DNV Maritime Forecast 2050 2022-Final PDF

MARITIME
FORECAST
TO 2050
Energy Transition Outlook 2022

DNV Maritime Forecast to 2050
FOREWORD
Let me start with the positive news: newbuild orders

and recent industry projects prove that the maritime
energy transition is accelerating. The necessary
practical considerations are taking shape, and ship-
owners have started to future-proof their assets.
Applying our Carbon-Risk Framework, launched back
in 2020, has also contributed to robust, cost-efficient
ship designs. sustainable shares in the 2050 fuel mix – be it biofuels,
e-fuels, or fossil fuels with carbon capture and storage
Encouragingly, newbuild vessels are increasingly being – relies on sound global industry decisions and collabo-
ordered ready to run on alternative fuels, with LNG ration. The maritime industry must continually seek
dominant for now. Substantial investment is going into consensus with other industries to ensure that sustain-
researching safe and economically feasible alternative able energy resources are directed to where they can
carbon-neutral fuels and into developing fuel technolo- reduce greenhouse gas emissions most.
gies. But this will count for little if the industry and its
stakeholders do not collaborate to overcome the Already by 2030, 5% of the energy for shipping should
ultimate hurdle, fuel availability. come from carbon-neutral fuels, requiring huge
investments in onboard technologies and onshore
Our 6th Maritime Forecast to 2050 report zeroes in on infrastructure. Navigating the options is complex, not
this key issue and outlines under what conditions each least because there is no single ‘winner-takes-all’
new fuel type will proliferate. Which of them capture alternative fuel and technology. Our updated model-
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Foreword
ling points to a diverse future energy mix of carbon- If we push towards full decarbonization by 2050, the
neutral and fossil fuels, with the latter gradually phased fuel infrastructure needs to deliver around 270 million
out by 2050. tonnes of alternative fuels according to our modellings.
A mammoth challenge. However, I am convinced that,
We should use all available options to progress towards together we can build a better, greener maritime
and reach net zero. Our findings reinforce the need for future.
strong alliances to push the development of supply
chains that can ensure fuel availability. The entire I hope that you enjoy reading the report and find value
maritime value chain – charterers, energy majors, fuel in its research findings for decision-making and strate-
suppliers, governments, financiers, ports, and shipown- gizing.
ers – should collaborate to ensure adequate funding and
apply it to the right projects. Green shipping corridors
can serve as launch pads, also reducing the risk of port
infrastructure becoming obsolete as the fuel mix shifts.
En route to decarbonization targets, employing the full

power of digital tools for more energy-efficient vessels
can deliver up to 15% of GHG emission savings required
by 2050. Many such tools are available, and I am Knut Ørbeck-Nilssen
confident that even more promising ones will be
CEO Maritime, DNV
launched in the coming decades.
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CONTENTS
Foreword2 5 Pathways for decarbonization of shipping 56
Executive Summary 6 5.1 Updated GHG Pathway Model 58
1 Introduction16 5.2 Exploring decarbonization scenarios 60

5.3 Scenario results 61
2
Outlook on drivers and regulations for
decarbonization 20 5.4 Emissions reduction contribution
by measure 67
2.1 Regulatory developments 24 5.5 Fuel families’ contribution to the
2.2 Well-to-wake GHG emissions and 2050 energy mix 67
sustainability of fuels 27 5.6 Investment needs 69
2.3 The need for standards to support 5.7 Exploring the effect of first movers
decision-making and funding 28 and increased availability of fuels 71
3 Outlook on ship technologies and fuels 30 Appendix73

3.1 Available ship technologies and A.1 Regulatory input 73
fuels for decarbonization of shipping 32
A.2 Projection on fuel prices 74
3.2 Status of fuel transition 34
A.3 Energy-efficiency measures 76
3.3 Outlook for the readiness of
onboard fuel technologies 35 A.4 Speed reduction 76
3.4 Digitalization – enabling the transition 41 A.5 Logistics 77

A.6 Trade growth 78
4
Outlook on alternative fuel production A.7 Converter options, maturity,
and infrastructure 44 and compatibility 79
4.1 Existing fuel supply chain 47 A.8 Newbuild and retrofit fuel
technology Capex 80
4.2 Future energy supply chains –
and main barriers 48 A.9 New features of our model 81
References82
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Contents
5
6
EXECUTIVE SUMMARY
7
8
Executive summary
EXECUTIVE SUMMARY
Maritime Forecast to 2050 is one out of DNV’s suite of Maritime regulation which aims to increase the use of
Energy Transition Outlook reports. This latest edition carbon-neutral fuels through an increasingly stringent
provides an independent outlook of the maritime energy well-to-wake GHG intensity requirement. These
future and examines how the energy transition will affect proposals may be finally adopted later in 2022 and take
the industry. The focus is on fuel availability and infra- effect from 2024 and 2025, respectively.
structure to tackle the shift to carbon-neutral1 fuels. Our — The regulatory and commercial drivers are enabled by
updated scenario analysis provides significant new supporting frameworks and standards specifying, for
insights compared with our 2020 analysis. example, the setting of science-based, net-zero GHG
emissions targets; taxonomies for sustainable activi-
The maritime industry will go through a period of rapid ties; sustainability evaluation criteria and calculation
energy and technology transition that will have a more methods for the well-to-wake GHG emissions of fuels;
significant impact on costs, asset values, and earning and supply-chain emission reporting requirements.
capacity than many earlier transitions. Shipowners are
already experiencing increasing pressure to reduce the Figure 1 shows an overview of adopted and proposed
greenhouse gas (GHG) footprint of maritime transport. regulations from the IMO and the EU.
This pressure is being exerted by three fundamental
regulatory and commercial drivers: regulations and Responding to the drivers for decarbonization, shipown-
policies, access to investors and capital, and cargo owner ers will need to apply new technologies and fuels to
and consumer expectations. reduce emissions. This report provides an updated
outlook on ship technologies and fuels, with an updated
Our updated outlook for these drivers shows that: timeline for the technology readiness levels of selected
alternative fuel technologies, including onboard carbon
— The Initial IMO Greenhouse Gas Strategy (‘the IMO capture and storage (CCS).
Strategy’) currently drives policy development within
international shipping, and the next wave of regulations We find that:
will take effect from 1 January 2023. They are the CII,
EEXI, and SEEMP Part III.2 We expect them to have a — The trend of larger ships being ordered with alternative
significant impact on design and operations of all ships. fuel propulsion is continuing, with fossil LNG as the
— The IMO Strategy will be revised in 2023, possibly dominant fuel (see Figure 2). Around 5.5% of the total
strengthening its emission-reduction ambitions. This gross tonnage of ships operating today, and a third
will be followed by developing the next wave of (33%) of the gross tonnage on order, can or will be able
regulations including market-based measures setting a to operate on alternative fuels. This includes liquefied
price on CO2 and a requirement to account for well-to- natural gas (LNG) carriers. The uptake of methanol and
wake GHG emission intensity of fuels.3 liquefied petroleum gas (LPG), and the first hydro-
— The EU has proposed to include shipping in the EU gen-fuelled newbuilds, are starting to show in the
Emissions Trading System (EU ETS) and the FuelEU statistics.
1 Fuels that have no net GHG emissions; see Intergovernmental Panel on Climate Change (IPCC) definition of carbon-neutral at https://www.ipcc.ch/sr15/chapter/glossary
2 Carbon Intensity Indicator (CII); Energy Efficiency eXisting ship Index (EEXI); Ship Energy Efficiency Management Plan (SEEMP)
3 W
ell-to-wake refers to the assessment of GHG emissions from primary production to carriage of the fuel in a ship's tank (well-to-tank, or ‘upstream emissions’) and from
the ship's fuel tank to the exhaust (tank-to-propeller or tank-to-wake, or ‘downstream emissions’). See https://www.imo.org/en/MediaCentre/HotTopics/Pages/Cut-
ting-GHG-emissions.aspx
9
— The strong interest in ammonia as fuel, as reflected in tation of safety regulations. The toxicity of methanol
concepts and pilot studies, is currently restricted by and ammonia, and extreme flammability of hydrogen,
immature converter technologies. brings new safety challenges.
— Ammonia and hydrogen onboard fuel technologies — There is increased interest in using onboard CCS with
will be available in three to eight years, according to conventional fossil fuels because of significant
our estimates. For ammonia, we see development of barriers to the uptake of carbon-neutral fuels.
2-stroke and 4-stroke engine technologies on parallel Onboard CCS may be applicable for some ship
paths, enabling uptake in deep-sea and regional segments depending on regulatory and land-based
short-sea shipping. infrastructure developments. More demonstration
— Short-sea shipping is expected to be instrumental for and pilot projects will be needed to enhance the
maturing hydrogen technology. Consequently, the technology readiness of onboard CCS. Several
development of fuel cells and 4-stroke engines is ongoing R&D projects address barriers to implemen-
ahead of other hydrogen energy converters. tation.
— The current technology readiness levels of methanol
fuel technologies are higher than for ammonia and This report also provides an outlook on alternative fuel
hydrogen. production and infrastructure. Decarbonizing shipping
— Using new fuels and fuel technologies will require all will result in a profound transition in the way future
maritime industry stakeholders to focus increasingly marine fuels are produced and made available to the
on safety, including the development and implemen- shipping fleet.
Figure 1
IMO and EU regulatory framework for GHG emissions reduction from international shipping
EU Emissions Trading System FuelEU Maritime IMO – adopted

Global market-based measure Global GHG fuel standard IMO – proposed
• Addresses: Ship/fleet GHG emissions • Addresses: Fuel well-to-wake EU – proposed
• Applicable measures: All GHG GHG intensity (Fit for 55)
reduction measures • Applicable measures:
Alternative fuels, shore Operational
power, wind requirement
Design
Fleet emissions requirement
GHG price
FUEL
Carbon Intensity Indicator Ship Energy Efficiency EEDI/EEXI

Management Plan
• Addresses: Actual carbon intensity • Addresses: Ideal carbon intensity
©DNV 2022
• Applicable measures: All measures • Addresses: Continuous improvement • Applicable measures: New ships:
except logistics • Applicable measures: All measures Hull, machinery, LNG, speed;
except logistics Existing ships: Speed, basic hull
improvements
©DNV 2022
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Executive summary
We find that: emissions. To maximize the GHG reduction potential

of sustainable biomass – potentially an important
— Shipping’s future fuel market will be more diverse, source for carbon-neutral drop-in fuels for conven-
reliant on multiple energy sources, and more intercon- tional machinery – this should be reserved for hard-to-
nected and integrated with regional energy markets, abate sectors like shipping and aviation, rather than for
regional energy production, and regional industry. electricity production.
— Future fuel supply for shipping will rely on availability — Provided that energy can be made available, produc-
and price of the energy sources: renewable electricity, tion capacity will be a barrier and must be scaled up to
sustainable biomass, or fossil energy with CCS (see meet shipping’s coming demand for carbon-neutral
Figure 3). Availability may constrain the coming energy fuels. This will require massive investment, though
transition in shipping. some existing production facilities can be reused. For
— Because no industry can decarbonize in isolation, the various fuel production and supply paths, the focus
global industries need to make the right choices should be on reducing energy losses in production,
together, and sustainable energy should be directed distribution, and conversion on board. Developing the
to where it has the biggest impact on reducing necessary infrastructure and production capacity will
Figure 2
Alternative fuel uptake in the world fleet by number of ships and gross tonnage
NUMBER OF SHIPS
Ships in operation 11 Methanol Ships on order 3 Hydrogen
19 LPG 35 Methanol
98.8% 396 Battery/Hybrid 78.9% 57 LPG
conventional conventional 417 Battery/Hybrid
fuel fuel
World fleet 923 LNG Order book 534 LNG
1 349 Total 1 046 Total
IN % OF GROSS TONNAGE
Ships in operation 0.02% Methanol Ships on order 0.02% Battery/Hybrid
0.06% LPG 1.45% Methanol
94.5%
0.06% Battery/Hybrid 66.8%
1.52% LPG
conventional conventional
fuel 5.39% LNG fuel 30.2% LNG
World fleet Order book
5.5% Total 33.2% Total

