Coupled with increased regulatory and societal pressures, shipowners are faced with a minefield of uncertainty in choosing fuels and technology that will prove both commercially viable and environmentally sound
Releasing its latest Maritime Forecast to 2050, classification society DNV framed the report around the idea of shipowners following a ’decarbonisation stairway’ that is unique to their business and designed to manage commercial risk while lowering carbon footprints.
“Choosing the right fuel today for operations tomorrow is a daunting task that all owners must face up to,” DNV Maritime chief executive Knut Ørbeck-Nilssen said.
“The business environment is changing in line with the natural one, leading not just to increased regulatory requirements, but also to new cargo-owner and consumer expectations and more rigorous demands from capital investors and institutions. A misstep today in newbuild fuel strategies can have damaging consequences for businesses and assets in the future," he said.
The report maps the changing regulatory landscape and provides a status update on technology and alternative fuels linked to the decarbonisation stairway model.
Looking at financing of green onboard investments, DNV noted that poorly performing companies risk being left behind by investors and being seen as less attractive prospects on the charter market. The decarbonisation stairway serves to show how owners can adapt to comply with future greenhouse gas emissions trajectories, as environmental, social and corporate governance (ESG) investing becomes more important to vessel financing.
DNV Maritime principal consultant and the report’s lead author Linda Sigrid Hammer commented, “with between 1,000 and 2,000 ships expected to be ordered annually through 2030, there’s a real need for informed decisions that consider a diverse array of factors; from cost, to fuel storage and propulsion, through to flexibility in design, strategic approach, and fuel ready solutions".
DNV’s report uses a case study featuring a Newcastlemax bulk carrier, to evaluate and compare energy-efficient design and fuel options. The case study considers conventional and modified ship designs, and fuel choices ranging from LNG to ammonia.
DNV said its findings indicate the maritime energy transition is gaining momentum, with around 12% of newbuilds currently in orderbooks having been ordered with alternative fuel systems. Despite this, only 1% of ships currently in operation use alternative fuels, with the huge majority plying shortsea routes.
In August 2021, container giant Maersk ordered a series of South Korea-built CO2 neutral methanol-fuelled container vessels, with an option to scale it to a dozen.
DNV forecasts that total capex for onboard scaling technology to satisfy IMO’s decarbonisation goals will range from US$250-800Bn (dependent on fleet size) between 2020 and 2050.
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