Meeting IMO’s 2030 targets not out of grasp?

Despite the challenges that defined this year, the maritime industry may be closing the chapter on 2023 with a sense of optimism.

Namely, BIMCO’s recent analysis provides a beacon of hope, suggesting that the International Maritime Organization’s (IMO) ambitious goal of achieving 5% zero or near-zero fuel usage by 2030 is not as elusive as it may seem.

The IMO aims for such fuels to represent at least 5% of the energy used by the shipping industry, with an aspirational goal of reaching 10%.

According to BIMCO, the key to achieving these targets lies in the transition to sustainable biofuels and alternative green and blue fuels. Currently, only 1% of bulk, container, and tanker ships are equipped for these fuels, and the availability remains low. However, the analysis indicates a positive trend toward preparedness and retrofitting within the industry.

As of now, the 1% of ships already prepared for alternative fuels constitute 2% of the fleet’s deadweight capacity. An additional 1% of ships and 4% of deadweight capacity are ready for retrofitting. Encouragingly, the order book reveals that 29% of ships and 42% of deadweight capacity are expected to be delivered prepared or ready for alternative fuels by 2028. And another 4% will be readied for retrofit.

Even with the yearly 1-2% recycling of the fleet’s deadweight capacity, BIMCO anticipates that by the 2030 deadline, a significant share of the fleet’s capacity will be prepared or ready for alternative fuels. This estimation is based on the phasing out of older ships using bunker fuel, coupled with an increase in the number of ships prepared for alternative fuels through orders, deliveries, or retrofits.

The container sector emerges as a frontrunner in the transition, with 5% of existing ships and 55% of ships in the order book prepared or ready for alternative fuels. BIMCO predicts that, once the order book is fulfilled, at least 23% of the container fleet’s deadweight capacity will be ready or prepared for alternative fuels. The tanker fleet is expected to reach 7%, and the bulker fleet at least 4%.

While liquefied natural gas (LNG) has been the predominant alternative fuel, BIMCO notes a growing popularity of methanol and ammonia.

The analysis concludes on an optimistic note, suggesting that, with COP-28’s call for a tripling of renewable energy capacity by 2030, there is increased likelihood that sufficient green and blue fuels can be produced to enable the shipping industry to meet the IMO’s 2030 targets, even without relying heavily on biofuels. As the industry continues its trajectory toward sustainability, the prospects of achieving these goals appear promising.