2023 in review: A transformative year for shipping and maritime
In the maritime realm, 2023 has been a year marked by transformative projects and announcements, on both the regulatory side, ship designing, and shipbuilding front as well as demand signals for the production of alternative fuels. Amidst geopolitical turbulences in the Middle East, the ongoing conflict in Ukraine, and the lingering aftermath of the COVID-19 pandemic, the maritime industry has demonstrated unwavering resilience in the face of continuous black swan events.
The push for decarbonization and energy transition seen this year paints a promising picture of the industry’s ability to navigate complex global dynamics and emerge stronger on the path toward a more environmentally conscious and efficient future.
Here’s a glimpse into some of the key developments that have shaped the maritime landscape over the past year.
- Landmark Regulatory Achievement of IMO: The most important development in this context is certainly the adoption of IMO’s Net-Zero Target and Revised GHG Strategy. In July 2023, the International Maritime Organization (IMO) adopted a revised greenhouse gas (GHG) strategy aiming for net-zero emissions around 2050.
IMO member states have vowed to reduce carbon intensity of international shipping by at least 40% by 2030, compared to 2008, and fast track uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to represent at least 5%, striving for 10%, of the energy used by international shipping by 2030. This is a massive stride and a considerably more ambitious strategy when compared to the previous target of halving shipping emissions by 2050.
Even though fierce critics would say that the strategy is rather weak in defining exact targets and wording, the battle to align the strategy with the Paris Agreement of keeping global warming within 1.5 degrees Celsius has been an extremely difficult one and should be praised as a milestone for the shipping industry.
2. Prevention of Major Oil Spill: A major feat for the maritime industry was made in August 2023, with the successful completion of the oil transfer operation from the FSO Safer to a replacement very large crude carrier, preventing a potential catastrophic oil spill by removing over one million barrels of oil from a decaying floating storage offshore (FSO) unit moored off the Red Sea coast of Yemen.
3. Laura Maersk: The Dawn of Green Container Shipping: The maritime landscape welcomed a unique vessel, Laura Maersk, christened as the ‘world’s first green containership’ by Ursula von der Leyen.
The vessel is the world’s first containership to run on green methanol ushering in an era of methanol-powered containerships. Specifically, the container shipiing sector has emerged as a frontrunner in embracing methanol as a cleaner alternative fuel by investing in methanol-powered and methanol-ready newbuilds.
Data from DNV’s Alternative Fuels Insight shows that containerships make up the lionshare of the methanol-powered ordrbook of 205 vessels, with 156 ships.
4. Ammonia Surpasses Methanol in Shippings Decarbonization Journey: The International Energy Agency said that ammonia is taking the lead in shipping’s decarbonization trajectory, relegating methanol to a secondary position. The industry is witnessing a paradigm shift with ammonia emerging as a preferred fuel, commencing at zero emissions and influencing the development of comprehensive fuel supply systems.
The emergence of ammonia as an alternative fuel highly depends upon the commercialization of ammonia-fueled engines which is on the brink of becoming a reality. Three engine industry makers, MAN Energy Systems, Wärtsilä, and WinGD are racing against time to deliver the engines to the market.
As such, ships ordered so far have been predominately denoted as ammonia-ready. Overall, data from Clarksons released in June this year showed that there were 191 ammonia “ready” ships on order.
Ships powered by ammonia are expected to become a reality very soon.
Yara Eyde, which has been described as the world’s first containership to be powered by pure ammonia as fuel, is scheduled to enter the market in 2026, according to its developers.
The vessel is being developed by ammonia producer and shipowner Yara Clean Ammonia and the Norwegian container operator NorthSea Container Line.
Yara Eyde is intended to operate between Norway and Germany, making the route the first emission-free sea route to the continent.
Furthermore, Belgian shipowner Exmar recently announced that its newly ordered LPG carriers would be fitted with ammonia-powered engines, claiming an ‘industry-first’.
Swiss marine power company WinGD confirmed that it will deliver its ammonia-fuelled X-DF-A engines to the two newbuildings to be built for Exmar LPG BV, a joint venture of Exmar and Seapeak.
The two 52-bore X52DF-A engines will be delivered in Q2 2025 and will be among the first of WinGD’s ammonia-fuelled engines to enter service. The engines achieved the first class approval for ammonia two-stroke engines from LR in September 2023.
The 46,000-cubic-meter medium-sized LPG carriers are being built by South Korean shipbuilding major HD Korea Shipbuilding & Marine Engineering. The duo is designed to transport both LPG and ammonia once delivered in 2026.
Given the ongoing interest in ammonia as an emission-free alternative to fossil fuels, there have been rising safety concerns surrounding ammonia bunkering and the design of ammonia-bunkering vessels.
However, it appears that these concerns can be addressed with precautionary measures and engineering solutions.
5. Ammonia carriers: Simultaneously, there has been a growing demand for the construction of ammonia carriers over the past year driven by the rising anticipation for the seaborne transport of ammonia as an alternative fuel and a carrier of hydrogen.
In September, South Korean shipbuilding major HD KSOE signed contracts for the world’s first four 88,000 cbm very large ammonia carriers (VLACs) with Capital Gas and Singapore’s Eastern Pacific Pte (EPS).
In November, Hanwha Ocean won an order worth around $498 million to construct four VLACs for Greek shipowner Naftomar Shipping and Trading. Each VLAC will be able to transport 93,000 cubic meters of ammonia which makes them the largest of its kind in the world so far.
What is more, in early December tanker operator Maersk Tankers ordered up to ten very large ammonia carriers (VLACs) at Hyundai Samho Heavy Industries in Korea.
In addition, the construction of LPG carriers that have the capability of transporting ammonia has been on the increase as well.
