Decarbonization in shipping

Decarbonization in shipping

GHG emissions from shipping to be reduced by at least by 50% in 2050

The shipping industry is expected to act upon the Paris Agreement and reduce greenhouse gas (GHG) emissions. In April 2018, the IMO adopted a GHG reduction strategy with a vision to decarbonize shipping as soon as possible within this century. The aim is to reduce total GHG emissions from shipping at least by 50% in 2050, and to reduce the average carbon intensity (CO2 per tonne-mile) by 40% in 2030 and 70% in 2050, compared to 2008.

The 50% emission reduction is ambitious and will likely call for widespread uptake of zero-carbon fuels, in addition to other energy efficiency measures, including speed reduction. Sufficient reductions are possible but challenging. Many solutions are not mature and will require major efforts, going beyond incremental efficiency improvements. 

Climate-related risks will be a key strategic business issue moving forward. This is not limited to direct emission regulations and physical risks to assets, but entails major shifts in consumer preferences, technologies and energy supply, which will impact the value of shipping assets.

Reduction options 

Currently known and mature energy efficiency measures can reduce emission per ship by 20 - 30%, dependent on ship type. This does not include speed reduction. 

Future fuels for shipping need to have a zero or near-zero carbon footprint.

Moderate to extensive speed reduction (20 - 50% reduction) is technically feasible, but requires commercial acceptance and a restructuring of the logistics system. 

Reducing SOx and NOx emissions and treating ballast water will increase energy use in shipping. Ballast water treatment, distillates, scrubbers, catalyzers and exhaust gas circulation are all measures that increases energy need. Addressing local pollution and transfer of alien species is necessary, but over time the emphasis will increasingly be on GHG. All pollutants must be addressed in future designs. 

DNV GL believes a trajectory for shipping resulting in a 50% reduction in CO2 emissions by 2050 compared to 2008 is ambitious. It will require application of currently immature technology and solutions, acceptance of lower speed and deployment of large volumes of zero-carbon or carbon-neutral sustainable fuels. Significantly reducing emissions will increase cost of transportation, but solutions will not be applied if they are too costly. The key to achieving reduction of emission is developing, maturing and scaling up solutions to a level where the cost is acceptable. Regulations should be supplemented by other policy measures and incentives to drive technology development and emission reductions, while at the same time ensuring the shipping activity is not restricted. Temporary offset mechanisms may be needed to allow flexible means of compliance, and ensure reductions where it is most cost-effective.

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