Decarbonization of Shipping in 2050: More Needs to be Done, and Quicker, Says DNV GL Report

LONDON and HAMBURG, Germany, Sept. 16, 2019 /PRNewswire/ -- Unless action is taken quickly, the shipping industry will not meet the IMO 2050 decarbonisation target, say experts from classification society DNV GL in the recently launched "Maritime Forecast to 2050."

DNV GL – Maritime CEO Knut Ørbeck-Nilssen told the approximately 150 shipping professionals attending the event in the Guild Hall during London International Shipping Week (LISW) that part of the problem faced by the industry is not knowing which technology and fuel to opt for. "Ships built today will have to compete with vessels coming onto the market in five, ten or 15 years' time, and must consider future standards to remain competitive," he said. "Considering the uncertain future that lies ahead, failing to be future-proof in the newbuilding phase could lead to that asset being stranded in the not so distant future," warned Ørbeck-Nilssen.

While new technology in shipping will necessarily include a digital element, major changes must come from a collaboration between academia, industry and government, said Ørbeck-Nilssen. Even with such collaboration the deployment of low carbon fuels could take a significant amount of time to be realized, and for most alternative fuels the infrastructure has not even started to be developed, he noted.

Currently only LNG as an alternative fuel sees significant infrastructure development, but much more needs to be done. Still, LNG is considered by DNV GL as the most adequate bridging fuel, allowing the industry to meet at least the 2030 climate goals. However, to reach the 50% reduction necessary by 2050, low or zero emission fuels are needed, such as ammonia and other carbon-neutral fuels, which DNV GL forecasts will drive the emissions reductions into the mid of the century. Pathway modelling indicates that carbon-neutral fuels need to supply 30% to 40% of the total energy in 2050, to meet the IMO strategy.

Shipping decarbonization is "off course", said DNV GL's Øyvind Endresen, one of the report's authors, and there needs to be more effort to achieve the IMO's climate goals. Increased attention on the climate crisis, the responses from other industries, and growing public pressure, all meant that the maritime industry was being driven to respond, he said.

To achieve the 50% cut of carbon emissions by 2050 from 2008 levels, Endresen said that the decarbonisation programme must speed up by using coastal and short-sea shipping as a testbed for new technologies and fuels. He stressed that new ships should be "fuel flexible" with a view to "future-proof" the vessels as new regulations are enacted or to meet the challenges of price fluctuations in some fuels.

The DNV GL expert outlined how this would happen by using a graphic he called the developmental staircase. On the first level fuels are still in the R&D phase and that includes ammonia and hydrogen; on the next step hydrotreated vegetable oil (HVO) and batteries are in use by inland ferries; the third and fourth steps are coastal and short-sea feeder vessels that already use LNG for some time, while on the top step, the deep-sea level, liquefied natural gas now also becomes a valid fuel option.

While the infrastructure for carbon-neutral fuels does not exist yet, this could change rapidly with more R&D efforts and by using coastal and shortsea shipping as a testbed for new technologies. Endresen said that if the focus is on new technology and ship design, then by 2050 some 25% of available maritime fuel could be ammonia, because it has a number of advantages, including the ability to drive a standard internal combustion engine with a few modifications. Furthermore, it is a fuel that LPG operated ships could transition to, even though there are few in service today.

There are still major barriers standing in the way of greater development and uptake of low carbon fuels, including cost and availability, said Christos Chryssakis, DNV GL business development manager. But there are also opportunities with these fuels, and he emphasised that the fuel of the future will not be a single fuel, but a mixture of fuels, dependent on the shipping sector that an owner is in.

The challenge for the industry was laid out ably by Sovcomflot UK Managing Director Callum Ludgate who talked about the availability of alternative fuels, this case LNG. "In reality there is only LNG by ship available today, in Gibraltar and Northwest Europe; it's coming, but the key is it has to be delivered by ship, you can't wait around for 32 trucks to come and fill you up."

The choices owners make will also be shaped by customer demand, said Ludgate. The demand side of the shipping equation was fundamental to how the industry would need to adapt over the next 30 years as the global economy goes through fundamental changes, he noted.

Dr Adam Kent, Managing Director at consultancy Maritime Strategies International (MSI) and the last speaker of the day, summed up perfectly when he said, "There isn't one solution that will solve the IMO 2050 puzzle, it will be a combination of a number of solutions and a number of ways of looking at the market."

The "Maritime Forecast to 2050" is part of DNV GL's Energy Transition Outlook (ETO) series. This year's Forecast is the third of its kind. The report is available for download at https://eto.dnvgl.com/2019/download

Picture is available at AP Images (http://www.apimages.com)

Media contact DNV GL:
Nikos Späth, Head of Media and Public Relations
DNV GL Maritime Communications
Phone: +49-40-361-494-856
Email: nikos.spaeth@dnvgl.com