©DNV 2022
Key: Liquefied natural gas (LNG); liquefied petroleum gas (LPG)

Sources: IHSMarkit (ihsmarkit.com) and DNV’s Alternative Fuels Insights for the shipping industry – AFI platform (afi.dnv.com)
©DNV 2022
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Figure 3
The future carbon-neutral energy supply chain
Bio
Electro
Blue
CO2
12
Executive summary
take time, be costly, and involve many stakeholders in — variations for specific fuel types, in which key input
the supply chain. factors impacting the relative cost differences
— Co-operation with major energy and fuel providers will between fuels within each family are examined.
be important to supply the future fuels. Ports will play
key roles in the green maritime transition by serving as Regarding the future fuel mix in the modelled scenarios
energy hubs providing both shore-side electricity and (Figure 4), we find the following:
infrastructure for storing and fuelling ships with future
fuels, as well as supporting the first movers and — Regulatory policies and primary energy prices are key
establishing green energy corridors. drivers for uptake of carbon-neutral fuel and the
future fuel mix. The uptake of carbon-neutral fuel
This year we present an updated portfolio of scenarios, needs to pick up in the mid-2030s, reaching 40% of
built with an enhanced version of our GHG Pathway the fuel mix in 2050 under the current IMO ambitions
Model to explore the fuel transition that shipping is and 100% to decarbonize shipping fully. Fossil very
facing. We investigate how the future fuel mix and low sulphur fuel oil (VLSFO)/marine gas oil (MGO)
uptake of carbon-neutral fuels are impacted by the and LNG are in rapid decline by mid-century or are
availability of energy sources and other key inputs for phased out completely in the most ambitious decar-
fuel production, and by price assumptions on emerging bonization scenarios. LNG, however, sees significant
fuels, technologies, and retrofits. We also assess fuel uptake to around 20% to 30% of the fuel mix prior to
costs regionally, and how the build-up of regional fuel the acceleration of the transition to carbon-neutral
production and infrastructure impact the development fuels. Figure 4 presents the energy mix in 2050 for the
of the fuel mix. 24 modelled scenarios.
— It is hard to identify clear winners among the many
Significant uncertainties around several factors influ- different carbon-neutral fuel options given the
ence our projected energy transition from conventional uncertainties on price and availability, but we can
to carbon-neutral fuels. Considering these uncertain- outline under what conditions each will proliferate.
ties, which preclude developing a single ‘most likely’ Bio-LNG, bio-MGO and bio-methanol, which are
projection, we have developed and provide a set of relatively energy-dense hydrocarbons, would be the
scenarios. Each describes a possible development of preferred fuels, given sufficient availability of sustain-
the future fleet composition, energy use and fuel mix, able biomass. The uptake of bio-methanol is very
and emissions to 2050, under a particular set of framing sensitive to the production cost compared with
conditions, and without prejudging the likelihood of bio-MGO and bio-LNG. With low availability of
these conditions. sustainable biomass, the prices of biofuels will likely be
uncompetitive with those of electrofuels and blue
We have developed 24 scenarios to explore: fuels.
— The availability of electrofuels depends firstly on the
— two decarbonization pathways, one in which shipping availability of renewable electricity to produce hydro-
achieves the ambitions set in the current IMO GHG gen by electrolysis. This requires the phasing out of
Strategy, including a 50% reduction of total GHG fossil energy from power generation, which is still a
emissions in 2050; and a second, in which the ambition long way off in most regions. Using electricity even
is to decarbonize the fleet by 2050. partly generated from fossil fuels to produce electro-
— variations on three fuel families, in which we simulate fuels is not energy efficient and could lead to higher
the availability of sustainable biomass to produce net emissions. The second prerequisite for electrofu-
biofuels, renewable electricity to produce e-fuels, and els is the availability of sustainable carbon from either
fossil fuels combined with CCS to produce blue fuels. biogenic sources or direct air capture. This carbon
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could be combined with the hydrogen produced by fuel, with bio-MGO or e-MGO being used as pilot
electrolysis to produce e-MGO4, e-LNG, or e-metha- fuels.
nol, again taking advantage of using more ener- — The availability of blue fuels depends on the effective-
gy-dense fuels. Without this carbon being available ness of carbon capture, as well as infrastructure for
and affordable, e-ammonia would be the preferred permanent storage of the captured carbon. With high
4 The prefix ‘e-‘ denotes an electrofuel, ‘bio-‘ a biofuel, and ‘blue’ a fuel produced from fossil energy with CCS
Figure 4
Figure 4
Our 24 scenarios for the maritime energy mix in 2050
1 Fossil fuels
1 Fossil fuels
2 HFO+scrubber
2 HFO+scrubber
LSFO+MGO
3 LSFO+MGO
3 LNG
4 LNG
4
5 Biofuels
5 Biofuels
6 bio-MGO
6 bio-MGO
bio-LNG
7 bio-LNG
7 bio-methanol
8 bio-methanol
8
9 Electrofuels
9 Electrofuels
10 e-MGO
10 e-MGO
e-LNG
11 e-LNG
11 e-NH3
No.
e-NH3
No.
12
e-methanol
Scenario
12
e-methanol
Scenario
13
13
14 Blue fuels
14 Blue fuels
blue NH3
15 blue NH3
15
16
16 Electricity
Electricity
from grid
17
17 from grid
18
18
19
19
20
20
21
21
22
22
23
23
24
24
©DNV 2022
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Key: Ammonia (NH 3); biofuel (bio-); electrofuel (e-); fossil fuel with CCS (blue); heavy fuel oil (HFO); liquefied natural gas (LNG);
Key: Ammonia
low sulphur fuel(NH ); biofuel
oil 3(LSFO); (bio-);gas
marine electrofuel
oil (MGO)(e-); fossil fuel with CCS (blue); heavy fuel oil (HFO); liquefied natural gas (LNG);
low sulphur fuel oil (LSFO); marine gas oil (MGO)
©DNV 2022
14 ©DNV 2022
Executive summary
availability, blue ammonia is the preferred fuel, with Concluding remarks

bio-MGO or e-MGO as pilot fuels. Mature CCS The initial preparation for decarbonization is well under-
technology and infrastructure could also make way with regulatory and commercial drivers and a
onboard CCS a viable alternative where fossil fuels supporting framework coming into place. Scrutiny is
continue to be used on the ship. focused on full supply-chain emissions, including from
— The use of drop-in fuels – such as bio-LNG, e-LNG, ships and the production and supply of fuel. We see
bio-MGO and e-MGO – is significant in all scenarios progress in onboard fuel technology development, and
and depends on the pace of decarbonization. With the fleet’s uptake of alternative fuels is increasing.
slower decarbonization with moderate operational However, several fuel technologies that may be needed
requirements, fossil fuels combined with just the in 2050 are immature.
required amount of drop-in fuels are preferred to
switching to ammonia or methanol fuel systems, even More effort is needed to bring down barriers and speed
though these fuels are likely less expensive than the up the progress of next-generation carbon-neutral ships.
drop-in fuels. This will require accelerated technology development,
large-scale piloting for deep-sea vessels, and ensuring
Significant investment is needed in coming decades to safe application of new fuels on board and onshore.
enable the transition to carbon-neutral shipping. We find Stronger emphasis is needed on system-level thinking
that: and integration of all available technologies. This will
require time, investment, and combining efforts from all
— USD 8 billion (bn) to 28bn is needed annually in stakeholders in the maritime supply chain. Green energy
additional total investment on ships in a transition corridors, a concept taking shape now, could support this
phase towards decarbonization in 2050. The largest effort by pairing commitments on fuel supply and
investments come in scenarios with high uptake of demand, and reducing first-mover risk. The idea is to help
ammonia or methanol. start shipping decarbonization by increasing the avail-
— Fuel infrastructure investments will outpace onboard ability of alternative fuels in connected regions.
investments in almost all scenarios. Decarbonizing
shipping completely by 2050 will require about Shipowners and other stakeholders – such as govern-
2.5 times more investment than if pursuing current ments, charterers, ports and fuel suppliers – can use our
IMO ambitions. About USD 28bn to 90bn per year is 24 scenarios to support decision-making to minimize
needed onshore to scale up production, fuel distribu- carbon risk and explore effective policy interventions
tion, and bunkering infrastructure to supply 100% such as green corridors. Uncertainty over the price and
carbon-neutral fuels by 2050. The largest investments availability of energy sources means that fuel flexibility
come in scenarios with high uptake of electrofuels. and Fuel Ready solutions, combined with improved
— The more expensive energy sources and onshore energy efficiency, remain key strategies that could ease
investments could increase the annual fuel costs by the transition and minimize the risk of investing in
more than USD 100bn to 150bn when fully decarbon- stranded assets. Digitalization will enable the unlocking
ized, a 70% to 100% increase from today. of further energy-efficiency potential and will support the
necessary collaboration and information sharing needed
to accelerate the transition.
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1
INTRODUCTION
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1 INTRODUCTION
This publication is part of DNV’s 2022 suite of Energy Transition
Outlook reports. This latest edition of Maritime Forecast to 2050
gives an independent outlook of the maritime energy future and
examines how the transition will affect the industry. It provides
valuable insights for decision makers ranging from shipowners,
charterers, fuel suppliers, ports, finance and insurance, through to
national and regional policymakers.
18
Introduction CHAPTER 1
More specifically, the outlook focuses on fuel availability investments are needed during the next decades to
and infrastructure to tackle the shift to carbon-neutral5 enable the transition. While the industry has been
fuels. We significantly update our 2020 scenario analysis discussing emissions reduction for many years, the most
of the maritime energy future (DNV, 2021c; DNV, 2020) as likely solutions still face challenges and barriers including
shipping experiences increasing pressure to decarbonize – the focus of this year’s study – fuel availability. DNV’s
operations and reduce emissions to air. Regulatory alternative fuel uptake analysis indicates that the transi-
requirements addressing greenhouse gas (GHG) emis- tion has started slowly, with 33% of gross tonnage in the
sions take shape in both the IMO and EU, and are enabled order book able to operate on alternative fuel (heavily
by supporting frameworks and standards. Examples of dominated by LNG).
these enablers are: setting science-based net-zero GHG
emissions targets; taxonomies for sustainable activities; In this year’s report we have updated our scenario library
sustainability evaluation criteria and well-to-wake GHG of regulations, future technologies, and costs, to under-
emission calculation methods for fuels; and supply chain stand the coming transition so that stakeholders can
reporting requirements. Most notably, in April 2018 the make informed decisions. We have modelled two
IMO adopted an ambitious GHG emissions-reduction different decarbonization pathways: the current IMO
strategy for international shipping. 2023 will see the ambitions to 2050, and a full decarbonization by 2050.
implementation of further regulatory measures to We refer to these henceforth as IMO ambitions and
address the decarbonization of shipping. In November Decarbonization by 2050. Our decarbonization model-
2021, the IMO Marine Environment Protection Commit- ling shows a diverse energy mix comprising both fossil
tee’s 77th session (MEPC 77) also recognized the need to and carbon-neutral fuels, where fossil fuels are gradually
strengthen the ambitions of its GHG strategy when it is phased out by 2050.
revised in 2023. Increasingly, we also see key stakehold-
ers such as banks and cargo owners focusing on decar- This report starts by presenting updated outlooks on
bonization. All this points to a changing business drivers and regulations (Chapter 2) then ship technolo-
environment for ships in the near future, shaping the gies and fuels (Chapter 3), with estimated maturation
future fleet in important ways, particularly in the choice of timelines for energy converters, onboard CCS technolo-
fuels and technologies. gies, and corresponding safety regulations for onboard
use. We introduce an entirely new outlook on alternative
In contrast to past environmental requirements, meeting fuel production and infrastructure, including availability
GHG targets requires fundamentally more challenging and prices from the updated Marine Fuel Price Mapper
technological and operational changes for shipping. In (Chapter 4). These chapters provide input to our updated
previous transitions, the industry moved from wind to world fleet scenario modelling (Chapter 5), including
coal and steam, and then to oil – and every ship made the modelling of the impact of measures to increase regional
same transition. For the transition now underway, there availability, such as green corridors.
are many options for carbon-neutral fuels (bio, electro, or
blue), such as ammonia, diesel, electricity, hydrogen,
methane and methanol – all ships will probably not
transition to the same fuel. The existence of many
transition pathways is driving complexity. The challenges
include a transition to new and alternative low or
zero-carbon fuels and non-conventional technologies.
This requires the simultaneous introduction of new
technologies on ships and low or zero-carbon fuel
production and infrastructure onshore, where significant
5 Fuels that have no net GHG emissions; see Intergovernmental Panel on Climate Change (IPCC) definition of carbon-neutral at https://www.ipcc.ch/sr15/chapter/glossary
19
Highlights
Three key fundamentals are driving ship decarboniza- — We provide an updated outlook and timeline for
tion: regulations, cargo owner expectations, and regulatory developments impacting the maritime
access to capital: sector.
— We explore how evaluating well-to-wake GHG emis-

