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Survey: Multifuel future is on the cards as companies ready to run their fleets on 3 or more fuels simultaneously

As the global maritime industry embarks on a decarbonization journey, a recent survey conducted among industry stakeholders has revealed that the path towards decarbonization will be complex, with a wide range of fuels in the mix through 2050.

Illustration; Courtesy of CMA CGM

The survey respondents expect their fleets to run on multiple types of fuel well into the future, indicating that the transition towards a low-carbon future will not be straightforward.

The Global Centre for Maritime Decarbonisation, the Global Maritime Forum, and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping carried out the survey of 29 shipping companies, with analytical support provided by McKinsey.

The respondents own and operate fleets—including container ships, tankers, dry bulkers, gas carriers, car carriers, cruise ships, tugs, and offshore vessels—comprising roughly 20 percent of the world’s total capacity.

It has also been indicated that the respondents tend to harbor more ambitious decarbonization goals than their industry peers, with about half targeting net-zero emissions by 2050.

Presently, 46 percent of surveyed companies (12 respondents) say that they have already run pilot programs involving one or more low-carbon fuels, for instance, operating ship engines on biodiesel instead of traditional fuel oil, and have established plans for further implementation, whereas 35 percent (nine respondents) have taken no action regarding greener fuels, the survey shows.

One-third of respondents say that they “don’t know” which types of fuel they expect their fleets to run on in 2030 and 2050. The remaining two-thirds of respondents express diverging expectations about what their fuel usage will look like.

Respondents’ projections for their fleets’ fuel consumption in 2050 are split evenly among a wide variety of options: green ammonia, biodiesel, and fuel oil lead the way with 16 to 17 percent of the fuel mix each, followed by blue ammonia, liquefied natural gas (LNG), e-methanol, biomethanol, biomethane, and e-methane, each representing a 6 to 10 percent share.

Respondents also indicate that they expect to spread their own consumption across multiple fuel “families.”

The fuel families consist of fuels that ship engines can use interchangeably: for instance, one category comprises heavy fuel oil, marine gas oil, marine diesel oil, and biodiesel, while another category comprises LNG, biomethane/bio-LNG, and synthetic/e-methane/e-LNG.

By 2050, 49 percent of respondents (weighted by fleet size) expect to adopt four or more fuel families within their own fleets, while another 43 percent expect to adopt three families.

“The most common scenario projected by 2050 (represented by 45 percent of respondents) is a fleet running vessels simultaneously on variants of fuel oil/biodiesel, methane, methanol, and ammonia. These outcomes would represent a significant increase in complexity over today’s fleets, in which managing simultaneous consumption of more than one or two fuel families within a given fleet is rare, and typically manifests as a pairing of fuel oil/biodiesel and methane (in the form of LNG),” the report said.

The companies behind the survey said that the most striking result from the survey was that shipping companies expressed a need to prepare for fleets that simultaneously run on three or more families of fuels.

“This implies a need to think strategically about when to introduce each fuel family to the fleet (a delicate balance of costs, decarbonization effects, and availability), how to create optionality in the fleet through dual-fuel and tri-fuel designs, and the reconsideration of networks and operating profiles to match the availability of fuels,” the report adds.

“This need not cause paralysis. Mechanisms such as green corridors (specific trade routes established between ports equipped to handle future fuels), multiyear offtake agreements (contracts assuring stable demand for certain fuels), and public-sector partnerships could help reduce risk and thus encourage experimentation and adoption.”

Finally, more than 80 percent of respondents indicate that four developments would be most transformative: greater availability of alternative fuels, cost reductions for alternative fuels, customer willingness to pay a “green premium,” and regulatory change.