Decarbonising shipping could double cost of transporting goods by containers: DNV

Ahead of next week’s SMM, the world’s largest shipping exhibition, DNV has released its latest Maritime Forecast to 2050, a 72-page publication now in its eighth edition. The in-depth report provides an updated outlook on regulations, drivers, technologies and fuels needed for maritime decarbonisation, including four scenarios exploring conditions that could accelerate the adoption of specific fuels and technologies by 2050. The study emphasises that regardless of which direction the industry’s decarbonisation journey takes, it will come at a significant cost. The four simulated scenarios project these cost increases per transport work; with estimates ranging from 69-75% for bulk carriers, 70-86% for tankers, and 91-112% for container vessels. “Our latest analyses show that decarbonising shipping could double the cost of transporting goods by containers”, said Eirik Ovrum, lead author of Maritime Forecast to 2050. “Ultimately, the rising costs of seaborne transport will need to be passed down the value chain and the market is already seeing trends towards shifting these costs to end-users.”

The whole shipping supply chain has been debating at events around the world who will pay for the costs of decarbonisation.

At TPM, container shipping’s top event, in Long Beach last year, Jeremy Nixon, the CEO of Japanese liner Ocean Network Express (ONE), told delegates the cost of fuel for containerships stood at about $1,000 per feu.

“That’s roughly what the cost component is of using carbon fuel. These new fuels are going to be two or three times more expensive. So, potentially $2,000-3,000 will be the future fuel cost of moving a 40-foot container,” Nixon said.

To reach IMO’s 2030 decarbonisation goals shipping will need between 7m and 48m tons of carbon-neutral fuels, DNV is forecasting. However, with the global cross-sector production of carbon-neutral fuels expected to reach only between 44m and 63m tons by 2030, it will be near impossible for shipping to secure its required share, DNV warned yesterday 29 august.

Unveiling the Maritime Forecast to 2050, Knut Ørbeck-Nilssen, DNV Maritime CEO, said: “While we are currently witnessing a slowdown of decarbonisation in shipping, we are entering an era of unprecedented technological exploration that will drive progress forward. With carbon-neutral fuels in short supply, smart decision-making and strategic investments today are crucial to lay the foundations for future emissions reductions. Prioritising energy efficiency, leveraging technological solutions, and embracing digitalisation are key steps towards reducing the extra cost burden and achieving our decarbonisation goals.”