sions and sustainability of fuels becomes important to
avoid unintended emission increases from other
sectors.
— We assess the need for investments on board and

onshore to decarbonize shipping and explore why
clear frameworks and standards are needed to
accelerate and improve decision-making.
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2
OUTLOOK ON
DRIVERS AND
REGULATIONS FOR
DECARBONIZATION
2.1 Regulatory developments 24

2.2 Well-to-wake GHG emissions and sustainability of fuels 27
2.3 The need for standards to support decision-making and funding 28
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2 OUTLOOK ON DRIVERS AND REGULATIONS

FOR DECARBONIZATION
2023 will see the implementation of further regulatory measures to address

the decarbonization of shipping. The IMO GHG Strategy will be revised,
strengthening the GHG emissions-reduction ambitions for international
shipping. Standards for calculating and verifying lifecycle emissions of
marine fuels are maturing. Expectations from cargo owners and financial
institutions continue to be strong drivers for ship decarbonization with
increased requirements on transparency and reporting of emissions
throughout the supply chain.
In this chapter, we first summarize the latest develop- Following up on these decisions, 2022 is a working year in
ments on drivers and regulations for decarbonization the IMO and EU with multiple ongoing regulatory
since our last report in September 2021. This is followed processes developing frameworks and standards that
by more details on the latest regulatory developments will shape shipping in the next decades. Late in 2022 or
from the IMO and EU before we take a closer look at two early 2023 we expect the final agreed proposals from the
themes related to drivers. One is taking a closer look at EU to be adopted. In June 2023, the IMO will hold a key
lifecycle perspective on GHG emissions. The other is the meeting – MEPC 80 – that will adopt a revised GHG
need for standards to support decision-making and the strategy and shortlist regulatory measures that will set
funnelling of capital for decarbonization projects. requirements on individual ships to ensure that the
ambitions are met. These could include both technical
2021 saw significant developments on the regulatory requirements and market-based measures. 2022 may
arena with the IMO’s adoption of carbon intensity also see the first version of IMO guidelines for calculating
requirements –the CII, EEXI, and SEEMP6 – and the EU lifecycle GHG emissions for marine fuels. The green
announcing its Fit for 55 package7 including several corridors concept will be transformed into actual actions
proposals impacting ships directly. On the margins of through concrete projects such as the Nordic Roadmap
COP268, several high-level declarations underscored the for the introduction of sustainable zero-carbon fuels in
continued push from a wide range of stakeholders to shipping9, and the C40 Green Ports Forum10.
work towards shipping’s decarbonization in 2050,
including the establishment of green corridors to focus Pressure and expectations from cargo owners, financial
on actions and resources. As mentioned earlier, MEPC 77 institutions, and other stakeholders continues to increase,
also recognized the need to strengthen the ambitions of and is enabled by the establishment of a wide range of
the IMO’s GHG strategy when it is revised in 2023. frameworks, standards, and requirements. The Poseidon
6 Carbon Intensity Indicator (CII); Energy Efficiency Existing Ship Index (EEXI); Ship Energy Efficiency Management Plan (SEEMP)
7 Fit for 55 refers to the EU’s target of reducing net GHG emissions by at least 55% by 2030
8 COP 26: the 26th UN Climate Change Conference of the Parties in Glasgow, Scotland, 31 October – 13 November 2021
9 https://www.dnv.com/news/dnv-to-lead-nordic-roadmap-partnership-for-zero-carbon-ship-fuels-223169
10 https://www.c40.org/news/la-shanghai-green-shipping-corridor
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Outlook on drivers and regulations for decarbonization CHAPTER 2
Principles for Marine insurance11 were established in Investors looking to build robust portfolios of green
December 2021. The Science Based Targets initiative assets are closely scrutinizing any investment opportu-
(SBTi) launched its Net-Zero Standard12 in October 2021. nity to avoid future stranded assets, which may fail to
SBTi enables companies to set net-zero targets in line with reach decarbonization requirements because of making
climate science and covers the complete value chain. The the wrong fuel and technology choice. The mounting
US has proposed rules that mandate companies listed pressure means shipowners need to see GHG emissions
there to disclose direct and indirect GHG emissions and both from their own activities and from fuel production as
related climate risks, including material. These require- a business-critical issue that needs their attention today,
ments – combined with expectations on environmental, not in 2040 or 2050. Fuel flexibility remains a key strategic
social and corporate governance (ESG) reporting and element in ship newbuilding to ensure that those built
disclosure of emissions in practice – mean shipping today can apply carbon-neutral technologies and fuels
companies will need to provide more detailed reporting when they become available in the future.
on emissions and ensure that future decarbonization
requirements are met.
11 https://www.poseidonprinciples.org/insurance
12 https://sciencebasedtargets.org/net-zero
Figure 2.1
Three key fundamentals are

driving ship decarbonization, frameworks and sta
supported by frameworks orting nda
upp rds
and standards specifying S
sustainability evaluation
criteria and targets, GHG
emission calculation
methods, and reporting
requirements Regulations
and policies
Expectations Access to
of cargo investors and
owners and capital
consumers
©DNV 2022
23
2.1 Regulatory developments

As noted earlier in this chapter, the regulatory frame- scheduled revision of its GHG Strategy in 2023, which
work addressing GHG emissions from international includes revising the current ambitions for both carbon
shipping is taking shape (see Figure 2.2). To recap, the intensity and reducing total GHG emission, and devel-
IMO’s extensive new carbon dioxide (CO2) regulations oping further regulatory measures to ensure that
applicable to existing ships include the EEXI addressing international shipping can achieve these ambitions.
the technical efficiency of ships; the CII rating scheme In November 2021, MEPC 77 agreed that the ambitions
addressing ships’ operational efficiency, and the need strengthening, but without stating by how much.
enhanced SEEMP Part III addressing the management Concrete proposals have been submitted arguing
system. The new regulations will take effect from 1 for full decarbonization by 2050, and negotiations
January 2023, and we expect them to have a significant have begun, with a decision expected at MEPC 80 in
impact on ship design and operations. At MEPC 78 in July 2023.
June 2022 the final guidelines supporting these regula-
tions were adopted, including correction factors for the Proposals have also started to come forward on what
CII calculations and guidelines for development of the type of regulations should be implemented to ensure
SEEMP Part III. that shipping achieves the strategy ambitions. One set
of proposals consists of market-based measures (MBMs)
In parallel with developing guidelines, two other which aim to set a price on CO2 or GHG emissions,
significant processes are ongoing in the IMO. One is the either well-to-wake or tank-to-wake, creating a financial
Figure 2.2
IMO and EU regulatory framework for GHG emissions reduction from international shipping
EU Emissions Trading System FuelEU Maritime IMO – adopted

Global market-based measure Global GHG fuel standard IMO – proposed
• Addresses: Ship/fleet GHG emissions • Addresses: Fuel well-to-wake EU – proposed
• Applicable measures: All GHG GHG intensity (Fit for 55)
reduction measures • Applicable measures:
Alternative fuels, shore Operational
power, wind requirement
Design
Fleet emissions requirement
GHG price
FUEL
Carbon Intensity Indicator Ship Energy Efficiency EEDI/EEXI

Management Plan
• Addresses: Actual carbon intensity • Addresses: Ideal carbon intensity
©DNV 2022
• Applicable measures: All measures • Addresses: Continuous improvement • Applicable measures: New ships:
except logistics • Applicable measures: All measures Hull, machinery, LNG, speed;
except logistics Existing ships: Speed, basic hull
improvements
©DNV 2022
24
incentive driving uptake of GHG emission reduction The revenues from market-based schemes could,
measures indirectly rather than through a technical besides specific rebates and rewards as described
requirement. The four variants of MBMs currently above, be used for climate mitigation and adaption both
proposed are: in shipping and outside shipping. The proposals will be
further discussed towards MEPC 80 in July 2023, and a
— A levy system based on absolute well-to-wake GHG future MBM measure could integrate elements from
emissions. The IMO would determine the GHG price. several of the above proposals.
— A levy system based on CII performance, where ships
with CII performance below a benchmark would pay a The initial impacts assessments13 of the MBM proposals
contribution per tonne CO2, and those performing indicate a CO2 or GHG price between USD 50/tCO2 and
above the benchmark would receive a reward. The USD 300/tCO2 towards 2050, and a transport cost
IMO would determine the contribution. The reward increase of 50% to 90%, when following a Decarboniza-
would depend on the fleet’s level of achievement. tion by 2050 pathway. However, these prices depend on
— A levy system based on absolute tank-to-wake CO2 the abatement costs and especially the future price gap
emissions, with the revenues being used partly to between fossil and carbon-neutral fuels.
provide direct rebate to zero-emission vessels. The
IMO would determine the CO2 price and rebate. In addition to the MBMs, the IMO has also received a
— An emissions cap-and-trade system, similar to the EU proposal for a technical requirement, the GHG Fuel
ETS, where the IMO would set the well-to-wake GHG Standard14, which will set a requirement on the well-to-
emission level and allowances would be auctioned. wake GHG emission per unit of energy provided to the
The market would then determine the carbon price. ship, either as a fuel or as electricity.
13 ISWG-GHG 12/3/14, ISWG-GHG 12/3/17

