The sixth edition report, a year in the making, forecasts 2-stroke and 4-stroke engine technologies on parallel paths for ammonia, enabling uptake in deep sea and regional short sea shipping, with the latter expected to be instrumental for maturing hydrogen technology.
Consequently, the development of fuel cells and 4-stroke engines is ahead of other hydrogen energy converters, the report finds.
Despite the strong interest in ammonia as fuel, it is currently restricted by immature converter technologies – and time is not on the industry’s side as it strives to decarbonise.
Only around 5.5% of total gross tonnage operating today, and around a third on order, can or will be able to operate on alternative fuels.
If the target of 5% of energy from shipping coming from carbon neutral fuels by 2030 is to be met, huge investments in onboard technologies ($8-28bn) and onshore infrastructure ($30-90bn) are needed.
An entire carbon-neutral supply chain needs to be established, involving sustainable biomass for biofuels, renewable electricity for electrofuels, sustainable carbon for carbon-based electrofuels and large scale carbon capture and storage (CCS).
The uptake of carbon-neutral fuel needs to pick up in the mid-2030s, reaching 40% of the fuel mix in 2050 under the current IMO ambitions, and 100% to decarbonise shipping fully, the report states, with carbon-neutral liquefied natural gas (LNG) and MGO (marine gas oils) largely replacing fossil versions.
The IMO Greenhouse Gas Strategy is driving policy development and the next wave of regulations (CII, EEXI and SEEMP Part III) take effect from January 1 next year. The strategy will be revised next year, possibly ’strengthening its emission-reduction ambitions’, it adds.
Meanwhile the trend of larger ships being ordered with alternative fuel propulsion is continuing, with fossil LNG as the dominant fuel. LNG heads the list of alternative fuel uptake, both for ships in operation (923) and on order (534), and it accounts for 30.2% of ships on order by gross tonnage.
However fossil very low sulphur fuel oil (VLSFO/MGO) and LNG are in ’rapid decline by mid-century or are phased out completely in the most ambitious decarbonisation scenarios’.
Identifying winners among different carbon-neutral fuel options is difficult given the uncertainties on price and availability, but DNV outlines under what conditions each will proliferate.
Bio-LNG, bio-MGO and bio-methanol, which are relatively energy-dense hydrocarbons, would be the preferred fuels, given sufficient availability of sustainable biomass.
The uptake of bio-methanol is very sensitive to the production cost compared with bio-MGO and bio-LNG. With low availability of sustainable biomass, the prices of biofuels will likely be uncompetitive with those of electrofuels and blue fuels.
Knut Orbeck-Nilssen, CEO Maritime at DNV, said, “The key challenge is the availability of carbon neutral fuels. The shipping industry cannot resolve this issue alone – it will have to reach out to other industries, to policy makers and different authorities in different geographies, to really get this going.”