This surge is closely tied to the growing recognition of ammonia as an alternative fuel, and a carrier of hydrogen particularly in the context of the global shift towards cleaner energy sources and the broader energy transition.
6. On-Board Ammonia Cracking System Pioneers Hydrogen Generation: A groundbreaking achievement unfolded with the introduction of the world’s first on-board ammonia cracking system. The technological marvel was introduced by Spanish hydrogen transport solutions provider H2SITE. The on-board ammonia cracking system generates high-purity hydrogen coupled with a PEM fuel cell which is used to produce electricity for the ship’s auxiliary consumptions.
7. Wind-Assisted Propulsion Takes Center Stage: Wind-assisted solutions have rapidly increased in popularity within the maritime industry. The completion of numerous projects and installations attests to the growing traction of wind-assisted technologies. Notably, large vessels have begun setting sail with wind propulsion solutions as the industry explores ways of harnessing renewable energy sources for operational efficiency.
One project made headlines this year, namely the installation of wind wings on board the Cargill-chartered Pyxis Ocean. The incorporation of wind-assisted propulsion systems is projected to save a substantial amount of fuel daily, resulting in lower emissions.
In addition, dry bulk shipping company Berge Bulk has fitted its Newcastlemax bulker, Berge Olympus, with four BARTech WindWings by Yara Marine Technologies.
With four WindWings installed, each possessing an aerodynamic span of 37.5 meters height and 20 meters width, the Berge Olympus is expected to save 6 tonnes of fuel per day on an average worldwide route.
The company said the retrofitting project makes Berge Olympus the world’s most powerful sailing cargo ship.
In addition, Norwegian shipping company Odfjell in partnership with bound4blue, a Spanish developer of wind-assisted propulsion technology, plans to install the eSAIL® suction sail system on a chemical tanker, making it the first tanker vessel in the world to harness this type of technology.
Currently, 31 large ocean-going vessels have wind-assist technology systems installed equalling a transportation capacity of approximately 2 million deadweight tonnes of cargo. There are 8 wind-ready ships in operation, 22 ships with wind propulsion technology installations pending, and 5 newbuild ships on order that will have primary wind propulsion technology.
These ships, in addition to 20+ smaller sail cargo and small cruise vessels using wind, means that there are currently more wind-powered ships than the total number of large cargo ships operating on new low- and zero-emissions fuels in the global shipping fleet of 50,000+ vessels.
Wind propulsion installations on large vessels are on track to surpass the 50 mark in early 2024, according International Windship Association (IWSA).
8. Carbon Capture, Storage and Transport:
Northern Lights, a joint venture established by energy giants Shell, Equinor, and TotalEnergies, has achieved significant milestones this year, marking a pioneering leap toward the world’s first cross-border transportation and storage of CO2.
Among these accomplishments, Northern Lights has expanded its ordering portfolio to include four liquefied CO2 (lCO2) ships. Additionally, the venture has entered into a binding commercial agreement with Yara International, a Norwegian-based player in the ammonia industry.
Meanwhile, Japanese industry majors are stepping up their efforts aimed at the construction of LCO2 carriers and the development of a CCS supply chain.
At the end of November, Mistubishi Shipbuilding delivered a demonstration test ship intended for the transportation of liquefied carbon dioxide. The vessel, named Excool, will be chartered by Nippon Gas Line Co., which is jointly conducting the NEDO project, to collect and analyze operational data through CO2 transportation demonstration tests.
Aside from Japanese industry majors, CO2 transport has also attracted interest from oil and gas industry majors as CCS increases in relevance as the frontrunner in decarbonizing heavy to abate sectors.
9. Jiangnan Shipyard Unveils Design for the Largest Nuclear-Powered Containership: The unveiling of the design for the world’s largest nuclear-powered containership by Jiangnan Shipyard signifies a remarkable leap in maritime engineering and energy innovation.
Leveraging the potential of clean nuclear energy, the unveiled design incorporates a fourth-generation molten salt reactor technology, widely regarded as highly advanced on a global scale.
The ultra-large nuclear container ship is designed to achieve “zero emissions” during the ship’s operating cycle, the shipyard said.
Nuclear propulsion has garnered increased attention and consideration for maritime applications, signaling a departure from previous perspectives. The renewed interest in nuclear propulsion for maritime vessels stems from several compelling reasons.
Firstly, nuclear power offers a highly efficient and sustainable alternative to traditional fossil fuel-based propulsion systems, addressing concerns related to carbon emissions and environmental impact. Secondly, nuclear propulsion provides an extended operational range and reduces the need for frequent refueling, thereby enhancing the autonomy and endurance of maritime vessels.
Additionally, nuclear-powered vessels can operate for extended periods without the constraints of conventional fuel availability, making them well-suited for long-range missions and strategic naval operations.
Hence, several shipbuilders and classification societies have embarked upon studies to explore designs and potential of MSR as the potential path toward a decarbonized future including ABS, Fincantieri, HD KSOE, and Crowley.
10. BIMCO’s Optimistic Outlook on IMO’s 2030 Targets: Closing the year, BIMCO offered an optimistic perspective on the maritime industry’s ability to meet IMO’s 2030 targets. This analysis reflects the trends in the ordering industry and the demand for alternative fuels prompted by regulatory impetus.
In summary, 2023 has been a year of dynamic shifts and noteworthy achievements within the maritime sector. The momentum gained in the adoption of green technologies, such as wind-assisted solutions and alternative fuels, signals a positive trajectory towards a cleaner and more environmentally conscious maritime industry.
The hope for 2024 is that it brings even more strides toward sustainability and that that geopolitical tensions, which have presented security challenges to global shipping, can be overcome.