14 ISWG-GHG 12/3/3
25
Beyond the IMO, the EU is one of the most influential and through an increasingly stringent lifecycle GHG intensity
ambitious regulators of ships. Its ambition is to reduce requirement.15 These two proposals related specifically
emissions by 55% in 2030 relative to 1990, and to become to ships are very likely to be adopted. The EU Council and
climate neutral by 2050. In July 2021, the EU proposed its Parliament are considering them in draft form before final
Fit for 55 legislative package and FuelEU Maritime adoption timetabled for late 2022 or 2023. The timeta-
regulation. Fit for 55 is expected to include shipping in bles for finalization vary due to Fit for 55 having many
the EU Emissions Trading System (EU ETS). FuelEU items to discuss, and because of the varying complexities
Maritime aims to increase the use of sustainable fuels between the proposals.
15 https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/delivering-european-green-deal_en
Figure 2.3
Timeline with key regulatory processes and decisions in the EU and the IMO
2022 2023 2024 2025 2026 –
EEDI phase 3
EEDI phase 3
(selected ship EEXI
(all ship types)
types)
Adopted
regulations
Enhanced
SEEMP and CII
IMO carbon
price
Revised Data
Collection
System
FuelEU Maritime
IMO GHG fuel
– GHG fuel
In the pipeline, standard
standard
or possible (well-to-wake)
(well-to-wake)
regulations EU ETS for
shipping
Black carbon
and VOC
IMO LCA Comprehensive

CII and EEXI
guidelines for fuels impact
review
(first version) assessment
Processes
IMO Revised GHG
Strategy
©DNV 2022
Key: Carbon Intensity Indicator (CII); Energy Efficiency Design Index (EEDI); Energy Efficiency Existing Ship Index (EEXI); Emission Trading System (ETS);
Lifecycle Assessment (LCA); Ship Energy Efficiency Management Plan (SEEMP); Volatile Organic Compounds (VOC)
©DNV 2022
26
Within a few years, the ETS will impose costs on ships The compliance requirement can also be pooled for a
trading in, or in and out of, the EU. As of May 2022, the group of ships where the average GHG intensity needs
allowance price was around EUR 80/tCO2 to 90/tCO2.16 to be below the requirement, though individual ships
This will add EUR 250 to 290 to the cost per tonne of fuel may have a higher intensity. In the short term, a key
combusted, representing a 30% to 50% increase in fuel impact from 2025 will be a focus on calculating lifecycle
costs if operating in the EU. The EU ETS price will be GHG emissions and establishing fuel certification
determined by the abatement cost across all industrial schemes.
sectors in the scheme and not only by the cost in the
shipping sector. The number of allowances put on the This section has focused on EU and global regulations,
market will be reduced by 4.2% per year, which means but other countries such as the US and China have
that the price may increase further. implemented local and national requirements that could
impact international shipping, and which should be
The impact of FuelEU Maritime is more long term. The monitored depending on trading area. Figure 2.3 shows
reduction requirement is set relative to the average a timeline with key regulatory processes and decisions
well-to-wake fuel GHG intensity of the fleet in 2020. The expected in the coming years from the IMO and EU. The
initial requirement is a 2% reduction compared with the EU is expected to agree on regional regulations that will
fossil fuel comparator by 2025, 6% by 2030, and accel- have an effect from 2023, while new IMO measures are
erating from 2035 to reach a 75% reduction by 2050. anticipated after 2025.
2.2 Well-to-wake GHG emissions and

sustainability of fuels
Decarbonizing shipping should not lead to shifting criteria. The guidelines include a placeholder for adding
emissions to other sectors. Examples could include provisions for onboard CCS, but there are no details yet
producing ammonia or hydrogen from non-renewable related particularly to requirements on the permanent
electricity (from fossil sources without CCS), or using storage of CO2 after capture. A first version of the
non-sustainable biofuels, which leads to emissions from guidelines, which includes the most relevant fuels today,
land-use change. A clear framework and standards for is expected by the end of 2022. These guidelines do not
calculating well-to-wake emissions and sustainability include any provision for application or requirements, but
evaluation are needed to ensure that using a fuel does the IMO is considering a submission proposing a GHG
not have unintended consequences in other sectors. Fuel Standard setting limits on well-to-wake emissions.
Work is ongoing to define ship-specific calculation The regulatory focus on lifecycle emissions and sustain-
methods for well-to-wake GHG emissions when using able production implies that marine fuels will be subject
marine fuels. The EU has proposed a lifecycle GHG to certification to verify their origin. Certification schemes
emissions standard through its proposed FuelEU Mari- already exist for biofuels, such as those from the Interna-
time regulation, which includes a method for calculating tional Sustainability & Carbon Certification (ISCC)17 and
lifecycle emissions as well as a requirement. The IMO is the Roundtable of Sustainable Biomaterials (RSB)18. In
also working on guidelines for calculating lifecycle GHG addition to their own standards, ISCC and RSB provide
emissions for marine fuels, including sustainability certification according to the International Civil Aviation
16 https://www.eex.com/en/market-data/environmental-markets/auction-market
17 https://www.iscc-system.org
18 https://rsb.org
27
Organization (ICAO) Carbon Offsetting and Reduction of the scopes but should be reported in a separate
Scheme for International Aviation (CORSIA), for aviation memo. Scope 3 emissions would also include emissions
fuels; the EU’s renewable energy directive (RED II); and from manufacturing of ships, but there are not yet any
Japan’s mandate for using biofuels. Several initiatives are specific methods for calculating this. For a wide range of
underway in different parts of the world for developing businesses like cargo owners, banks, insurance and so
schemes for other types of fuels such as hydrogen and on, ship emissions, including the lifecycle emissions from
hydrogen-derived fuels to certify their origin, such as fuels, are part of their Scope 3 emissions.
Australia’s guarantee of origin scheme19, the China
Hydrogen Alliance20 and the EU’s CertifHy21. A similar As mentioned above, the SBTi launched its Net-Zero
model where certification schemes are recognized Standard23 in October 2021 enabling companies to set
according to IMO requirements can also be used for net-zero targets in line with climate science, which covers
marine fuels. the complete value chain. Many cargo owners – such as
Unilever, IKEA, and Amazon – have already set more
At the company level there will also be a need to calculate ambitious targets for decarbonization and expect low-
and report on emissions from fuel production. The GHG and zero-emission shipping services in this decade. The
Protocol22 includes reporting standards dividing emis- US has proposed rules that mandate US-listed companies
sions into three scopes. For a shipping company, the to disclose direct and indirect GHG emissions and related
direct emissions from combustion of non-biogenic fuels climate risks, including material Scope 3 emissions.
on owned or operated ships are part of Scope 1, while These requirements mean many shipping companies will
emissions from fuel production, including biofuels, need to report on lifecycle emission from marine fuels
should be reported as Scope 3 emissions. Direct CO2 and meet specific targets, even if this does not yet apply
emissions from combustion of biofuels are not part of any to specific ships.
2.3 The need for standards to support

decision-making and funding
Significant investments are needed during the next more expensive energy sources and onshore investments
decades to enable the transition to carbon-neutral could increase the annual fuel costs by more than USD
shipping. DNV estimates that an additional USD 8bn to 100bn to 150bn when shipping is fully decarbonized,
28bn per year is needed for investing in ships in a transi- which would be a 70% to 100% increase from today.
tion phase towards decarbonization in 2050 (see Section
5.6). For comparison, the average annual investment in It is critical to ensure that sufficient funds are available
newbuild contracts over the last 10 years is around USD and invested in the right projects on ships and land.
85bn (Clarkson Research, 2022). In addition to the There is a need for standardized criteria for what is
investments on ships, DNV projects that about USD 30bn considered sustainable. The EU and China are setting up
to 90bn per year is needed onshore to produce the taxonomy schemes to ensure that capital is channelled to
amount of carbon-neutral fuels required for ships to 2050, economic activities that contribute significantly to
and for fuel distribution and bunkering infrastructure. The environmental objectives.
19 www.cleanenergyregulator.gov.au/Infohub/Markets/guarantee-of-origin
20 www.h2cn.org.cn/en/about.htm
21 https://www.certifhy.eu
22 https://ghgprotocol.org
23 https://sciencebasedtargets.org/net-zero
28
ity risks, are being further expanded. The EU is

progressing towards adopting a Corporate Sustain-
ability Reporting Directive (CSRD) which would
mandate detailed sustainability reporting for all large
companies and all listed companies – almost 50,000 of
them in total. As mentioned above, the US has
proposed rules mandating US-listed companies to
disclose direct and indirect GHG emissions and
related climate risks.
We also see significant regulatory standard develop-

ments for ships and fuels. Stakeholders can easily
apply criteria based on the implementation of the CII
with an annual rating. The next standard to be applied
could be the fuel lifecycle emission intensity, which is
expected to be mandated first through FuelEU Mari-
time, and possibly later by the IMO through the GHG
Fuel Standard. These standards will also allow cargo
owners to set specific requirements for their transpor-
tation needs.
The Poseidon Principles as of spring 2022 represent 29

banks and 50% of global ship financing and require them
to specifically assess and disclose the climate alignment
The focus on green and sustainable activities from of their ship finance portfolios. It has been in operation
financial institutions and institutional investors aims to for two reporting years. The Sea Cargo Charter is a similar
reduce exposure to non-sustainable activities and to scheme for cargo owners, but with only one year of
contribute positively to mitigating climate change. operations. As previously mentioned, marine insurers
Access to capital depends increasingly on environmental recently set up their own Poseidon Principles for Marine
credentials and meeting expected decarbonization Insurance scheme requiring disclosure of their portfolios’
trajectories throughout the lifetime of ships. Financial climate alignment.
institutions are required to report on their portfolios’
compliance with sustainable investment taxonomies. It is The learning from the annual reports of these schemes
expected that this will gradually be linked to the capital is that operational patterns have a significant effect
requirements for the financial institution, thus directly between years and that longer-term trends need to be
impacting the cost of capital. seen before impacts relating to the assets can be
reliably assessed. The questions are: How will the
The need for standardized criteria and ensuring that banks, investors, insurers and cargo owners use the
capital is channelled to green and sustainable projects metrics reported to them, and how will they act on
are closely linked to reporting standards and require- projects that impact the climate alignments of their
ments, at both company and ship level, and to the portfolios? More information and increased transpar-
development of ship-specific indicators and benchmarks ency should enable stakeholder to take better deci-
in regulations. sions, but the information needs to be organized and
standardized to be useful. To make the correct deci-
Requirements for sustainability reporting, including sions, it is also critical to understand what the informa-
disclosure of performance and evaluation of sustainabil- tion does and does not tell you.
29
Highlights
Decarbonization requires new fuels, — We provide a new snapshot of alternative

greater energy efficiency, and better logistics: fuel uptake in the world fleet.
— We assess the current and future technical

readiness of onboard fuel technologies.
— We emphasize safety challenges in the

transition to new fuels.
— We explore how digitalization can enable

maritime decarbonization.
30
3
OUTLOOK ON
SHIP TECHNOLOGIES
AND FUELS
3.1 Available ship technologies and fuels for decarbonization of shipping 32

3.2 Status of fuel transition 34
3.3 Outlook for the readiness of onboard fuel technologies 35
3.4 Digitalization – enabling the transition 41
31
3 OUTLOOK ON SHIP TECHNOLOGIES AND FUELS

