All tomorrow's pathways: maritime's energy transition
The Naval Architect: October 2020
Perfect is the enemy of good, believes DNV GL CEO of maritime, Knut Ørbeck-Nilssen. “We are facing a situation where idealism and localism spell trouble for shipping... Shipping requires international regulations, however we do see that local and regional lawmakers are increasingly demonstrating impatience and distrust with the IMO’s lack of progress.”
Ørbeck-Nilssen’s fear is that the road to decarbonisation will be compromised by a patchwork of localised regulation, as it has with other issues such as biofouling and ballast water discharge. Earlier in September, the European Parliament voted to include greenhouse gas (GHG) emissions from ships over 5,000gt in the emissions trading system, subject to approval by EU member states. It’s a move which threatens to undermine the International Chamber of Shipping’s initiative to create a US$5 billion R&D fund based on a mandatory contribution of US$2 per metric tonne of marine fuel that would be applicable across the world.
In order to achieve IMO’s target of an overall 50% reduction in total GHG emissions by 2050 it’s commonly accepted that the hard work must be done over the next decade. That entails a massive scale-up of new technologies and better fuel alternatives than is currently being realised. DNV GL anticipates that the regulations and incentives being drawn up to achieve this will begin to impact by 2023, with all the implications to costs, asset values and earning capacity which that entails.
Maritime Forecast to 2050
Published annually since 2017, the ‘Maritime Forecast to 2050: Energy Transition Outlook’ is intended as a tool to help shipowners navigate the technological, regulatory and market uncertainty of decarbonisation. It encompasses a library of 30 different scenarios for the evolution of the global fleet between now and the middle of this century, with different permutations of fuel types and technology systems. These are derived from three primary energy sources: electrofuels (fuels derived from renewable electricity), sustainably- sourced biofuels, and traditional fossil fuels utilising carbon capture and storage.
“Having 30 scenarios has allowed us to understand which of these drivers are more important and also the sensitivity of each and how much they impact on the choice of technology and fuel,” explains Tore Longva, maritime principal consultant at DNV GL and the publication’s lead author.
Each scenario belongs to one of three decarbonisation pathways: a reference one in which no further regulations are imposed on shipping, another in which shipping achieves the 50% targets set out by IMO in 2018’s Initial GHG strategy, and an ambitious pathway where shipping becomes fully decarbonised by 2040.
Longva says: “We do see a lot of pressure with the European Parliament and society in general pressing for decarbonisation. IMO is going to review its strategy in 2023 and then every three years after that. The EU is probably going to press for harder regulations. [The 2040 pathway] is partly there as a reference as the most radical but it could be 2050 or anything in between.”
Continuing the theme, there are also three key drivers, or uncertainties: the extremity of regulatory policy measures (e.g. carbon pricing), the cost of fuel and energy, and how seaborne trade demand may change over the next 30 years. This year’s study explores in greater depth the theme of fuel flexibility and foresees significant future roles for ammonia and methanol, alongside bio- and synthetic LNG.
At present, less than 0.5% of the current global fleet is using alternative fuels (including LNG) but that figure rises steeply to almost 10% when ships on order are factored in, according to data on DNV GL’s Alternative Fuels Insight platform. These figures are based on the total number of vessels, taking into account smaller craft, but Longva points out that these are increasingly serving as a test bed for new technologies that can eventually be upscaled.