The report’s authors estimate that decarbonising the shipping sector will lead to a significant increase in costs. By 2050, maritime transport costs are projected to rise by 69-75% for bulk carriers, 70-86% for tankers, and 91-112% for container transport. The authors make it clear that these costs will likely be passed on to end users.
Despite these challenges, the full decarbonisation of maritime transport is still far off. DNV experts estimate that by 2030, the sector’s demand for alternative fuels could range from 9 to 55 Mtoe (megatonnes of oil equivalent), depending on improvements in energy efficiency. However, global production of alternative fuels in 2024 is estimated to be between 44 and 62 Mtoe, making it virtually impossible for maritime transport to source adequate amounts of these fuels.
Decarbonisation at sea is still in its infancy
As of June 2024, only 7.4% of ships operating globally (by gross tonnage) use alternative fuels to power their main engines. The situation is slightly better with new ship orders: DNV analysis shows that 49.5% of the gross tonnage ordered will run on alternative fuels. Last year, these figures were 6.5% and 51.3%, respectively, indicating a small increase in current fleet tonnage using alternative fuels but a slight decrease in future tonnage.
When looking at the number of ships rather than tonnage, the picture shifts dramatically. Only 2% of the current fleet runs on alternative fuels, while 27% of vessels on order are expected to do so. This means that 98% of ships at sea and 73% of ships on order still rely on conventional fuels.
Alternative, but…
The report emphasises that true decarbonisation is progressing very slowly. Even among vessels using alternative propulsion, the most common choice is a less carbon-intensive hydrocarbon fuel, but it is still a fossil fuel.
Dual-fuel systems are becoming more common in ocean freight, with LNG (liquefied natural gas) often used as the second fuel. However, as the report notes, LNG is still a fossil fuel. According to DNV, 30% of the global fleet is responsible for 80% of CO2 emissions.
On a more positive note, the report highlights an increase in orders for ships powered by methanol and LPG, as well as growing interest in ammonia as a future fuel.
“Many in the industry are still waiting to see what will happen, but now is the time for leaders across the industry to take action. This means making smart decisions now that can accelerate the maritime green transition,” said Knut Ørbeck-Nilssen, CEO Maritime at DNV, quoted in the report.
Methanol for container ships
There are currently 2,357 vessels at sea powered by alternative fuels. Of these, more than half (1,239) run on LNG, which, as noted, is not a true alternative. Nearly 1,000 vessels are electric or hybrid (mainly ferries). As of today, 35 ships run on methanol, and only one on ammonia. In terms of tonnage, 6.65% of ships using alternative fuels rely on LNG.
Methanol is gaining interest as a propulsion option, particularly for container ships. While it currently accounts for only 0.09% of the world fleet’s tonnage (with 35 vessels), it represents 9.68% of the tonnage on order, with 234 vessels under construction, 173 of which are container ships. Meanwhile, container ship operators have ordered 171 LNG-powered vessels out of a total of 832 vessels planned for LNG fuel.
Substitutes for decarbonisation
As it stands, it will take a long time for unconventional fuel vessels to dominate the fleet. In the meantime, shipowners and operators will need to find alternative ways to reduce emissions. New technologies may offer a solution. Vessel tracking systems, information technologies, and artificial intelligence to optimise cargo transport and vessel movements can help reduce fuel consumption.
“In recent years, numerous digital tools have been developed to optimise and decarbonise operations, either independently or in combination with other technologies. Artificial intelligence (AI) and machine learning (ML), the Internet of Things (IoT), connectivity, and optimisation platforms are all developing rapidly,” DNV experts highlight.
The report remains optimistic, suggesting that fuel-reducing technologies and more efficient fleet management could reduce emissions by 4-16% by 2030. This would save an estimated 40 Mtoe, equivalent to 2,500 of the largest ships switching to carbon-neutral fuels.