Policy developments and stakeholder engagement over the next decades
will drive shipowners to identify, evaluate, and use technologies, fuels, and
solutions that help decarbonize ships, cut energy consumption, and meet
other environmental requirements. This chapter is our high-level overview of
promising ship technologies and fuels, introducing an updated outlook for
their technology readiness levels.
We also discuss how digitalization can enable the Unfortunately, the new fuels are not available today in
decarbonization of shipping in several important ways the sufficient quantities, usually require more space,
such as improved design, energy-efficient operation, and and are much more expensive. All these factors
greater fleet utilization. improve the business case for energy efficiency (and
harvesting) solutions. The focus on fuel savings will
Decarbonizing shipping will predominantly require probably be emphasized even more by the present
new fuels, but also greater energy efficiency and situation with high prices for fuel oil and LNG. Ship
improved logistics (Figure 3.1). Irrespective of effi- concepts being developed show significant fuel-saving
ciency improvements, meeting ambitious decarboniza- potential when implementing energy-efficiency
tion goals will require a change to carbon-neutral fuels. measures and wind-assisted propulsion.
3.1 Available ship technologies and fuels for

decarbonization of shipping
While we expect the internal combustion engine (ICE) will We see increased interest in the use of nuclear power; for
remain the dominant energy converter in the fleet, future example, Small Modular Reactors (SMRs) using molten
integration of marine fuel cells in power systems has salt reactor technology can be used on board ships.
potential to provide greater efficiency and thereby Novel reactor technologies first need to be developed
reduce fuel consumption. Fuel cells combined with and operated onshore before sufficient experience is
alternative fuels such as hydrogen can efficiently reduce available to guide the public perception, risk, and costs
and even eliminate emissions and noise, while energy associated with taking the technology on board ships
efficiency can be increased compared with conventional (DNV, 2021e). For nuclear propulsion to achieve signifi-
combustion engines (DNV, 2021e). The modularity and cant uptake in commercial shipping, public opposition to
electric efficiency of fuel cells will be used in hybrid nuclear power, and the concerns related to misuse, must
systems alongside electric motors for propulsion, be addressed.
batteries for energy storage, and gensets. More complex
systems offer more degrees of freedom to obtain greater The significant barriers against the uptake of carbon-neu-
efficiency throughout the operational profile by using tral fuels may also make a business case for continued use
more advanced power and energy management systems. of fossil fuels with onboard CCS. This may be applicable
32
Outlook on ship technologies and fuels CHAPTER 3
for some ship segments depending on regulatory and over the years. Typically, sails can save 3% to 15% of
land-based infrastructure developments. Recent years propulsion power under relevant conditions, but
have also seen the development of numerous digital greater percentages are also reported. Very few ships
tools that can be used in the shipping industry. These currently operate with variants of sail arrangements.
tools can provide digital-enabled optimization and — Waves, normally associated with resistance and
reduced emissions in shipping, either independently or increased demand for propulsion power, can also be
in conjunction with other digital technologies. However, an energy source. This can be achieved by using foils
it should be recognized that to a large extent, the or ‘wings’ in the bow. Typical fuel savings are report-
onboard technologies needed to support the maritime edly 1% to 3% under relevant conditions, but greater in
energy transition are still immature. some reports. A few applications have recently been
reported in the passenger segment. As the motion of a
While technical and operational efficiency measures can ship is important in determining the fuel saving
significantly reduce GHG emissions, uptake of more potential, smaller vessels generally have greater
advanced technical energy-saving methods is currently potential.
limited. However, we expect this to increase in the — Installing solar panels will allow for electricity produc-
coming years due to IMO requirements and stakeholder tion at sea and in port. However, solar power produc-
expectations (see Chapter 2). tion requires daylight. This results in solar panels
having the potential to save only around 1% of
Exhaust gas economizers, propeller efficiency equipment, auxiliary power, though this could be greater
bow enhancement, hull fins and air lubrication systems are depending on the area available on board for panels.
gaining in popularity, according to data from Clarkson A few vehicle carriers have installed solar panels on
(Clarkson Research, 2022). There are also ways to harvest the top deck.
energy from surroundings, as well as onboard CCS: — Onboard CCS technology can play an important role
in reducing CO2 emissions in the deep-sea shipping
— Sail arrangements such as sails, kites, fixed wings and segment in the coming decades. Liquid absorption
Flettner rotors have been tested on merchant vessels technology, with or without membranes, is becoming
Figure 3.1
GHG emission-reduction potential of technologies that can contribute to shipping decarbonization
LOGISTICS AND
HYDRODYNAMICS MACHINERY ENERGY AFTER TREATMENT
DIGITALIZATION
Speed reduction Hull coating Machinery LNG, LPG Carbon capture

efficiency Biofuels and storage
Vessel utilization Hull-form improvements Electrification
optimization Methanol
Waste-heat recovery
Vessel size Ammonia
Air lubrication Engine de-rating
Hydrogen
Battery hybridization Wind power
Alternative routes Cleaning
Fuel cells Nuclear
©DNV 2022
>20% 5% –15% 5% –20% 0%–100% >30%
©DNV 2022
33
a popular option for CCS system concepts. However, Our focus in the following sections shifts to fuel
no full-scale CCS system has yet been implemented technologies because reducing vessel GHG emissions
on board, nor any large-scale demonstration proj- by up to 100% can only be achieved with carbon-neu-
ects. tral fuels.
3.2 Status of fuel transition

Key barriers to the uptake of low or zero-carbon fuels The technical applicability and commercial viability of
include increased capital investment, limited fuel alternative fuels will vary greatly for different ship types
availability, lack of global bunkering infrastructure, high and trades.
fuel prices, and the additional demand for onboard
storage space. The severity of such barriers will vary Figure 3.2 shows the current status of the uptake of
between fuels. Safety is also a primary concern, with the alternative fuels in the fleet – as well as in the order book
absence of prescriptive rules and regulations complicat- as of June 2022. In gross tonnage (GT) terms, 5.5% of
ing the implementation of required technology on board. ships in operation and 33% of those on order can operate
Figure 3.2
Alternative fuel uptake in the world fleet by number of ships and gross tonnage
NUMBER OF SHIPS
Ships in operation 11 Methanol Ships on order 3 Hydrogen
19 LPG 35 Methanol
98.8% 396 Battery/Hybrid 78.9% 57 LPG
conventional conventional 417 Battery/Hybrid
fuel fuel
World fleet 923 LNG Order book 534 LNG
1 349 Total 1 046 Total
IN % OF GROSS TONNAGE
Ships in operation 0.02% Methanol Ships on order 0.02% Battery/Hybrid
0.06% LPG 1.45% Methanol
94.5%
0.06% Battery/Hybrid 66.8%
1.52% LPG
conventional conventional
fuel 5.39% LNG fuel 30.2% LNG
World fleet Order book
5.5% Total 33.2% Total

©DNV 2022
Key: Liquefied natural gas (LNG); liquefied petroleum gas (LPG)

Sources: IHSMarkit (ihsmarkit.com) and DNV’s Alternative Fuels Insights for the shipping industry – AFI platform (afi.dnv.com)
©DNV 2022
34
on alternative fuels (including LNG carriers). The equiva- Methanol had previously been a choice exclusively for
lent percentages when considering numbers of ships are tankers in the methanol trade, with 11 ships in operation
1.2% and 21%, respectively. In other words, 1,046 out of and 14 new tankers on order. This year we also see uptake
4,967 ships are ordered with alternative fuel capability. in the container segment, with 21 ships on order with
methanol as fuel. 76 LPG carriers using LPG as fuel are
By number of ships, uptake is dominated by battery/ either in operation or on order.
hybrid ships together with LNG fuel. However, in gross
tonnage terms LNG fuel dominates, which reflects the It should be noted that the majority of ships using
fact that battery/hybrid solutions are applied mostly on alternative fuels can also burn conventional fuel oils.
smaller vessels. Of the 923 ships in operation with LNG
fuel, there are 630 LNG carriers and 293 LNG-fuelled The strong interest in ammonia as fuel, reflected in
ships of other types. Uptake of methanol and LPG is concepts and pilot studies, is currently restricted by
starting to show in the statistics together with the first immature converter technologies. This is expected to
hydrogen-fuelled newbuilds. In addition, numerous change when the technology becomes available.
potential newbuilds with various alternative fuels are
being projected. In the previous editions, we reported these numbers
without LNG carriers (which have been running on boil-off
The trend of larger ships being ordered with alternative gas from cargo for decades) to better illustrate the ‘new’
fuel propulsion is continuing, with LNG as the dominant uptake of LNG fuel technology in other segments. For a full
fuel. LNG is a popular fuel choice in the car carrier and picture, we present the current statistics with the LNG
containership segments, and significant uptake is also carriers included. Excluding LNG carriers would suggest
being seen for tankers and bulk carriers. Of the 1,046 that currently 18% of newbuilds can use alternative fuels,
ships on order with alternative fuels, 167 are LNG-fuelled compared with 12% in 2021 and 6% in 2019.
LNG carriers; 367 are LNG-fuelled ships of other types;
and 417 are using battery/hybrid propulsion. In the The statistics are from DNV‘s Alternative Fuels Insight
short-sea segment – which was the first mover on LNG platform, launched in 2018 as the industry go-to source
fuel years ago – the clear trend towards electrification for for information on uptake of alternative fuels and technol-
ferries is continuing, with some looking towards hydro- ogies in shipping, and on bunkering infrastructure for
gen and fuel-cell technology to increase range. alternative fuels.
3.3 Outlook for the readiness of onboard

fuel technologies
The transition from fossil fuels to carbon-neutral fuels, will Technologies (DNV, 2021c) with separate assessment of
have to coincide with a corresponding development in different energy converters, onboard CCS, and safety
onboard fuel technology, while onboard CCS technology regulations for onboard use of alternative fuels.
enabling continued use of fossil fuels may become an
alternative for some ships. In this chapter we introduce an Key factors in the timeline development have been the
updated timeline presenting the current maturity level of technology readiness level (TRL) assessment of individual
selected onboard fuel technologies required for the technologies; known planned development and testing
energy transition, and the future expected improvement programmes; and mapping of regulatory development
in technological readiness. This is an enhanced version of on safe design and use of alternative fuels. For TRL
our Timeline for Expected Availability of Alternative Fuel definitions, see the separate text box.
35
The resulting timeline is our best estimate of the matura-

