DNV GL’s second Energy Transition Outlook (ETO) forecasts that carbon-neutral fuels will surpass the use of diesel fuels by 2050, following the International Maritime Organization’s (IMO’s) decision in spring to cut carbon emissions by 50% by 2050.
Last year’s initial ETO modelling has been updated for this year’s forecast to account for the latest regulatory developments, as well as technological research and alternative fuels. In addition, the effect of hybridisation and cold ironing will boost the share of electricity in the power mix.
DNV GL’s report accounts for three energy-saving categories – alternative fuels, logistics improvements, and speed reduction – as the main drivers towards the IMO’s 50% reduction target.
“The drivers in our model will progressively decarbonise shipping by 2050. The impact of lower speeds and other logistical measures can be achieved to full effect early in the period up to 2035, as these options can be implemented without renewing the fleet. Beyond 2035, we will see the full impact of gradually improving the energy efficiency of new ships and of the shift to alternative fuels,” the report says.
The 2018 ETO describes the various energy mixes for shortsea and deepsea shipping, with carbon-neutral fuels increasing to 38% of the shortsea mix and electricity achieving 11%, while heavy fuel oil (HFO) and marine gas oil (MGO) use will drop to 27% and liquefied natural gas (LNG) will complete the energy mix with a 23% share of the market.
In the deepsea sector, electricity plays a significantly smaller role, at only 1% of the energy mix, while HFO/MGO and carbon-neutral fuels tie at 38% and LNG will achieve a 23% share.
Combined, the shortsea and deepsea vessels’ energy mix is forecast to comprise 39% carbon-neutral fuels, 33% HFO/MGO, 23% LNG power, and just 5% electricity.
Trade forecasts for the period up to 2050 show a two-part development, with a 39% rise in seaborne trade in trillion tonne-nautical miles per year up to 2030, but only a 2% increase for the subsequent 20 years up to 2050.
This is explained by the higher demand for crude oil and its products up to 2030, with a drop in crude demand thereafter. Bulk will see the biggest jump in demand, with a substantial decrease in the transportation of coal offset by greater demand for iron ore.
In total, world seaborne trade will increase from 55,060 billion tonne-nautical miles per year in 2016 to 72,510 tonne-nautical miles per year in 2030, peaking at 77,230 tonne-nautical miles per year in 2040 and slipping to 76,130 billion tonne-nautical miles per year by 2050.
“One of our key assumptions is that IMO greenhouse gas reduction targets will be met. Beyond 2035, we will see the full impact of gradually improving the energy efficiency of new ships and the shift to alternative fuels. Fuel consumption per tonne-mile will decline by, on average, 30% by 2050. We find that total energy use in international shipping will increase from about 11 exajoules (EJ) to 13 EJ during 2016–35. It will then decrease to 11 EJ in 2050, which equates to nearly 270 million tonnes of oil equivalent,” the report says.
According to DNV GL, “Our Energy Transition Outlook model is designed to forecast the energy transition in 10 global regions. It is a system dynamics feedback model implemented with Stella software and covering the energy system from source to sink.”
Using a demand-driven model in which the main drivers are energy demand and efficiency, with population and GDP and other key elements such as construction, manufacturing, and transportation, the group has established a model that it believes will accurately forecast developments and allow for major shifts in technology and demographics.
Knut Ørbeck-Nilssen, president of Maritime at DNV GL, said, “Shipping will maintain its centrality to global trade and the world economy. But the energy transition and regulatory changes will have a significant impact on the industry. This makes it more important than ever before to examine the regulatory and technological challenges and opportunities of future scenarios.”