Page 28 - 2022 - Q2 - Minerva in Focus

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) IN SHIPPING
The Decarbonization Challenge TURN

UNCERTAINTY

These days, shipowners and operators
are facing the big challenge of decar-
bonization. The shipping industry is
already working hard, but a lot must
still be done to turn the carbon curve
towards zero.

Increasing decarbonization regula-
tions and broader industry-imposed
requirements

The regulatory frame and industry pressures
are mounting, motivating innovation and in-
dustry collaboration to move forward.
The International Maritime Organization (IMO)
introduced the goal to reduce carbon intensity
by at least 40% by 2030 and 70% by 2050 and
reduce the total annual greenhouse gas (GHG)
emissions from international shipping by at
least 50% by 2050 compared to 2008 and work
towards phasing them out as soon as possible
within this century.
In July 2021, the European Commission The pathway towards decarbonization plemented many measures to eliminate
launched its Fit for 55 package of proposals carbon emissions, such as optimized hull
intended to reduce the EU’s total GHG emis- Finding the right pathway toward decar- lines, more efficient/green engines, etc.
sions by 55% by 2030, paving the way for full EU bonization will be the key to sustained Existing ships need to start taking more
decarbonization by 2050. The Fit for 55 package success for shipowners and operators. impactful measures. To comply with the
affects all industrial sectors, including shipping. While the biggest impact on decarboniza- IMO Carbon Intensity Indicator (CII), about
The regulations are already impacting the de- tion will be the choice of fuel and energy 40% of the world’s tankers and bulkers will
sign and operations of all ships. converter, these fuel and technology shifts have to start implementing decarbonization
However, commercial pressure may incentivize must go together with the greater energy measures from 2023 to remain compliant.
shipowners to aim higher, especially if poor efficiency of ships, requiring intensified If no improvements are implemented, this INTO
performers become less attractive on the char- uptake of both technical and operational percentage is estimated to increase to about
ter market and struggle to access capital. energy-efficiency measures. 50% in 2026. The situation is more critical for
We expect three key fundamentals – regula- Existing decarbonization measures can container vessels, as about 55% of the world
tions and policies, access to investors and cap- reduce carbon intensity as shown below: fleet will have to start taking decarbonization CONFIDENCE
ital, and cargo-owner and consumer expecta- measures from 2023. This percentage will rise
tions – to drive through the 2020s and onward. • Speed reduction, operational logistics: to about 70% in 2026 if no measures are taken.
> 20%
• Hydrodynamics (cleaning, coating, hull The road ahead
form optimization, etc.): 5–15%
• Machinery (machinery improvements, Getting to zero-carbon emissions is the great
waste heat recovery, de-rating, battery challenge of our time. Decarbonization is
hybridization): 5–20% a shared responsibility that will require co-
• Use of alternative fuels (LNG, LPG, am- operation across and beyond the maritime
monia, etc.): 0–100% industry. The industry requires support in
terms of developing new fuels, technologies,
Newbuildings ordered and delivered in and effective operation means to assist in
recent years have considered and im- reaching the set decarbonization goals. For the maritime industry, this is more than a moment of change. It’s a time for transformation.
Never have the decisions it faces been so complex. Nor their consequences ever mattered more.
As a trusted voice of the industry, we help decision-makers throughout the maritime world to make

by Loizos Isaias,PhD., purposeful and assured choices. From regulatory compliance, next generation fuels, vessel and
Head of Maritime Service Centre, operational optimization, to in-depth advice and insight, explore our solutions.
DNV Maritime

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