Decarbonising shipping will be costly for shipowners, ports and their customers. DNV “Maritime Forecast To 2050” Report

By Marek Grzybowski

Most ships use diesel engines for propulsion and power generation, and large ocean-going vessels are usually powered by low-speed diesel engines. A DNV study found that the largest 25,000 ships, or 30% of the world’s fleet, were responsible for 80% of CO2 emissions, according to the authors of the latest DNV Maritime Forecast To 2050 report.
– A change to carbon-neutral fuels for these ships is essential, DNV postulates. Fleet replacement is slow and many commercial ships with engines using marine fuel with a high sulfur content still sail the oceans. The situation is not changed by the introduction of scrubbers, as many ports are withdrawing from allowing ships with this equipment to dock.

The situation looks better in the case of new construction. Engine manufacturers are working on providing new systems that allow engines to operate on alternative fuels. Shipowners are increasingly investing in systems that provide fuel flexibility. More and more contracts include clauses for ship propulsion with dual-fuel engines. Ships powered by alternative fuels are increasingly appearing on sea routes. Engine manufacturers also offer engine models that will be ready to use ecological fuel after later conversion.

Today, new types of main engines are available that enable the use of alternative fuels. The offer includes both two-stroke engines for large ships and four-stroke engines used in smaller ships, as well as auxiliary drives for all ships. But this does not mean that all shipowners are willing to incur additional expenses for new drives.

Many shipowners are still waiting to upgrade their propulsion systems
– Many in the industry are still waiting to see what happens, but now is the time for leaders across the industry to rise to the occasion. This means making smart decisions now that can accelerate the maritime green transformation – notes Knut Ørbeck-Nilssen, CEO Maritime, DNV, in the introduction to the report.

However, the trend of ordering larger ships with the possibility of using a dual-fuel system is starting to spread in the maritime transport industry. The use of gas as a second fuel with a power system from LNG tanks is still dominant. In fact, we are dealing with the use of fossil fuel, which is only seemingly a departure from the ecological dimension. – The order books are seeing an increasing number of methanol and LPG-powered ships, and there are announcements of the use of ammonia as fuel – emphasize the authors of the DNV Maritime Forecast To 2050.
As of June 2024, 7.4% of ships in operation (by gross tonnage) use systems based on alternative fuels to power their main engines. An analysis of the order book conducted by DNV experts allows us to state that 49.5% of the tonnage will operate on alternative fuels. Last year, these values ​​were estimated at 6.5% and 51.3%, respectively. If we take into account the number of ships, these shares are lower and amount to 2% in relation to the fleet in operation and 27.1% of contracted ships.

According to DNV analysts, this means that shipowners are choosing dual-fuel systems for larger ships. The data indicates that the transformation of the merchant fleet to a more environmentally friendly one is already taking place on a significant scale, but still slower than expected when setting goals for 2030 and the following years (2040 and 2050).
Shipowners are introducing more and more ships with engines powered by alternative fuels to their fleets. An analysis of the order portfolio suggests that large ships with methanol engines will not join the fleet until the end of 2030.

  

LNG on less than 7% of ships
— In the global fleet, 92.6% of tonnage in operation can only use marine fuel, while half of the contracted tonnage will not have the possibility of using alternative fuel – informs the report. Ships powered by LNG systems account for 6.7% of the tonnage of ships in operation, while 36% of the tonnage in the order book will be able to use gas as fuel in the main engines.
Engines powered by gas, i.e. fossil fuel, are among the most frequently chosen main propulsion systems in the segment of container ships (171 ships contracted) and car carriers (157 ships). Systems with LNG systems are chosen less often by shipowners operating tankers (93), bulk carriers (16) and cruise ships (22).
LNG tankers using natural gas as fuel in the main engines number 687 ships – DNV specialists calculated. Another 339 LNG tankers were contracted in shipyards. The fleet of liquefied gas tankers currently consists of 1,239 vessels, and 832 vessels are being built in shipyards.
— The fleet of LPG tankers consists of 139 vessels. In these vessels, the main engines are powered by gas from LPG installations. However, this is only 0.37% of the tonnage of the world fleet, DNV states. Taking into account the fact that 96 LPG tankers are on order, 1.9% of the tonnage in the shipyard’s order book will use LPG systems to power the ships’ main engines. The shipyards are also building two vessels with engines powered by ethane as a secondary fuel.
— Methanol-powered vessels constitute only 0.09% of the world fleet tonnage in operation. More and more shipowners are becoming convinced of this type of propulsion. 9.68% of the tonnage currently in operation has been contracted in shipyards. Container shipowners have shown a preference for vessels with methanol engines. This trend continues in 2024. A total of 173 container ships with methanol-capable engines have been ordered. Bulk carriers and car carriers are the next groups of ships with methanol-powered engines. 24 and 20 ships have been ordered, respectively, DNV calculates.

