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DNV report says Maritime Energy Transition is Gaining Speed

More than 1000 ships are expected to be ordered per year through 2030, and with growing pressure on the shipping industry to decarbonize, the shipowners must be careful with fuel selection and ship design, as a misstep here can have damaging consequences in the future.

This is according to the latest Maritime Forecast to 2050 launched Tuesday by DNV.

DNV stressed that shipping decarbonization was no longer just a top priority for the International Maritime Organization (IMO), but for the regional and national legislators, too, as well as for bankers and investors, which are all calling for a faster energy transition in the shipping world, fueled by public pressure.

However, DNV said, perhaps the most influential actor in the push for shipowners to strive forward net zero is the one paying for the shipping services – in most cases, the cargo owner. 

“The cargo owners are themselves subject to expectations from their customers throughout the supply chain which ultimately ends with the consumers, and from finance institutions and investors. This has led to major cargo owners announcing very ambitious decarbonization targets, with some aiming for carbon-neutral or carbon-positive impact by 2040, or even by 2030,” DNV said.

While IMO’s GHG Strategy, which will see the first wave of regulations take effect from January 1, 2023 (i.e. EEXI, CII), is expected to have a significant impact on the design and operations of all ships, DNV expects commercial pressure to push shipowners to aim for a leading position in decarbonization, rather than fulfilling a bare minimum requested by regulations.

“…We expect that poorly performing shipping companies will be less attractive on the charter market and may also struggle to gain access to capital,” DNV said.

Knut Ørbeck-Nilssen, DNV Maritime CEO, says it is “the grand challenge of our time,” for a shipowner to successfully navigate the dual challenge of increasingly stringent climate change targets and regulations coupled with uncertainty over future fuel choices, technology, and supply.

“Choosing the right fuel today for operations tomorrow is a daunting task that all owners must face up to,” said Ørbeck-Nilssen. “The business environment is changing in line with the natural one, leading not just to increased regulatory requirements, but also to new cargo-owner and consumer expectations and more rigorous demands from capital investors and institutions.

“When it comes to alternative fuels, I’m a big fan of the French philosopher, Voltaire: ‘Let’s not make perfect the enemy of good.’ Maybe, we don’t have the perfect solution, but it’s certainly important to start moving in the right direction and then we will gain speed and reach the targets.”
Knut Ørbeck-Nilssen, 
DNV Maritime CEO. Photo courtesy DNV

According to DNV’s report, the maritime energy transition is gaining momentum, with around 12% of newbuilds currently ordered with alternative fuel systems – with LNG leading the way.

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