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Maritime decarbonization is the critical path towards limiting global temperature rise to 1.5 degrees Celsius by reducing greenhouse gas (GHG) emissions from the maritime industry, which accounts for about 3% of annual global GHG emissions, according to the International Maritime Organization’s (IMO’s).
This endeavor is essential, given the shipping industry's foundational role in the global economy and the pressing need to mitigate its environmental impact amidst predictions that maritime emissions could soar to 17% by 2050 without concerted action (international shipping enables 80-90% of global trade and comprises about 70% of global shipping energy emissions).
The exploration of alternative fuels, such as hydrogen and LNG, stands at the forefront of strategies for decarbonizing shipping, leveraging existing maritime transport infrastructure while contemplating the carbon footprint across the supply chain to ensure genuine sustainability.
As governments establish ambitious maritime emissions reduction targets, the alignment between regulatory frameworks and industry support becomes paramount. This synergy paves the way for implementing low-carbon fuels and advanced technological solutions, like carbon capture and electrification, within the maritime law and policy structures designed to spur the transition towards a greener maritime industry.
Such collaborative efforts underscore the dual focus on immediate reductions in transport-related emissions and the long-term goal of achieving a transparent and reliable decarbonization process through enhanced supply chain transparency, supported by digital innovations such as blockchain technology.
In order to reduce carbon emissions in the maritime industry, it is important to focus on exploring and using new types of fuels. These fuels can be easily incorporated into the existing infrastructure of the maritime industry. However, using these fuels comes with both advantages and challenges that need to be carefully considered and addressed.
This transition is already happening, and the report Maritime Forecast to 2050 by DNV predicts that by 2030, the shipping industry will require 30-40% of the global supply of carbon-neutral fuels. This estimate takes into account the expected demand of 17 MTOe (million metric tons of oil equivalent) per year and the current greenhouse gas (GHG) strategy set by the International Maritime Organization (IMO).
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A recent survey conducted by Global Centre for Maritime Decarbonisation, the Global Maritime Forum, and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (with analytical support provided by McKinsey), to find out how industry leaders are thinking about future fuels. Collectively, these shipping companies 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.
The snapshot that emerges from respondents’ answers portrays a world with a wide range of fuels in the mix through 2050. Many respondents expect their fleets to run on multiple types of fuel well into the future. This suggests that shipping’s route to decarbonization could be complex. But companies that are currently plotting investment strategies might consider viewing this inchoate moment as an opportunity for bold decision making. Multiple fuel pathways continue to be viable, and advantages for first movers are there for the taking.
Among the survey findings:
The report says:
¨In the world suggested by these survey answers, the role of first movers—and of entities that can galvanize entire value chains, from fuel production to a vessel’s consumption—will be vital. Organizations that lead the way might provoke and shape others’ actions, catalyzing investments that create their own momentum and, over time, perhaps result in the inevitability of a specific fuel scenario.¨
Also, another viable alternative is:
Electrification: Electrification suits shorter voyages, with ongoing advancements to overcome limitations for longer distances. According to a study on the potential for using batteries on ocean-going cargo ships led by The Maritime Battery Forum and CIMAC, currently there are 94 cargo ships with a battery system installed, with 17% being inland cargo ships, 64% coastal cargo ships, and 19% ocean-going cargo ships.
The transition to these fuels underscores the importance of a lifecycle approach, emphasizing supply chain transparency and chain of custody to ensure genuine sustainability. This comprehensive view addresses the critical question of sustainability by tracing the origin and production process of these fuels, from raw materials to end-use, highlighting the role of renewable energy and carbon capture in achieving a lower carbon footprint.
The regulatory framework and industry support play a vital role in facilitating the transition towards greener shipping practices, ensuring the successful implementation of maritime decarbonization measures.
It is important to note that ports play a crucial role in shipping logistics, requiring access to land near manufacturing districts and/or raw materials. Decarbonizing these ports can significantly reduce CO2 emissions from shipping infrastructure. To reduce greenhouse gas emissions in the shipping sector, it is essential to improve the infrastructure and processes involved in the supply chain and logistics of shipping. Shipping lanes, which are predetermined routes for ships, are also crucial for optimizing trade routes. When planning these routes, factors such as geographical boundaries and access to international industrial regions are taken into consideration.
As we can see, the synergy between regulatory frameworks, industry initiatives, and international partnerships is instrumental in overcoming these challenges. By focusing on planning, policymaking, and facilitating research and development, stakeholders can accelerate the adoption of sustainable fuels and technologies, ensuring maritime decarbonization aligns with global climate goals.
The concept of life cycle assessment (LCA) methodology encompasses the assessment of emissions of greenhouse gasses from the point of fuel production to its ultimate consumption by a vessel, an approach often termed as "Well-to-Wake." This methodology is bifurcated into two segments:
The International Maritime Organization Convention laid down the "Guidelines on Life Cycle GHG Intensity of Marine Fuels," also known as the LCA Guidelines.The purpose of these guidelines is to delineate procedures for the precise calculation of both well-to-wake and tank-to-wake GHG emissions for all types of fuels and energy sources utilized on maritime vessels, which also includes electrical power. These guidelines are subject to ongoing evaluations and enhancements, particularly in areas such as default emission factors, sustainability benchmarks, fuel authentication, and strategies for carbon capture on ships.