tion for energy converters able to use methanol, ammo- For technology readiness level (TRL),
nia, or hydrogen as energy carriers, and for onboard CCS the following definitions apply (EU)
technology. We have categorized the energy converters
into 2-stroke engines, 4-stroke engines, auxiliary boilers, TRL 1 – basic principles observed
and fuel cells. 2-stroke engines are typically used for TRL 2 – technology concept formulated
propulsion by larger cargo ships, having the largest share TRL 3 – experimental proof of concept
of total installed power in the world fleet and accounting TRL 4 – technology validated in lab
for most of the maritime fuel consumption and emissions.
TRL 5 – t echnology validated in relevant environ-
However, 4-stroke engines used for propulsion and ment (industrially relevant environment in
auxiliary power generation dominate by sheer numbers the case of key enabling technologies)
(about 82% of ship engines). Boilers are mainly used to
TRL 6 – t echnology demonstrated in relevant
generate steam for heating purposes on board and
environment (industrially relevant environ-
represent a small part of the overall fuel consumption and
ment in the case of key enabling technolo-
emissions. Fuel cells are expected to be integrated in
gies)
hybrid power systems in the coming decades.
TRL 7 – s ystem prototype demonstration in opera-
tional environment
Figure 3.3 applies a colour scale to indicate the matura-
tion of energy converters, CCS technologies, and TRL 8 – system complete and qualified
corresponding safety regulations for onboard use of TRL 9 – a
ctual system proven in operational environ-
relevant fuels. The technology maturation scale ranges ment (competitive manufacturing in the case
from validated technologies (TRL 4) to technologies that of key enabling technologies; or in space)
are available from one or more manufacturers (TRL 9). It
may be expected that technologies and power ranges
serving the core markets will be available first, followed
by an expansion in product range depending on timeline simply assumes that the fuels are available, with
demand. market demand for the respective fuel technologies.
Other aspects – for example, distribution and bunkering
The maturity of safety regulations for onboard use of infrastructure, policies and incentive schemes, fuel prices
respective fuels is indicated separately. This is to empha- and technology cost – will of course affect actual uptake of
size that they must be developed in parallel with the these technologies. We describe and illustrate these key
technological development to ensure efficient uptake of barriers in our Alternative Fuel Barrier Dashboard provid-
new fuels and technologies in the world fleet. The low ing their indicative status for selected alternative fuels. The
end of the scale represents a state where prescriptive Alternative Fuel Barrier Dashboard also identifies the
international standards are not in place to support stakeholders in the ecosystem who can contribute to
designers and yards in the building process. We consider further reduce barriers to uptake of fuel. Successful uptake
that regulations have reached a high maturity level when of CCS technology will depend on a fully developed
statutory approval can be based on accepted interna- infrastructure for the total CO2 value chain.
tional standards.
We have not included alternative fuels such as LNG and
We have considered a time frame 10 to 12 years ahead LPG. These technologies can contribute to decarboniza-
and do not expect all technologies to reach maturity tion directly and by using electrofuels and biofuels. This
within this period. onboard fuel technology is, however, considered
relatively mature and thus irrelevant for this timeline. It is
It is important to be aware that the maturity timelines do worth mentioning that there are also fuel cells under
not reflect expected availability of a given fuel type. The development which can use these fuels and could
36
potentially increase efficiency compared with combus- hydrogen energy converters. The new fuels have reached
tion engines. different level of regulatory maturity – with methanol
regulations for onboard use being the most mature, and
Figure 3.3 shows that the current maturity level of hydrogen the least mature, of the three fuels assessed
methanol fuel technologies is higher than those of (see safety text box on page 40).
ammonia and hydrogen. For ammonia, we see a develop-
ment of 2-stroke and 4-stroke engine technologies on Compared with most alternative fuels, which are gases
parallel paths enabling uptake in deep-sea and regional and low-flashpoint liquids falling under the IGF Code24,
short-sea shipping. For hydrogen, the timeline reflects introducing CCS installations does not pose the same
that short-sea shipping is expected to be instrumental in safety risks. It is expected that if CCS technologies are
maturing the technology. Consequently, the develop- identified as a viable option, class rules could quickly be
ment of fuel cells and 4-stroke engines are ahead of other developed to cover the installation risks.
24 International Code of Safety for Ship Using Gases or Other Low-flashpoint Fuels
Figure 3.3
Estimated maturation timelines for energy converters, onboard CCS technologies, and corresponding safety
regulations for onboard use
Methanol 2-stroke engine

4-stroke engine
Boiler
Fuel cell
Regulations for onboard use
Ammonia 2-stroke engine

4-stroke engine
Boiler
Fuel cell
Hydrogen 4-stroke engine

Fuel cell
CCS CCS technology

2022 2026 2030 2034

©DNV 2022
Validation (TRL 4) Onboard technology available (TRL 9)

Low safety regulatory maturity High safety regulatory maturity
©DNV 2022
37
Our outlook for the readiness of the different onboard facturer.32 The current TRL level is estimated to be 4 with
fuel technologies is further discussed below: an expected rapid increase in maturity within the next
couple of years when the technology enters into use.
Methanol
Tankers carrying methanol as cargo have successfully In the cruise segment there is interest in methanol as fuel
been using dual-fuel 2-stroke methanol engines for and alternative energy converters. This drive can be
propulsion since 2017. With increased interest in metha- expected to accelerate the development in fuel cell
nol as fuel for other deep-sea ship applications as well, technologies using methanol as an energy carrier33, also
the commercially available product range is expected to benefiting other segments. The current TRL level is
increase25, and we also foresee other makers entering this estimated to be 5 with an expected longer maturation
market26,27. Retrofit options for a range of 2-stroke time than for internal combustion engines.
engines are also available28, resulting in a current
assessed TRL level 9 for 2-stroke dual-fuel engines. Ammonia
Compared with methanol, engine technologies for
We also see an increased interest in methanol as fuel ammonia are less mature. Neither 2-stroke nor 4-stroke
from shipowners operating in segments where 4-stroke engines using ammonia as fuel are currently commer-
engines are the preferred choice. This has triggered a cially available. Given the large interest in ammonia as
technology development from manufacturers aiming to fuel, engine manufacturers have for some time devel-
serve both the newbuilding market and potential retro- oped their technologies to meet this demand and the
fits.29,30 Stena converted one existing 4-stroke engine to current TRL level is estimated to be 5–6. Key challenges
methanol fuel on one of their RoPax vessels in 2015. The include ammonia’s combustion properties, nitrous oxide
current TRL level is estimated to be 6 but the first contract (N2O) emissions, and potential ammonia slip. Significant
for delivery of dual-fuel 4-stroke methanol engines for a development efforts are being made to get these
newbuild, an Offshore Wind Installation Vessel being engines to market within the next couple of years.34,35,36 It
built for Dutch contracting company Van Oord, is in may be expected that engine technologies and sizes
2023.31 Consequently, we also expect to see a rapid serving the core markets will be available first, followed
increase in technological maturity level for 4-stroke by retrofit options and expansion in product range.
engines. Conversion kits for selected engine types are
anticipated in the next couple of years. Steam boilers running on ammonia are an immature
technology. However, at least one boilermaker has begun
It may also be desirable to use low-carbon fuels for ship concept development and testing is planned within the
segments requiring auxiliary steam in operation. To meet next couple of years, resulting in an estimated TRL level of
this demand, steam boiler technology fuelled by metha- 2. In addition to the environmental benefits, having
nol is being developed and tested by at least one manu- boilers able to burn ammonia could also contribute to
25 https://www.man-es.com/company/press-releases/press-details/2021/08/25/milestone-order-for-world-s-largest-methanol-dual-fuel-engine
26 https://www.wingd.com/en/news-media/press-releases/wingd-sets-development-timeframe-for-methanol-and-ammonia-engines
27 https://vpoglobal.com/2021/08/26/eight-new-maersk-ships-to-be-fuelled-by-methanol
28 https://www.man-es.com/company/press-releases/press-details/2022/01/28/dual-fuel-retrofits-of-low-speed-engines-key-in-push-towards-decarbonisation
29 https://www.wartsila.com/media/news/17-03-2022-wartsila-to-deliver-first-dedicated-methanol-fuel-supply-system-3068213
30 https://www.man-es.com/company/press-releases/press-details/2021/11/29/man-energy-solutions-upgrading-four-stroke-engines-for-green-future-fuels
31 https://www.wartsila.com/media/news/24-01-2022-wartsila-hits-methanol-milestone-with-first-newbuild-engine-order-3039731
32 https://www.alfalaval.com/media/news/2021/abs-grants-alfa-laval-the-marine-industry-s-first-approval-in-principle-aip-for-firing-boilers-with-methanol
33 https://www.alfalaval.com/industries/marine-transportation/marine/marine-news/a-carbon-neutral-methanol-fuel-cell-system-is-taking-shape-at-the-alfa-laval-test-train-
ing-centre
34 https://www.man-es.com/company/press-releases/press-details/2021/11/29/man-energy-solutions-upgrading-four-stroke-engines-for-green-future-fuels
35 https://www.wingd.com/en/news-media/press-releases/wingd-sets-development-timeframe-for-methanol-and-ammonia-engines
36 https://www.wartsila.com/media/news/17-03-2022-wartsila-to-deliver-first-dedicated-methanol-fuel-supply-system-3068213
38
Fuel cells with a total

capacity of 400kW will
power the world’s first
liquid hydrogen-powered
car ferry, the MF Hydra.
solving issues related to operational discharges of toxic with blend-in technologies mixing hydrogen with other
gases from the ammonia fuel installation. fuels to improve the performance of 4-stroke engines.40
Hydrogen 4-stroke engines are also being projected with
Solid oxide fuel cells (SOFCs) are interesting for ship- an estimated current TRL level of 6–7. The world’s first
ping due to their ability to use different fuels, among hydrogen-powered cargo ship (With Orca) and the first
them ammonia, and for their potentially higher energy hydrogen-powered tug (Hydrotug), using 4-stroke
efficiency compared with diesel engines. In an ongoing engines are scheduled to be put into operation within the
EU project, demonstration of a 2 MW ammonia-driven next couple of years.41,42,43,44
SOFC system is planned during 2024, retrofitting an
existing supply vessel, the Viking Energy. Such demon- Blending in of hydrogen is being tested and investigated
stration and pilot projects are expected to significantly in households using natural gas-fired heaters.45 However,
improve the speed of maturing the technology.37,38,39 hydrogen-fired boilers for marine use do not seem to be
The current TRL level is estimated to be 5–6 with a high on the agenda.
projected maturation longer than for internal combus-
tion engines. The proton-exchange membrane fuel cell (PEMFC)
technology used to convert hydrogen to electricity is
Hydrogen relatively mature with an estimated current TRL level of
Given its low energy density and corresponding space 8.46 Ballard Power Systems has recently delivered two fuel
demands, limited hydrogen uptake is expected in cell modules (total capacity 400 kW) to Norwegian ferry
deep-sea ship segments where 2-stroke engines are a operator Norled. The DNV-approved fuel cell modules
natural choice for propulsion. For the short-sea segment, will power the world’s first liquid hydrogen-powered
however, major engine manufacturers are experimenting ferry, the MF Hydra, later this year.47
37 https://www.offshore-energy.biz/worlds-1st-ammonia-powered-fuel-cell-to-be-installed-on-a-vessel
38 https://shipandbunker.com/news/world/977374-eidesvik-aker-bp-seek-to-retrofit-offshore-support-vessels-with-ammonia-fuel-cells
39 https://www.alfalaval.com/industries/marine-transportation/marine/marine-news/maritime-industry-players-join-forces-to-realize-the-decarbonisation-potential-of-sol-
id-oxide-fuel-cells
40 https://www.man-es.com/marine/strategic-expertise/future-fuels/hydrogen
41 https://www.behydro.be/en/home.html
42 https://presse.enova.no/pressreleases/the-worlds-first-hydrogen-powered-cargo-ship-receives-nok-104-million-in-support-from-enova-3173745
43 https://www.argusmedia.com/en/news/2207781-japans-tsuneishi-cmb-to-build-hydrogenpowered-tug
44 https://www.marineinsight.com/videos/watch-worlds-first-hydrogen-powered-tug-hydrotug-in-port-of-antwerp/
45 https://www.britishgas.co.uk/the-source/greener-living/hydrogen-boilers.html
46 https://www.offshore-energy.biz/germany-welcomes-1st-emission-free-hydrigen-fueled-tugboat
47 https://hydrogen-central.com/fuel-cells-first-liquid-hydrogen-ferry-ballard-fcwave-norled
39
CCS Many capture technologies are sensitive to the purity of

