Maritime Forecast to 2050 principal author Linda Sigrid Hammer shares her insights on what steps shipowners should take to develop their green fuels and technologies strategies
Shipping is under tremendous pressure from regulators, investors, charterers and society to decarbonise and reach net-zero emissions by 2050. To accomplish this tectonic shift, shipowners will need to take practical steps now to transition from conventional marine fuels to carbon-neutral and zero-carbon fuels. This will mean banking on the commercial availability of future fuels like green ammonia or green hydrogen, even though they don’t exist today as marine fuels.
“Shipowners are indeed faced with a complex carbon risk picture,” DNV principal consultant for maritime environment advisory and principal author of the report Maritime Forecast to 2050, Linda Sigrid Hammer, tells Marine Propulsion. “Uncertainties are linked to the availability of green fuels, but also to the development of technologies to use these fuels and to the development of regulations and other drivers.”
In short, the road to decarbonisation has lots of twists and turns and isn’t well lit. Fortunately, shipowners can use DNV’s fifth edition of Maritime Forecast to 2050 as a signpost. The report sets out the ambitious goal of distilling a dozen decarbonisation scenarios to guide shipowners on potential paths to zero emissions by forecasting the availability, uptake and pricing of alternative fuels and green technologies.
DNV’s report uses a greenhouse gas (GHG) pathway model to forecast the fuel mix and the CO2 emissions in the world fleet to 2050 under different decarbonisation scenarios.
“Our intention is to assist owners in identifying their own decarbonisation stairway – as we call it – to manage carbon risk. This decarbonisation stairway is a practical plan for how to stay under the required carbon projection trajectories,” says Ms Hammer. And, as she points out, shipowners will have to continually improve the performance of, and invest in, their ships to stay in compliance and remain commercially competitive.
“Shipowners are faced with a complex carbon-risk picture”
“Shipowners will need to gradually reduce the carbon intensity of their ships. Understanding the costs associated with the fuels and technologies needed to stay under the required carbon reduction trajectories is vital for them to stay competitive, as is knowing the technical design implications of the fuel choices they make to eliminate ‘showstoppers’ and reduce costs of potential conversions,” she says.
Ms Hammer says this will require factoring in fuel availability and basic measures at the newbuild stage to “accommodate for fuel flexibility … and to be prepared for several possible fuel transitions during the lifetime of the ship.” This will need to be factored into the planning of the 1,000 to 2,000 ships that are expected to be ordered annually up to 2030.
Using a techno-economic study for carbon-risk management can help in planning new ships, says Ms Hammer. This consists of two parts: the first is an assessment of the economic potential of the fuel and energy efficiency strategies over the lifetime of a ship meeting the carbon-reduction target trajectory; the second part is a structured review of the impact of the chosen fuel strategy on ship design. The results from this techno-economic study can be fed into the shipbuilding specification, and this framework is specifically designed to allow detailed assessments of fuel flexibility and fuel-ready solutions. Fuel-ready solutions indicate a ship that is prepared to be converted to a different fuel later in its lifetime. This means “planning for fuel flexibility and fuel-ready solutions that can ease the transition and minimise the risk of investing in stranded assets,” says Ms Hammer.
Preparing for EEXI, CII
IMO’s GHG Strategy is driving policy development for international shipping, with the Energy Efficiency Index for Existing Ships (EEXI) and Carbon Intensity Indicator (CII) regulations that take effect on 1 January 2023. What steps should shipowners take now to assess their existing fleet and future newbuild investments to meet these regulations?
“We have developed a three-step approach for this, building on the framework for managing carbon risk,” explains Ms Hammer. “The first step is to identify the baseline, setting the target for the GHG trajectory over the lifetime of the ship. What is the GHG performance of the ship, or fleet, today and how should they develop? The second step is to consider the relevant technologies and fuel strategies to meet the defined carbon-reduction trajectory. The third step is to develop an action plan under a defined target trajectory. This may involve several fuel transitions and potentially conversions over the lifetime of the ship. This same approach can be used for existing ships, but the possibilities for conversions are more limited than for newbuilds.” Peak annual investments in onboard technology could reach US$60Bn towards 2050.
Future fuel outlook
Ms Hammer says their models suggest a diverse fuel mix towards 2050, comprising both fossil fuels and low-carbon fuels, as various fossil fuels are gradually phased out. “There will be room for LNG, LPG, ammonia, hydrogen, methanol, and then bio-based and electro-based versions of those fuels,” she says. “And then it’s a matter of availability of the onboard technologies for use of these fuels. And what we see is that the technologies for ammonia and hydrogen will be available in four to eight years,” she adds.
“The combustion engine will continue to be the dominant energy converter in the fleet”
Some owners are opting to build ammonia-ready vessels now, which can be converted to burn the zero-carbon fuel when it becomes available. One of those is Höegh Autoliner, which has signed a letter of intent to build a series of multi-fuel, ammonia-ready car carriers. The Aurora Class multi-fuel MAN B&W engine can run on various biofuel and conventional fuels, including LNG. With minor modifications it can transition to use future zero-carbon fuels, including green ammonia. The first Aurora Class car carrier will be delivered by China Merchants Heavy Industry (Jiangsu) in 2024.
Technologies to operate on lower carbon intensity fossil fuels, such as LNG, LPG and methanol, are available now.
Ms Hammer expects the “combustion engine will continue to be the dominant energy converter in the fleet, but that marine fuel cells will be integrated into power systems as they have the potential to provide higher efficiency and thereby lower fuel consumption.”
Fuel choice will depend on availability, pricing, vessel type and operational area. Energy density is also a key consideration, notes Ms Hammer, “to maximise the space available for the transport of cargo.” Batteries and energy-efficiency measures like wind power, air lubrication systems and various hull and machinery measures will also be important, as well as the development of carbon capture.
There is no shortage of hurdles in the energy transition. “Because most of these new fuels have different properties, they will pose different safety challenges from those of conventional fuel oils. This gives new challenges for the complete ecosystem in the maritime industry,” she notes.
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