The LCA Guidelines serve as a resource detailing the GHG emissions that occur during the entire lifecycle of marine fuels. The term "lifecycle" refers to the comprehensive process that starts with fuel production and continues through its distribution to its final application in maritime operations. The "GHG intensity" is indicative of the volume of greenhouse gas emissions produced for each unit of fuel utilized. The primary objective of the LCA Guidelines is to establish a uniform framework that facilitates the assessment and comparison of GHG intensity across various marine fuel types.
The EU ETS (Emissions Trading System) is a key policy tool used by the European Union to control greenhouse gas emissions. It operates on the "cap and trade" principle, where a cap is set on the total amount of certain greenhouse gasses that can be emitted by covered entities. These entities are then allocated or auctioned a limited number of emission allowances, which they can trade with one another as needed, in order for the EU to meet its target of a 55% reduction in GHG emissions by 2030 relative to 1990 and net zero by 2050. The maritime industry has been brought into the EU ETS from 2024 as part of the EU's efforts to reduce emissions from this sector. Here are some key points to consider:
EU ETS timeline and Requirements
The European Union Emissions Trading System (EU ETS) will be introduced over a three-year period, with the coverage of emissions increasing gradually. The timeline is as follows:
Potential Inclusion of Smaller Ships: General cargo ships between 400 and 5000 GT may also be required to report emissions and could be incorporated into the EU ETS at a later stage.
Shipping companies operating to or from ports in the EU or European Economic Area (EEA) will have to adhere to the following obligations:
By implementing robust digital solutions and integrating them into the supply chain, the maritime industry can effectively streamline operations and reduce greenhouse gas emissions. These digital solutions enable real-time monitoring and optimization of fuel consumption, route planning, and vessel performance, leading to enhanced operational efficiency and competitiveness. With the collective efforts of industry stakeholders, regulatory bodies, and technological innovations, the maritime sector can accelerate its journey towards decarbonization and contribute to the global effort to reduce carbon emissions.
Shipping was easy, fuel costs were passed on to cargo owners. Now, the maritime industry must comply with regulations and meet expectations from stakeholders, customers, and partners. The industry needs to manage CII performance, account for carbon emissions, settle EUAs, follow LCA Guidelines, and handle the impact of the EU Emissions Trading System in the maritime supply chain.
Digitalization can significantly help the maritime industry decrease carbon emissions through innovative technologies and digital tools. Here's how:
For instance, the development of chain of custody systems – which allow the emission profile of a zero-emission fuel to be separated from the physical flow of that fuel in a transportation supply chain, can play a major role in accelerating the early phases of shipping’s decarbonisation transition, by ensuring the security, compliance, and integrity of goods during their journey to meet the needs of fuel producers, shipowners, cargo owners and charterers shipping ocean freight.
Transparency is crucial in order to foster sustainability in the transport sector. By embracing data-driven approaches and cutting-edge technologies like blockchain, stakeholders can ensure the tracking of the origin, production, and distribution of sustainable fuels. This heightened transparency fosters accountability, bolsters emissions reduction efforts, and aids in ensuring adherence to regulatory standards, thus significantly contributing to decarbonization initiatives. Our digital traceability solution, MARCO Track & Trace, offers four flagship features that can help in your commitment to sustainability:
We are committed to using digital innovation to help the transport industry achieve sustainable and traceable operations, including data management, data sharing, and traceability; furthermore, we promote sustainable practices, circular product management, responsible manufacturing, and carbon credits.
By integrating these digital solutions, the maritime industry can accelerate its journey towards decarbonization, optimizing operations, and reducing GHG emissions while enhancing operational efficiency and competitiveness.
Throughout this blog on maritime decarbonization, the compatibility of emerging fuels with current infrastructure offers immediate emission reductions but requires scrutiny for sustainability. Their lifecycle emissions must be evaluated, not just their combustion outcomes. Fuels derived from plant matter, waste products, or carbon capture techniques rely on transparent supply chains and tracing of origins and production processes to ensure a lower carbon footprint than traditional fossil fuels.
It is important to remember that while the adoption of sustainable fuels is crucial, it is also essential to explore other decarbonization solutions, such as speed reduction, route optimization, digitized systems, and energy-saving technologies. Additionally, onboard carbon capture and storage and nuclear propulsion should be considered as potential long-term solutions.
In light of these considerations, the collaboration between industry stakeholders, regulatory bodies, and technological innovations is crucial for navigating the complexities of maritime decarbonization. Collective efforts in promoting sustainable fuels, digitalization, and regulatory support pave the way for a greener maritime industry. This transformation is not only an environmental imperative but also a strategic economic shift towards sustainable development in global trade. Maintaining vigilance in supply chain management and promoting transparency are essential.
Contact us to learn how we can optimize resource management and enhance transparency in maritime transport, contributing to global decarbonization.
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