Interest in maritime CCS is reviving, with chemical the exhaust, favouring ships burning cleaner fuels. A
absorption technology seeming to be the popular option substantial amount of energy is required to capture and
for system concepts. While this technology is well condition the CO2 for storage. Further, CCS installation
matured for land-based industries, this is not the situation and storage is demanding onboard space. Hence, this
for marine onboard installations. To enhance the technol- technology is better suited for some ship segments than
ogy readiness of maritime CCS, demonstration and pilot others. Gas carriers may have suitable characteristics to
projects will be needed, and several R&D projects have efficiently implement CCS technology on board and
been planned to address barriers for implementation on would be likely candidates for early full-scale demonstra-
board.48,49,50,51 tion projects. The current TRL level is estimated to be 5.
48 https://www.kline.co.jp/en/news/csr/csr818532238088767329/main/0/link/211020EN.pdf
49 https://solvangship.no/2022/02/18/a-game-changer-is-within-reach
50 https://www.marinelink.com/news/solvang-ethylene-carrier-retrofitted-ccs-491461
51 https://everlongccus.eu
Immature safety regulations – a safety challenge

With the introduction of new marine fuels, the toxicity of system design solution meets the intent of the goal and
methanol and ammonia, and the extreme flammability of functional requirements of the IGF Code, and that it is as safe
hydrogen, bring new sets of safety challenges originating as a conventional oil-fuelled ship. This is not a process that
from the physical properties of each fuel. Their successful most shipbuilders and designers are used to working with. It
implementation requires development of international requires more time and resources, and is creating uncertainty
regulations to ensure a safe integration of onboard fuel and an additional business risk for the project since accep-
installations. This must be done in parallel with maturation tance of design premises are not necessarily a given
of fuel technologies related to storage, distribution and outcome.
energy conversion through pilot projects and
adoption by first movers. From a regulatory point of view methanol gained an
advantage over ammonia and hydrogen in Decem-
The IMO has provided an international mandatory ber 2020 when the IMO approved the interim
regulatory framework for alternative fuels through the guidelines for the Safety of Ships Using Methyl/Ethyl
International Code of Safety for Ships Using Gases or Alcohol as Fuel. If agreed with the Flag Administration,
Other Low-Flashpoint Fuels (IGF Code). However, neither these guidelines can be used in lieu of the risk-based alterna-
methanol, ammonia nor hydrogen are currently covered by tive design process for methanol-fuelled ships. No such
detailed technical requirements in the Code. The lack of international standard is currently in place for ammonia or
design guidance is complicating the building process for hydrogen, but the development of guidelines for these fuels is
everyone involved. A shipbuilder will have to demonstrate included on the IMO’s already extensive work plan related to
through extensive risk evaluations that the chosen fuel alternative fuels. This work can draw on experience from
40
3.4 Digitalization – enabling the transition

Digitalization and decarbonization are currently the most Application of these technologies will have a significant
transformative forces in shipping, and the two topics are and multifaceted impact on decarbonization of shipping.
entwined – with digitalization enabling the decarboniza- We can summarize some of the most direct impacts as
tion of shipping in several important ways. follows:
Numerous digital tools have been developed in recent — Evolving more energy efficient ship designs through
years and used by the shipping industry to optimize and model-based simulation and optimization. Better
decarbonize operations, either independently or in computerized design tools have already improved
conjunction with other digital technologies (Agarwala, optimization of hull design to accommodate lower
2021). Digital technologies such as blockchain, Machine hydraulic resistance. Marine energy systems have
Learning (ML) and Artificial Intelligence (AI), Internet of similarly been improved through use of advanced
Things (IoT), connectivity, and computer-based simula- simulation techniques. In the next decade, virtual ship
tion and optimization platforms have progressed rapidly. models will become a standard tool for designing and
marine transport of ammonia and the of use of ammonia as elled ships. Given the typical timeline for development of
refrigerant on board. Also, some classification societies safety regulations in the IMO, it is likely that the first ships
have issued initial class rules for the use of ammonia as applying ammonia or hydrogen as fuels will be built
fuel. Hydrogen does not have the same history in maritime without the support of existing detailed statutory regula-
applications, and there are currently no class rules for tions. The safety barriers implemented in the first proj-
hydrogen as fuel. The process of developing statutory ects will be very important as they will influence the
regulations is a long process. coming industry standards on safety-critical design
solutions.
The prescriptive rules and regulations the maritime
industry is used to working with have been proven through An accident involving a new alternative ship fuel would, in
experience gained over decades of designing, building addition to the risk to persons directly involved, be a
and operating oil-fuelled ships. Major revisions of IMO serious set-back for the use of this fuel for the whole
conventions like SOLAS and MARPOL have to a large industry. Further, it is critical that the new industry stan-
extent been triggered by incidents or accidents. The safety dards maintain the same safety level as for conventional
regulations for the new fuels being introduced do not oil-fuelled ships. This cannot be achieved through devel-
benefit from the same level of experience being fed back opment of regulations alone but depends on how ships
from the operational phase. are designed, built, and operated on this basis. An
increased focus on safety will be required for all stakehold-
For ships planning to use ammonia or hydrogen as fuel, ers in the maritime industry going forward with the
the experience gap is even bigger than for methanol-fu- implementation of new fuels.
41
commissioning ships and will also be used to operate synchronization of ship arrival in ports (‘just-in-time’)
and maintain ships and fleets of ships (see Figure 3.4). will allow for fuel saving from slow steaming. In
The virtual vessel, a ‘digital twin’, is a simulator model- operation, the digital twin will continuously learn and
ling all onboard equipment, machinery, networks and update itself via sensor data providing various
control systems; all of it connected and integrated in operational parameters; input from experts with
cyberspace (DNV, 2017a). relevant industry knowledge using data from similar
assets; and from interaction with the environment.
The digital twin can be tested in simulated conditions Having access to sensor data will allow decision
close to those encountered on board. From an envi- makers to react in real-time, or within a decision
ronmental perspective, this can enable evaluation of interval enabling actions to still have value, to opti-
promising abatement measures and assist in finding mize fuel performance and the vessel’s CII rating in
cost-effective GHG reduction strategies in operation. operation.
In addition, a virtual environment will allow for simula-
tion and demonstration of remote-controlled autono- Generating representative models of ship systems
mous ships (DNV, 2018b). Such vessels can reduce and their energy flows allows for continuous monitor-
energy demand and emissions. For example, reducing ing of fuel consumption distributed across sources
manning will reduce energy demands for sustaining such as generators, boilers, fuel cells and batteries.
the people on board the ship. Reducing or eliminating
the manning will reduce weight and volume through FellowSHIP was the first large-scale installation and
optimized designs, such as removal of the ship bridge demonstration project of a fuel cell on a merchant
and accommodation. ship, reaching a total of 18,500 hours of operation. It
involved installation of a 320 kW molten carbonate
— Optimizing GHG performance for ships in operation fuel cell system fuelled by LNG and providing auxil-
through monitoring, better routing and planning, iary power. In this project, DNV applied the Complex
diagnostic and corrective actions, and simula- Ship Systems Modelling & Simulation (COSSMOS)
tor-based crew training. In addition, improved tool to successfully implement a digital twin which
42
was used to model, simulate, and optimize the fuel tions for this but cost reduction and improved GHG
cell system integration with the ship machinery management are the most evident (DNV, 2020).
systems (Ovrum & Dimopoulos, 2012).
The current wave of digitalization will transform the
— Optimizing fleet utilization and GHG performance shipping industry and have a profound impact on the way
through simulating and optimizing fleet size, composi- we design and operate ships through digital twin oppor-
tion, and speed. In a digital ecosystem of many vessels, tunities. In the energy transition for shipping, use of
one can integrate applications and data models and digital twins can demonstrate cost-efficient fuel and
leverage the cloud, Big Data, and the Internet of technology paths, assisting in keeping GHG emissions
Things to create exciting opportunities that will below the desired decarbonization targets.
harness the power of advanced predictive analysis.
This can be used to optimize fleet performance, Beyond the direct impacts described above, digitaliza-
improve information integrity, and deliver energy and tion is also enabling decarbonization in more indirect
cost savings. Better integration and communication ways – in particular through performance data manage-
between ships, shore offices and ports will enable ment platforms linked to the DSC and MRV regimes.52
improved planning, scheduling and logistics, further Digital tools are a necessary component of these
increasing fleet utilization. The digital ecosystem has systems, which in turn allows regulatory bodies, cargo
enabled fleet operators establishing onshore control owners, banks, and other stakeholders to successfully
and operation centers. There are different justifica- monitor, control and make plans.
52 The EU Monitoring, reporting and verification (MRV) requirement and IMO Data Collection System (DCS) have been mandatory since 2017 (MRV) and 2018 (DCS).
See www.dnv.com/maritime/insights/topics/MRV-and-DCS/index.html
Figure 3.4
Illustration of the next-generation ‘digital twin’ ship built prior to and in parallel with the physical construction,
enabling better system designs, more efficient system integration and commissioning, and improved safety and
performance in operation
©DNV 2022, Source: https://www.dnv.com/to2030/technology/

Virtual system design Digital twin construction Digital twin across
bringing-it-all-together-digital-twins.html
and virtual integration the life cycle
Design Construction Operation
43
Highlights
The maritime industry must reduce barriers for a — We identify supply chain and infrastructure
shore-side transition in fuel production and constraints on carbon-neutral fuel use in ships.
bunkering infrastructure:
— We conclude that supply chains will need to change
dramatically to supply several such fuel options for
ships.
— We analyse what will determine which carbon-neutral

fuels will be available for large-scale maritime use.
44
4
OUTLOOK ON
ALTERNATIVE FUEL
PRODUCTION AND
INFRASTRUCTURE
4.1 Existing fuel supply chain 47

4.2 Future energy supply chains – and main barriers 48
45
4 OUTLOOK ON ALTERNATIVE FUEL PRODUCTION

AND INFRASTRUCTURE
Shipping’s future fuel market will be more diverse, reliant on multiple energy
sources, as well as more interconnected and integrated with regional
energy markets, regional energy production, and with regional industry.
This chapter provides a high-level overview and an outlook on key barriers
to, as well as opportunities to accelerate, the upcoming shore-side transition
in fuel production and bunkering infrastructure to supply the future
decarbonized world fleet.
Shipowners need to apply new technologies and fuels be important to supply the future fuels. Ports will play a
in response to GHG requirements imposed by policy- key role in the green maritime transition by serving as
makers and other stakeholders. This will result in a energy hubs providing both shore-side electricity and
profound transition in the way future marine fuels are infrastructure for storing and fuelling ships with future
produced and made available to the shipping fleet. fuels, as well as supporting the first movers and green
Cooperation with major energy and fuel providers will corridors.
46
Outlook on alternative fuel production and infrastructure CHAPTER 4
4.1 Existing fuel supply chain

