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Mærsk Mc-Kinney Møller Center outlines 4 key actions to fast-track decarbonization

The maritime industry must take immediate collective action on an unprecedented scale to bring the decarbonization of the industry closer to the Paris 1.5°C trajectory, according to Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping.

International and domestic shipping uses approximately 12.6 EJ of energy each year, corresponding to around 300 million tonnes of fossil fuels. To align with the Paris 1.5°C trajectory, the industry must limit its fossil fuel consumption of the global fleet to approximately 6 EJ by 2030.

In a new report released by the center, four key levers were identified to fast-track the transition.

Improving onboard energy efficiency by just 8% – or 1% per year until 2030 – could save ~1 EJ of energy, equivalent to 24 million tonnes of fuel oil and 0.1 GtCO2eq of greenhouse gas emissions.

To leverage this opportunity, shipowners and operators must take immediate action to increase energy efficiency in operation as well as by installing energy efficiency technologies in existing or new vessels.

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An array of energy efficiency measures and technologies and solutions are ready for use today such as voyage planning, weather routing, hull and propeller fouling management, air lubrication, propulsion-improving devices, engine technology, electrification, waste heat recovery as well as alternative power systems such as wind-assisted propulsion. However, they are lacking commercial incentives and imperfect regulation means their uptake is limited.

The uptake of operational and technical energy efficiency measures varies across vessel categories and segments. There are some areas of growing application, particularly in the passenger, cruise, and container segments. In the fragmented bulk and tanker segments, although leading operators are applying energy efficiency measures, overall adoption remains low, the report said. As a result, the industry still has substantial potential to save onboard power, reduce energy consumption, and limit emissions.

Enabling alternative fuel pathways

Today the maritime industry uses ~300 million tonnes of fossil fuel oil to produce ~12.6 EJ of energy, emitting more than 1 gigatonne of GHG emissions. Fossil fuel oil needs to be replaced with low-GHG alternatives to reach the sector’s decarbonization goals. The main alternatives include biomethane, e-methane, bio-methanol, e-methanol, blue ammonia, e-ammonia, bio-oils, and e-diesel. The multi-fuel future is on the cards, however, all alternatives face technical, safety, commercial, and regulatory challenges.

The shipping is currently investing more in alternative fuel technology than fuel producers will be able to supply. This disconnect is partly because on-land investments in production infrastructure are much larger and riskier than investments in onboard technologies for alternative fuels.

“Current plans for upcoming alternative fuel production capacity suggest that supplies will be unable to meet demand in the coming decades. Long lead times mean we must start now to secure sufficient alternative fuel capacity in 2030 and beyond,” the center said.

It is estimated that this will result in a yearly shortfall of up to 20 million tonnes of alternative fuels. Furthermore, although the outlook indicates there will be a surplus of ammonia, methanol demand may outstrip supply by up to 80 million tonnes.

Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping/MAN Energy Solutions

To prepare to scale up alternative fuels, it is necessary to work on achieving technological readiness for all alternative fuel pathways and developing standards and regulations that ensure they are used safely, and with environmental and social responsibility.

Another important point is addressing the imbalance between planned alternative fuel production supply and demand with solid investment commitments in large-scale fuel production infrastructure and building the competencies needed to scale up all alternative fuel pathways.

Finally, the industry needs to develop regulations and measures that ensure alternative fuel pathways become commercially attractive.

Promoting abatement action through regulation, policy, and commitments

Emissions reduction and uptake of new technology need to be incentivized through industry commitments and regulatory reform. Companies across the industry must set ambitious decarbonization targets and report their progress to create the traction and transparency needed to drive the transition forward. In this, it is critical to maintain a people-centered approach to ensure a safe and just transition.

As the main regulatory body, the IMO must focus on creating policies, targets, standards and regulations that drive the uptake of decarbonization technologies, eliminate uncertainty, and close the cost gap between fossil and alternative fuels.

According to the report, specific actions needed this decade include:

  • Ambitious absolute emission targets from the IMO to reduce all GHG emissions from a well-to-wake perspective and reach net zero by 2050, aligned with the Paris 1.5°C trajectory.
  • Supplementary emissions intensity and efficiency targets, intermediate targets for 2030 and 2040, global GHG pricing, and transparent emission reporting.
  • Fast-tracked development of international rules and standards by the IMO to support alternative fuels and decarbonization technologies.
  • Regional, national, and local policy roadmaps encouraging dedicated investments in green energy and fuel infrastructure for the maritime industry transition and engineering capacity to build these facilities.

Promoting bold first movers and fast followers to unlock the transition

First movers will be key transition accelerators. The speed of the transition will depend on how quickly first movers from across the supply chain can come together and demonstrate decarbonization solutions, business models, and best practices for fast followers. However, being a first mover can be costly and uncertain.

To support them in initiating the transition, first movers will require:

  • Close collaboration across the value chain, between alternative fuel producers, ports, vessel owners/ operators and cargo owners to demonstrate and prove technologies, business concepts, and standards/regulations, and share the learnings, challenges, opportunities, and best practices.
  • Mobilizing regulatory, policy and financial bodies to help de-risk first mover investments and decarbonization activities.
  • Wide support for first-mover initiatives that drive collective decarbonization and share costs, benefits, and risks, such as green corridors and Book & Claim systems.

“Decarbonization won’t happen overnight. We must prepare ourselves for decades of working together towards this common goal,” the report concludes.

“We must change our mindsets from individualistic cost leadership to collaborative environmental leadership. And we must start now. The future of our industry depends on it.”