DECARBONISATION AND GREEN SHIPPING UNLOCKING A GLOBAL ENERGY TRANSITION
Shipping is the backbone of the global economy. It is by far the most efficient mode of freight transport and transports approximately 80% of the world’s trade volume, according to the United Nations Conference on Trade and Development (UNCTAD). However, as the industry’s development continues, it generates increasing carbon emissions from shipping.
Today, there is an opportunity to create a new paradigm through a set of manageable, practical solutions that could break the deadlock and accelerate decarbonisation. Making this happen requires collaboration within the shipping industry itself, across the broader shipping ecosystem and with other sectors.
The International Maritime Organization’s (IMO) ambition is to reduce the shipping industry’s greenhouse-gas emissions by at least 50% by 2050, and to reduce the carbon intensity of emissions by 40% by 2030 and 70% by 2050, compared to 2008 levels. The total cost of decarbonisation has been estimated at $1.65 trillion by 2050.
- Emissions from shipping could grow by 250% by 2050 if no action is taken.
- Halving shipping's emissions by 2050 could require $1.4 trillion in investment.
- But the scale of this challenge could be big enough to spur decarbonisation across other sectors, too.
12 SOLUTIONS TO OVERCOME THE BARRIERS TO DECARBONISATION
- Scale-up customer demand
- Global regulatory alignment
- Cross sector research and development
- Scale-up controlled pilot projects
- Coordinated industry commitments
- Flexible and modular designs
- Port coalitions
- Investor pressure
- Green finance
- Scale-up fuel production
- Scale-up bunkering infrastructure
- Operational efficiency
INVESTMENTS REQUIRED FOR DECARBONISATION & THE MARKET OPPORTUNITY
The investments identified to achieve decarbonisation can be broken down into two main areas: ship-related investments, which include engines, on-board storage and ship-based energy-efficiency technologies; and land-based investments, which include investments in the production of low-carbon fuels, and the land-based storage and bunkering infrastructure needed for their supply.
The biggest share of investments is needed in the land-based infrastructure and production facilities for low-carbon fuels, which make up around 87% of the total.
Only 13% of the investments needed are related to the ships themselves. These investments include the machinery and onboard storage required for a ship to run on low-carbon fuels both in new-builds and, in some cases, for retrofits. Ship-related investments also include investments in improving energy efficiency, which are estimated to grow due to the higher cost of low-carbon fuels compared to traditional marine fuels.
The total bunker fuel consumption is estimated to be around 250-300 million tons of annually. This means that shipping’s decarbonisation has the scale to be a catalyst for the broader energy transition, unlocking the market for zero-emission fuels – a shift that represents a trillion-dollar market opportunity.
DECARBONISATION & GREEN SHIPPING AT ADIPEC OFFSHORE & MARINE EXHIBITION
The ADIPEC Offshore & Marine exhibition will bring together the full range of the upstream and downstream fuel value chains along with government organisations to engage in dialogue and make investments required to accelerate the shift to zero-carbon fuels for the shipping industry and create a deeper understanding of the production and supply of the zero-carbon fuels that will pave the way for shipping’s decarbonisation.