Can the International Shipping Industry be Net Zero Emissions by 2050

Ship emissions by fuel consumption

According to Wood Mackenzie, in the aftermath of COP26, the global shipping sector finds itself under increasing pressure to expedite its efforts in curbing greenhouse gas (GHG) emissions. The recently adopted 2023 International Maritime Organisation (IMO) Strategy on Reduction of GHG Emissions has set forth ambitious objectives, aiming to attain net-zero emissions for the maritime industry by 2050. However, the road to this goal is laden with challenges and uncertainties.

The existing IMO strategy, established at MEPC 72 in April 2018, already posed a significant challenge for the sector. It outlined key targets, which included halving total greenhouse gas emissions from international shipping by 2050 and reducing carbon intensity by 70% compared to a 2008 baseline, with intermediate targets to decrease carbon intensity by at least 40% by 2030.

At MEPC 76 in June 2021, the IMO introduced the Energy Efficiency Existing Ship Index (EEXI), which came into effect at the beginning of the current year. It was accompanied by an operational carbon intensity indicator (CII) that links carbon emissions to cargo volume and distance traveled. In conjunction with the Energy Efficiency Design Index (EEDI) for newly constructed vessels, these measures put the sector on a trajectory toward achieving the carbon intensity targets set for 2030 and 2050.

However, as global maritime trade is expected to surge by 17% by 2030 and continue its growth, the task of reducing overall emissions becomes even more formidable. Current projections anticipate that overall emissions will continue to rise until 2027 and then decrease only gradually over the following two decades.

Substantial changes were set in motion at MEPC 77, held immediately after the COP26 climate conference in November 2021. Recognizing the need to intensify their efforts, the IMO adopted a new strategy at the MEPC 80 session in July 2023, which requires the sector to reach net-zero emissions by 2050.

The implications for global shipping are profound. To achieve this ambitious climate goal, the industry must embrace a range of technologies for designing new ships and retrofitting existing vessels, which will make them more fuel-efficient and reduce emissions. These include hull shape optimization, smaller engines, wind power, contra-rotating propulsion, waste heat recovery, and air cushions. More costly technologies such as low- and zero-carbon fuels and even solar power will also need to become integral to the industry. The development of mid- and long-term greenhouse gas reduction measures will be pivotal in realizing this transition.

Marine fuels are at the heart of this transformation. Current forecasts anticipate a modest 4% growth in global marine fuel sales between now and 2030 before declining as energy efficiency measures curtail fuel consumption. Marine LNG is expected to become the primary source of growth through 2040, with synthetic e-fuels gaining prominence thereafter, thanks to the increasing availability and reduced cost of green hydrogen.

Yet, achieving the IMO’s 2050 targets necessitates a much swifter transition to low- and zero-carbon fuels. Biofuels, including fatty acid methyl ester (FAME) and hydrotreated vegetable oil (HVO), could play a role in decarbonizing shipping, but competition for biofuels in other sectors, particularly aviation, poses challenges. Second-generation cellulosic biofuels derived from waste biomass could potentially provide a new source of supply in the long term, but investment prospects are currently limited.

Other alternative fuels, such as e-methanol and e-ammonia, synthesized from green hydrogen through electrolysis of water using renewable energy sources, offer promise. Among these, e-methanol is considered the most market-ready.

For a more detailed exploration of low-carbon fuels and comprehensive forecasts on global marine bunker volumes by fuel type and marine fuel sales up to 2050, we encourage you to download a complimentary extract from their report.

Source: Wood Mackenzie, Hellenic Shipping News

Source Hellenic Shipping News

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