 

Neutral fuels on ferries, barges, bulk carriers
— Full decarbonization will require a large-scale transition to carbon-neutral fuels, and the industry continues to adopt various fuel technologies such as LNG, LPG, methanol and ammonia. Green fuel production is also underway, but large-scale supply remains elusive, and today’s reality is that 93% of the world’s fleet still runs on conventional fossil fuels, emphasizes Knut Ørbeck-Nilssen, CEO Maritime, DNV, at the beginning of the report.

The report’s authors also point to attempts to popularize innovative power systems. They recall that after the introduction of the MF Hydra ferry, which uses hydrogen to power its fuel cells from 2023, the ferry operator Torghatten will take delivery of two 120-meter hydrogen-powered ferries in 2025. The Dutch Samskip has ordered two 700 TEU container ships from the Cochin shipyard in India. They will be equipped with hydrogen fuel cells.
It is not only the Norwegians who are experimenting with hydrogen propulsion. The world’s first hydrogen fuel cell barge has been put into service in the Netherlands. They have been installed on containers together with hydrogen tanks. The batteries will provide electricity to power the barge’s propulsion engines, informs Holland Shipyards Group, which in early 2024 announced the delivery of “H2 Barge 2”, the second hydrogen-powered ship, for Future Proof Shipping. This comes shortly after the successful delivery of the first vessel, the “H2 Barge 1”, in early 2023. This took place on 8 February 2024, reports the European Inland Transport Platform (IWT), whose representatives took part in the inaugural launch of the H2 Barge 2. This is the “H2 Barge 1” version of the modernised hydrogen-powered vessel. The handover took place at the Werkendam river port south of Rotterdam. The event marked an important milestone in the field of sustainable transport, demonstrating the transformative potential of hydrogen technology in the inland navigation sector, emphasises the Rotterdam Port Authority. The hydrogen-powered H2 Barge 2 will transport containers completely emission-free on the Rhine between Rotterdam and Duisburg. Duisport and the Port of Rotterdam intend to connect the refuelling stations with a hydrogen transport pipeline. The Future Proof Shipping (FPS) H2 Barge 1 is 110 metres long and will transport Nike goods several times a week between the Port of Rotterdam and the BCTN inland terminal in Meerhout, Belgium. This is expected to result in annual greenhouse gas emission savings of 2,000 tonnes of CO2, the Rotterdam Port Authority emphasises.

Experiments with ammonia in ship propulsion
— ​​Despite the low maturity of ammonia energy converter technology, we have recently seen the first orders for ammonia-powered ships – DNV analysts note. Belgian shipowner CMB has ordered a series of 10 bulk carriers with main engines adapted to use ammonia as fuel. The Capesize bulk carrier is part of a contract that the Belgian shipowner signed with the CSSC Qingdao Beihai Shipbuilding shipyard in January last year. This is the world’s first order for Capesize bulk carriers with engines adapted to burn ammonia. In addition to the innovative propulsion system, the ship will have an optimized hull shape. The ships will be 300 meters long and 25.2 meters wide. They will be equipped with two 3,000 m3 tanks for ammonia adapted for combustion. CMB said its clean technology division, CMB.TECH, has partnered with Swiss marine energy company WinGD to install X72DF dual-fuel ammonia engines on ten 210,000-dwt bulk carriers, due for delivery in 2025 and 2026. WinGD said the new engines will be based on the X92B engine, as its fuel efficiency makes it an ideal engine for developing ammonia-powered engines.

The first operators in the ammonia tanker segment have also arrived, with Exmar LPG BV ordering two vessels and NYK one tanker. These will be medium-sized gas carriers capable of burning ammonia as fuel. In total, 25 ammonia-powered vessels have already been placed in shipyards.

PSV Viking Energy will soon be sailing into the North Sea, the first offshore vessel to be powered by ammonia. Eidesvik Offshore recently announced this groundbreaking step on the path to decarbonization. The PSV Viking Energy will be equipped with a dual-fuel ammonia engine. In 2026, the ammonia-powered vessel will operate on Equinor’s wind farms. According to the operator, it will reduce greenhouse gas emissions by 70% or more.

