Green shipping to increase costs for consumers, report finds

GLOBAL – According to new research by class and assurance society DNV, the shift towards decarbonisation will lead to significant increases in shipping expenses, with container vessels facing a rise in costs by 91-112%.

The cost of container shipping is expected to more than double as the industry moves toward meeting the International Maritime Organization’s (IMO) 2050 carbon-neutral target.

The findings, published in DNV’s annual Maritime Forecast to 2050 report, highlight the financial impact of achieving full-scale decarbonisation in the maritime sector.

The report emphasizes that the new technologies and fuels required for this transition will raise the costs of seaborne transport, which will inevitably be passed on to consumers through higher prices for goods.

“Overall, the new technologies and fuels necessary for decarbonisation increase costs of seaborne transport, and these costs must be moved through the value chain to the consumer,” the report states.

The IMO has set clear targets: a full-scale decarbonisation by 2050, a 20% emissions reduction by 2030, and a 70% reduction by 2040.

However, the path to achieving these goals remains complex. “The decarbonisation of shipping is a complex puzzle with many different solutions,” said Knut Ørbeck-Nilssen, CEO of DNV’s maritime division.

He stressed the importance of making smart decisions and strategic investments now to set the stage for significant emissions reductions in the future.

One of the key measures in this effort is the European Union’s FuelEU Maritime Regulation, which will come into effect next year.

This regulation will impose a well-to-wake greenhouse gas intensity requirement on annual energy usage, essentially mandating the use of low GHG fuels.

However, the IMO is negotiating an option to allow compliance pooling across several ships, potentially reducing the cost of decarbonisation by 6%.

As the maritime industry moves towards cleaner fuels, there has been a noticeable trend in orders for larger ships capable of running on more than one type of fuel.

Along with liquefied natural gas (LNG), methanol, and liquefied petroleum gas-driven (LPG) ships are gaining popularity, while ammonia fuel capability is also emerging.

Despite these advancements, the report highlights the need for a substantial increase in global carbon-neutral fuel production to meet the IMO’s 2030 goal of a 20% reduction in CO2 emissions from shipping, relative to 2008 levels.

DNV estimates that shipping fuel consumption could be reduced by 4%-16% through operational and technical energy efficiency measures.

The scale of these emissions reductions will influence the extent of infrastructure development required for carbon capture and storage.

“The headwinds are strong, and a cloud of uncertainty still obscures how a fully decarbonised global fleet will look in 2050,” Ørbeck-Nilssen said, underscoring the challenges ahead as the industry navigates the complexities of achieving a carbon-neutral future.