Tracking the fuel transition

Shipping is being subject to the classic ’carrot and stick’ in the strive towards decarbonisation. The sticks are in the form of IMO’s agreement on 2030 policies EU and ETS, Sea Cargo Charter, China carbon net zero by 2060 and the potential impact of the new US administration signing the Paris Climate Accord.

There is very little in the way of carrots. CRS notes that the timing, technology choice and financing to achieve shipping’s GHG emissions goals could be in the region of US$1Tn.

On the positive side, CRS notes there is traction evident in the orderbook of alternative fuels gaining ground, with 3.5% of the fleet and 27% of the orderbook by tonnage classed as having this option. Outside of LNG carriers, contracted LNG dual-fuel vessels number 227, actually above the current trading fleet of 202.

Tankers lead the way, with 34 LNG dual-fuel tankers in the fleet and 72 dual-fuel tankers on the orderbook. CRS notes that shoreside support is growing, with 124 ports now having LNG bunkering. Methanol is also a strong contender, with Waterfront Shipping adding six more methanol-powered tankers to the orderbook.

The CRS analysis includes energy saving technologies and its tracking shows take up among the fleet of items such as exhaust gas economisers and propeller ducts. CRS feels these short-term measures will contribute to the renewal decision making process, especially for the non-eco tonnage built during the 2008-2012 newbuilding boom.

An interesting point is made regarding the tiering of the fleet that is taking place. The eco vessel with an electronic main engine represents around 24% of the current fleet.

Another tier is the 20% fitted with scrubbers, to which could be added the 45% of the current fleet CRS has tracked as being fitted with ballast water treatment systems.

The data from CRS highlights that first movers are taking the first steps to an unprecedented investment and fleet renewal programme and CRS will continue to track the changes as the new technology portion of the shipping fleet grows in significance.

Vessel performance and optimisation is the focus of Vessel Optimisation Webinar Week 7-11 December 2020.