Hybrids and electric ships and ferries on the water
The use of electric drives is becoming increasingly common, often in a hybrid system with combustion engines. In addition to ships that can use alternative fuels, 940 ships currently in service use batteries to power the main drive or in a hybrid power supply system for the main engines – DNV informs in a report. Among them are also ferries built in Poland by CRIST, a shipyard from Gdynia, which coordinates BSSC ZEV HUB, a hub for the production of zero-emission ships. We wrote about it here. The shipyard’s contract portfolio includes 433 ships that will use electric power or a hybrid system.
It is not only ferries that have hybrid systems with battery power. Here, the Finns are setting a new course in environmentally friendly shipping. They are introducing hybrid 90-meter bulk cargo ships to the Baltic and North Seas. A series of 12 units has been ordered from India. The series of 12 units is being built between 2023 and 2026 at Chowgule Shipyard Pvt Ltd. Each ship (5,350 dwt), with a length of almost 90 m (LOA) and a width of about 16 m, is equipped with a main propulsion system, which is a 1920 kW Yanmar engine and an electric drive. The unit has an ice class of 1A. Maneuvering will be facilitated by a 300 kW bow thruster. The ship stands out thanks to its equipment with a 1 MWh battery pack and the possibility of connecting to shore power. The ship can take on board 100 TEU or 50 FEU. We write about it here. 

Decarbonisation in shipping is progressing slowly

Fully electric propulsion systems are used primarily on smaller vessels with limited range, mainly ferries. It is important to note that most vessels that can use alternative fuels have dual-fuel solutions. Battery-electric vessels almost always have generator sets powered by marine fuel. These are backup propulsion systems that are most often started in extreme weather conditions. In addition, alternative fuel can still come from fossil energy sources, which emphasizes the need for regulations that address greenhouse gas emissions from a well-to-wake perspective.

Let’s be honest. Decarbonization in shipping is still slow. Shipowners are not willing to spend more on ships than their business plans and OPEX and CAPEX calculations suggest. These are uncertain times and it is also important to recognise that seaports are slow to adapt their infrastructure to LNG and alternative fuels. Operating gas bunker barges is not cost-effective everywhere, let alone other alternative fuels. Only a few leading ports, supported by public funds, are leading the way on the path to decarbonisation.

In this latest edition of the Maritime Forecast to 2050, we explore how this can be reversed through pathways that include operational and technological solutions. We explore how shipowners and other stakeholders can ensure that fleets meet their emission targets and regulations while maintaining a competitive position, emphasises Knut Ørbeck-Nilssen, CEO Maritime, DNV.

Satellite technologies, IT and AI support decarbonization
Decarbonization of operating fleets is aided by systems through which ship stowing, their passage routes and speeds and logistics operations are increasingly managed from land-based operational centers. We write more about this here. 
The use of space technologies to track ships, and IT systems and artificial intelligence to optimize cargo transport and ship traffic provides ship operators with access to real-time data and fleet management. IT support for decision-making processes and automation of monitoring the work of machines and people on ships enables remote monitoring of the work of the ship and crew and economic optimization of fleets.
Data stored in the cloud and building digital twins of transport operations allows for eliminating the effects caused by unexpected changes on global logistics routes. Fleets are being made immune to “Black Swan” attacks, as we write here.
– In recent years, numerous digital tools have been developed to optimize and decarbonize operations, independently or in combination with other digital technologies. Artificial intelligence (AI) and its subset machine learning (ML), the Internet of Things (IoT), connectivity and computer simulation and optimization platforms are developing rapidly – emphasize DNV experts.
These digital technologies can be divided into four types – detection technologies, supporting technologies, data processing technologies and decision-making technologies. The use of all these solutions is necessary to optimize shipping based on IT tools such as satellite technologies. They can also be used to increase the safety of ships and crews and track black and gray fleets and smuggling of strategic raw materials.
While decarbonization and digitalization are the dominant drivers of the transformation in shipping, maintaining an acceptable level of safety is a prerequisite for the introduction of new technologies and solutions.
This year’s “DNV Maritime Forecast To 2050” will be presented by Knut Ørbeck-Nilssen, CEO Maritime, DNV at SMM Hamburg on September 3. This will take place during a special meeting with Arsenio Dominguez, Secretary General of the International Maritime Organization (IMO). The discussion will focus on key issues shaping the future of the maritime industry, including IMO’s greenhouse gas emission reduction targets. Virtual participation is possible. Registration: https://dnv.social/5BP