DNV's Maritime Forecast to 2050 Important Viewpoints

On September 6, at the SMM Hamburg 2022, Det Norske Veritas (DNV) released the latest version of its "Maritime Forecast to 2050" report, the sixth consecutive year of DNV's "Energy Transition Outlook". One of a series of annual reports.

According to DNV, the report's new focus is on how to overcome the "ultimate barrier" to carbon-neutral fuel availability. In particular, this year's report considers a combination of key elements of the production, distribution and bunkering infrastructure that the maritime industry must have in place to make the transition to carbon-neutral fuels. In addition, the report updates its outlook on regulations, drivers, future technologies and costs for decarbonizing shipping.

The report models two different decarbonization pathways, namely the "2050 Vision target currently set by the IMO" and the "2050 complete decarbonization target". DNV's modelling analysis shows a future diversified energy mix, including fossil fuels and carbon-neutral fuels, 1 of which fossil fuels will be phased out by 2050.

“The world today is committed to decarbonization and sustainable development, and to find the best alternative carbon neutral fuel solutions and technologies.” DNV Maritime CEO Knut Ørbeck-Nilssen said, “No industry can achieve decarbonization alone, So industries around the world need to make the right choices together, and sustainable energy should be channeled into areas where it will make the most difference in reducing greenhouse gas emissions. The ultimate hurdle is the availability of carbon-neutral fuels, and to overcome this hurdle must be Build supply chains through cross-industry collaboration.

“An assessment of the decarbonization pathway analysis suggests that carbon-neutral fuels should start supplying within the current decade (2020-2030) to help decarbonize shipping. ② By 2030 at the latest, 5% of the fuels used in the shipping industry should come from carbon Neutralizing the fuel. This will require significant investment in ship-side technology and onshore infrastructure," Knut added.

It is critical that all stakeholders, including major energy and fuel suppliers and ports, develop a coordinated plan, and ③ corresponding incentives must encourage and support early movers to participate in the emerging global network of green shipping corridors.

The report's new and expanded library of shipping fuel mix scenarios can be applied to DNV's updated carbon risk management analysis framework to help shipowners find the most efficient and cost-effective fuel strategies. At the same time, in order to promote the green transition and minimize the risk of investment, ④ maintaining a continuous focus on fuel flexibility and energy efficiency improvement remains the key.

In terms of fuel choices, ⑤ the many uncertainties in future fuel prices and availability mean that at least in the short term, it is impossible to clearly identify an optimal choice among the various fuel routes - is it ammonia, methanol, diesel or methane? From sustainable biomass, renewable electricity, or fossil fuel production with carbon capture? The report also looks at the conditions under which each fuel pathway will be more dominant to facilitate adoption. DNV's Enhanced GHG Emission Reduction Pathway Model analysis also estimates the approximate investment required for the implementation of various new fuel supply chains, fuel technologies, and energy-saving measures from the perspective of the world fleet.

Eirik Ovrum, Principal Adviser at DNV Maritime and lead author of the Maritime Forecast to 2050 report, said: "Our analysis further shows the need for shipowners to adopt and ensure confident and robust long-term decarbonisation in their existing fleets and investments in newbuilding projects. Transformational decisions.”

“We simulated different scenarios for the availability of sustainable biomass to produce biofuels, renewable electricity to produce electrified fuels, and fossil fuels in combination with carbon capture storage technologies to produce blue fuels based on three major fuel families. Variations in specific fuel types were explored, along with a detailed analysis of the key factors influencing the cost differences of different fuels within each fuel family. From this, we investigated and analyzed a total of 24 different decarbonization scenarios.”

The fuel transition has begun. ⑥ Currently, 5.5% of operating ships (in gross tonnage) and 33% of newbuilding orders (in gross tonnage) use alternative fuels (mainly LNG so far). The market of the future will depend on diversifying energy sources, closely integrating energy markets, energy industries and production, and the availability and price of energy sources in various regions of the world.

DNV forecasts show that under the “full decarbonisation target by 2050” scenario path, ⑦ annual investment in ship-side technology between 2022 and 2050 is around $8 billion to $28 billion (depending on which type of fuel is used) get the fastest application). ⑧ The annual investment in building an onshore fuel supply chain by 2050 is about $30 billion to $90 billion.

"The annual order book for ships is expected to be around 2,000 ships by 2030, but there is still no one-size-fits-all fuel solution," says Knut Ørbeck-Nilssen. He concluded: “In response to this uncertainty, the new edition of the Maritime Forecast to 2050 report provides forward-looking guidance on expert advice and smart solutions to support ships in maintaining commercial competitiveness throughout their life cycle and Compliance operations, while providing strong support for the green decarbonization transformation of the shipping industry from the persistent demand and concern for safety.”