relatively many alternative fuel schemes in the field of container ships.

 

 

 

From the major shipowners new dual-fuel ship orders, green methanol is only one of the alternative fuels, liquefied natural gas (LNG), ammonia fuel and hydrogen fuel have gained a lot of attention.

 

LNG, despite being a fossil fuel, can reduce greenhouse gas emissions by 23% compared to conventional fossil fuels. As of early December, Maersk Group has signed construction agreements with three shipyards in China and South Korea for 20 LNG dual-fuel powered container ships. Globally, DNV estimates show that more than 300 LNG dual-fuel ships are planned or have been ordered worldwide.

 

At the same time, hydrogen fuel and ammonia fuel ships with more low-carbon characteristics have also accelerated their "breakthrough" in the past two years. In December, French shipping group Sogestran announced the launch of its first inland hydrogen-fueled vessel, with an estimated capacity of 400 tons, which will carry logistics on the Seine River.

 

In the view of PASCAL Girardt, CEO of Sogestran Group, although the hydrogen fuel industry chain is not yet fully mature, innovative design is still accelerating the decarbonization of various industries, and eventually the hydrogen fuel field will build a strong value chain.
In October this year, COSCO Shipping Energy and COSCO Shipping Heavy Industry announced that the ammonia bifuel ammonia /LPG transport ship design scheme developed by the three international classification societies recognized certificates, becoming the latest ammonia fuel application case in the world.

 

"There is no single fuel or technology that completely dominates the current Marine market," Reuters quoted DNV Marine chief executive Nelson as saying. The industry generally believes that the ship orders signed by major shipowners show that there are still many uncertainties in the development of Marine green fuel, and in the next few decades, the supply situation and price cost will become an important factor for green fuel to compete for the Marine fuel market.

 

 

According to the International Renewable Energy Agency data, the proportion of maritime transport in international trade is about 80%, the traditional Marine fuel is mostly diesel and other fossil fuels, not only high greenhouse gas emissions, but also may bring sulfur pollutants, overall, the Marine industry greenhouse gas emissions accounted for about 3% of global emissions, the Marine industry is also regarded as one of the most difficult areas of decarbonization.

 

Although the current trend of the Marine industry to shift to green fuels has been clear, it cannot be ignored that the price of alternative fuels, which is about twice the cost of traditional fossil fuels, also brings challenges to the green transformation of the Marine industry.
Badiller said: "Just like other green and low-carbon technologies, whether it is photovoltaic modules or electric vehicles, scale and commercial development is essential. To this end, government departments and industry organizations should formulate relevant regulations to raise the price of highly polluting fuels and promote the development of low-carbon fuels."

 

In this regard, the International Renewable Energy Agency also holds a similar view, in order to enable renewable methanol to be put into commercial use at a considerable rate, more regulatory support is needed, such as pushing up carbon prices or strengthening related product price subsidies.

 

However, alternative fuels are not the only path to green and low-carbon development for the maritime industry. The IMO's decarbonisation strategy also clearly requires that improving the energy efficiency design of new ships is also a powerful way to reduce their carbon intensity.

 

In fact, the installation of energy-saving devices during the construction phase has also become a "standard" in new shipbuilding. Clarkson data shows that more than half of the ships built since 2016 have been equipped with energy saving devices, and the majority of ships delivered globally have achieved more than one type of energy saving device installed so far this year.