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Shipping companies, as with other progressive and awakened corporate citizens, spurred by regulation, customer demand, investor pressure, and internal goals, are probing ways to decarbonize fleets. Greener-fuel possibilities abound in the maritime world, and the industry is in a period of experimentation and exploration to understand the implications of adopting such fuels, according to t note from the respected McKinsey consultancy received by AutoInformed today. (autoinformed.com on: DOJ Thwarts Chinese Takeover of Shipping Containers)
To learn how industry leaders are thinking about future fuels, the Global Centre for Maritime Decarbonisation, the Global Maritime Forum, and the Mærsk McKinney Møller Center for Zero Carbon Shipping conducted a survey (with analytical support provided by McKinsey) of shipping companies. Collectively, these companies own and operate fleets – including container ships, tankers, dry bulkers, gas carriers, car carriers, cruise ships, tugs, and offshore vessels – comprising ~20% of the world’s total capacity.
The view that emerges from respondents’ answers portrays a domain 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,” said Arjen Kersing and Matt Stone in the note.
Some findings from the survey:
- Presently, 46% of surveyed companies (12 respondents) say that they have already run pilot programs involving one or more low-carbon fuels (say, operating ship engines on biodiesel instead of traditional fuel oil) and have established plans for further implementation, whereas 35% (nine respondents) have taken no action regarding greener fuels.
- One-third of respondents say that they “don’t know” which types of fuel they expect their fleets to run on in 2030 and 2050. The remaining two-thirds of respondents express diverging expectations about what their fuel usage will look like. Respondents’ projections for their fleets’ fuel consumption in 2050 are split evenly among a wide variety of options: green ammonia, biodiesel, and fuel oil lead the way with 16 to 17% of the fuel mix each, followed by blue ammonia, liquefied natural gas (LNG), e-methanol, biomethanol, biomethane, and e-methane, each representing a 6 to 10%share.
- Respondents also indicate that they expect to spread their own consumption across multiple fuel “families.” (The fuel families consist of fuels that ship engines can use interchangeably: for instance, one category comprises heavy fuel oil, marine gas oil, marine diesel oil, and biodiesel, while another category comprises LNG, biomethane/bio-LNG, and synthetic/e-methane/e-LNG.) By 2050, 49%of respondents (weighted by fleet size) expect to adopt four or more fuel families within their own fleets, while another 43%expect to adopt three families.
- Making the leap to a greener-fuel future will require decades of work, but our respondents are clear on what they will need to accelerate the transition. More than 80%of respondents indicate that the following four developments would be most transformative: greater availability of alternative fuels, cost reductions for alternative fuels, customer willingness to pay a “green premium,” and regulatory change.
The full report, The shipping industry’s fuel choices on the path to net zero, presents further survey results along with potential takeaways for various stakeholders.
“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,” McKinsey said.
Decarbonizing Shipping Fleets – a Complex, Uncertain Course
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Shipping companies, as with other progressive and awakened corporate citizens, spurred by regulation, customer demand, investor pressure, and internal goals, are probing ways to decarbonize fleets. Greener-fuel possibilities abound in the maritime world, and the industry is in a period of experimentation and exploration to understand the implications of adopting such fuels, according to t note from the respected McKinsey consultancy received by AutoInformed today. (autoinformed.com on: DOJ Thwarts Chinese Takeover of Shipping Containers)
To learn how industry leaders are thinking about future fuels, the Global Centre for Maritime Decarbonisation, the Global Maritime Forum, and the Mærsk McKinney Møller Center for Zero Carbon Shipping conducted a survey (with analytical support provided by McKinsey) of shipping companies. Collectively, these companies own and operate fleets – including container ships, tankers, dry bulkers, gas carriers, car carriers, cruise ships, tugs, and offshore vessels – comprising ~20% of the world’s total capacity.
The view that emerges from respondents’ answers portrays a domain 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,” said Arjen Kersing and Matt Stone in the note.
Some findings from the survey:
The full report, The shipping industry’s fuel choices on the path to net zero, presents further survey results along with potential takeaways for various stakeholders.
“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,” McKinsey said.