The bunkering situation today is that of a global market of vessels bigger than 5,000 GT, and for international trade),
oil, a mature market with a fully developed infrastructure, based on shipowners’ reporting.
where the crude oil price mostly determines the cost of
energy delivered to a ship. The current bunker market is In addition, sales of fossil fuels to domestic shipping and
dominated by different types of fossil fuels such as fuel oil fishing amount to another 57 Mt (IEA, 2021).
(e.g., heavy fuel oil (HFO), marine diesel oil (MDO), marine
gas oil (MGO), very low sulphur fuel oil (VLSFO) and LNG has been an increasingly popular low-emission fuel
liquefied natural gas (LNG)). Almost all (99.95%) of bunker with consumed volumes rising from about 10.5 Mt in 2019
fuel consumed in 2019 fell into this category, according to to about 12 Mt in 2020 (IMO, 2021). About 75% of the total
the IMO (IMO, 2021). The total bunkers volume sold to reported fuel usage of all types reported to the IMO was
ships in international trade was about 217 million tonnes consumed by three ship types: tankers, bulk carriers, and
(Mt) in 2019, including LNG, according to sales figures containerships.
from IEA (International Energy Agency, 2021). These sales
volumes are supported by the IMO (International Mari- An estimated 55% of total bunker volumes for interna-
time Organization Marine Environment Protection tional navigation are sold in the 10 major bunkering hubs
Committee, 2020), which reports 213 Mt for 2019 (for shown in Figure 4.1, but conventional fuel oils (including
Figure
Figure 4.1
4.1
Graphic shows 10 major bunkering hubs, with geographically close hubs combined, that that provide
provide an
an estimated
estimated
55% of fuel for international trade, and a heatmap of AIS data for ship traffic
traffic in
in 2021
202154
©DNV 2022
Ship traffic density from AIS Amount of fuel sold to shipping
©DNV
54 2022
The bunkering volumes in the different hubs shown in the figure are estimates based on IEA and other sources, combining ports and areas that are geographically close –
e.g., Algeciras and Gibraltar, Antwerp and Rotterdam
47
MDO) are available in most ports. Most bunker opera- transfer is a flexible solution with comparatively low
tions for deep-sea shipping take place at the major investment costs and risk. However, this type of bunker-
bunkering hubs, which are located strategically along ing is suitable for smaller quantities only.
the major international trade lanes. There are usually
price differences between the different bunker loca- Some ports with stable and long-term bunker demand
tions, often allowing shipowners to take an opportunistic also use shore-to-ship transfer, where a tank facility is
approach to bunkering. Tank capacities on board the connected to a bunker quay via a pipeline. This is the
vessels usually allow for bunker quantities that are practice, for example, for LNG at some offshore bases
sufficient for several voyages. In a location with compara- along the Norwegian coast. High bunkering rates and
tively low bunker prices, an owner will tend to bunker the consequently short bunkering time can be achieved with
vessel to the maximum. In cases where the vessel runs this system. However, shore-to-ship bunkering has the
low on fuel, but the closest bunkering port has high disadvantage of being inflexible.
prices, the owner will tend to bunker just enough to
reach the next bunker port with lower prices. In his For seagoing vessels in international trade, ship-to-ship
day-to-day considerations around bunkering, the owner transfer by bunker barges or seagoing bunker vessels is
will also take into account the vessel’s cargo carrying often used in bunkering operations. This type of bunker-
capacity, safety margins, price differences over time, and ing allows for transfer of large fuel quantities. Seagoing
available bunker qualities. bunker vessels provide good flexibility regarding the
location for bunkering, as their operational range is not
There are different bunkering methods which we briefly limited to harbour areas. We see for example that there
describe here using LNG as an example. Truck-to-ship are several seagoing LNG bunker vessels operating out
transfer is today used for significant amounts of LNG of Rotterdam that serve vessels at anchorage as well as
bunkering but is less common for fuel oil. Truck-to ship vessels in other ports in the vicinity.
Figure 4.2
A traditional fuel supply chain from energy source to the ship
©DNV 2022
Energy source Production of fuel Distribution of fuel Ship
4.2 Future energy supply chains – and main barriers

©DNV 2022
A relatively simple supply chain – energy source, fuel There are several candidates for carbon-neutral54 fuels,
production, distribution – supplies the shipping fleet with and three main energy source ‘families’ used to make
fuels currently used (Figure 4.2). For example, one chain them:
consists of oil extraction, refineries, and distribution of
fuels such as HDO, MDO, and VLSFO to the ship. This — Sustainable biomass – for example, forestry residue or
becomes natural gas extraction, liquefaction, and distribu- agricultural waste with no emissions from land-use
tion in the case of LNG. The future carbon-neutral fuel mix – can be used to make fuels that can be considered
is as yet undecided, but supply chains will need to change carbon-neutral compared with the alternative of
dramatically to supply several carbon-neutral fuel options. natural CO2 release from these sources: Biofuels
54 Energy sources or energy systems that have no net GHG emissions or carbon footprint
48
— Renewable electricity can be used to create made in different processes from biowaste or
carbon-neutral fuels based on hydrogen made by from forestry residue, for example. The ship may
electrolysis of water, and other reactions: Electrofuels therefore receive the same fuel type produced in
— Fossil energy can also be used to create carbon- different ways from different origins. The supply
neutral fuels by capturing the CO2 in the production chain impacts both cost and the sustainability of a fuel.
process and storing this permanently (CCS): Blue fuels Once produced, the carbon-neutral fuels will have to
be distributed – with various requirements for contain-
Irrespective of the energy source, production methods ment, pressure, temperature, and so on. Figure 4.3
vary for different fuels, and for each fuel, even when illustrates the complexity of such future fuel supply
made from the same energy source. Bio-LNG can be chains.
Figure 4.3
The future carbon-neutral energy supply chain
Bio
Electro
Blue
CO2 49
50
4.2.1 Energy source

Future fuel supply for shipping will rely on availability and
Future fuel supply for shipping will rely on
price of energy sources: electricity from renewable
sources, biomass, or fossil energy with CCS. availability and price of energy sources:
electricity from renewable sources, biomass,
Helpfully, the cost of renewable electricity is falling as it
develops rapidly, as analysed in DNV’s Energy Transition or fossil energy with CCS.
Outlook over several years (DNV, 2021b). Production of
electrofuels for shipping will nevertheless require the
installation of massive amounts of additional renewable
energy production capacity. The need for substantial
investment is compounded by that fact that renewable 2014, 2017a; Lauri, 2014; WBA, 2016; IEA, 2017a, 2017b,
electricity is also required to decarbonize several other 2019). The estimated potential varies between studies
sectors; for example, grid electricity, land transport, and depending, for example, on what sustainability
industrial production including demand for carbon-neu- constraints are imposed on the biomass supply, and what
tral methanol and ammonia for industrial purposes. types of biomass are considered. Many of the sources
also consider the technical supply potential of biomass,
A key consideration in this regard is the overall energy not considering feasibility and logistics of transporting
efficiency of the various energy pathways. When using biomass from extraction site to biofuel plant. Neverthe-
electricity directly to power ships – via shore power (‘cold less, there seems to be a consensus that there is signifi-
ironing’) or for charging onboard batteries – most of the cant potential to scale up biofuel production to make a
electric energy generated is used, and there is a high meaningful contribution to decarbonizing sectors such as
energy efficiency. When using electricity to create shipping and aviation.
electrofuels, however, there are large energy losses
during production, distribution, and conversion on Fossil energy is available in abundance, but for creating
board. This can imply that only about 20% of the input potential carbon-neutral fuels from fossil energy (blue
electric energy consumed on land reaches the propeller fuels) large investments must be made in expensive CCS
on the ship. This low efficiency means that about 26 infrastructure. The CCS value chain consists of three main
megawatt hours (MWh) of electric energy on land is elements: CO2 capture, transportation, and permanent
needed to replace one tonne of fossil fuel oil, with a storage (or utilization). Sources of CO2 include direct air
heating value (the energy going into the engine) of about capture, flue gas from power stations, and CO2 from
12 MWh.55 The low well-to-wake energy efficiency of industrial plants. Methods of transporting large volumes
electrofuels adds to the required capacity of renewable of CO2 include pipelines and ships.
electricity production, with corresponding investment.
This is an important aspect when considering combined The limited deployment of CCS infrastructure so far is a
global emissions from both shipping and electricity major barrier for the prospects of blue fuels. Admittedly,
generation for onshore use. CO2 capture is not new. It is a proven technology with
commercial units for carbon capture and utilization
Feedstock availability is a potential barrier to widespread existing in a range of capacities depending on scope,
use of sustainable biofuels. However, studies reveal large with the largest plants aiming at natural gas cleaning.
amounts of biomass that can be used to create oil, Furthermore, CO2 as a commodity is widely used in the
methane, or methanol for ship fuel – for example, forestry oil and gas industry, and other applications including in
residue, agricultural waste, and used cooking oil (IRENA, chemical manufacturing (as a feedstock, dry ice, inert
55 A 14,000 twenty-foot equivalent (TEU) containership with about 27,500 tonnes of oil equivalent (toe) annual consumption, would require about 1% of Singapore’s elec-
tricity production to run on electrofuels
51
gas, and for solvent extraction). However, the CCS value annual energy needs. Current production of ammonia
chain is immature and needs significant scaling. Further- and methanol is mostly fossil based.
more, it appears likely that even a mature CCS value chain
will be unable to capture the CO2 from all relevant For this edition of DNV’s Maritime Forecast to 2050, we
sources. The process itself will not capture all the CO2 have performed a market study identifying 128 projects
and requires more energy to achieve a higher capture planning to produce green or blue hydrogen, methanol,
rate. Only five of the current 21 CO2 capture projects or ammonia, that could potentially be used as
include dedicated storage, while most installed capacity carbon-neutral fuels by ships. The planned energy output
is for utilizing CO2 for Enhanced Oil Recovery. The is 109 million tonnes of oil equivalent (Mtoe) by 2027.
integration of emission-abatement carbon capture plants However, only a few of these projects are dedicated to
into the existing CO2 value chain has not yet built momen- shipping, as other industrial sectors also require zero or
tum; if it did, it would change carbon capture technology low-carbon variants of these commodities to decarbon-
economics. ize. Of the planned projects, 69 are in Europe with a
planned output of 79 Mtoe by 2027, indicating the
4.2.2 Fuel production region’s potential to be the first to have substantial
At the same time, some existing facilities can be reused, amounts of green fuels available.
such as bio-MGO blending in oil refineries, or partially
using existing ammonia or methanol production plants. A complicating issue for the production of some
Currently, total yearly production (for various purposes) carbon-neutral electrofuels – for example, methanol56 –
of 176 Mt of ammonia and 98 Mt of methanol has a total is that they contain carbon, and the production processes
energy content corresponding to 45% of shipping’s need the input of sustainably sourced and GHG-neutral
56 Planned e-methanol production: https://www.mip.no/en/2020/fast-track-to-carbon-capture-in-norwegian-industry and

https://www.maersk.com/news/articles/2022/03/10/maersk-engages-in-strategic-partnerships-to-scale-green-methanol-production
Figure 4.4
Existing infrastructure for supply and storage of ammonia and

methanol in Northern Europe – see afi.dnv.com for updated
world map of infrastructure for all alternative fuels
Ammonia
Methanol
©DNV 2022
52
CO2 such as biogenic carbon dioxide. The cost of Existing infrastructure can be reused for some
sustainably sourced CO2 is expected to be low in the carbon-neutral fuels, even if blending them in with fossil
beginning – for example, from biogas or paper produc- fuels during the transition. Carbon-neutral fuel oil
tion – but will increase once the lowest-cost sources are (bio-MGO, e-MGO) can use fuel oil infrastructure, and
used. Potentially, direct air capture of CO2 has to be used carbon-neutral liquefied methane (bio-LNG, e-LNG) can
to produce electrofuels containing carbon, but the use LNG infrastructure. The degree to which ammonia
current cost of such CO2 is prohibitively high. However, can use the existing LNG infrastructure is being investi-
sustainable CO2 capture capacity is not an issue when it gated.
comes to producing ammonia from hydrogen and
nitrogen. For fuels which will require new dedicated bunkering
infrastructure, the cost can be limited for non-cryogenic
Additionally, large amounts of water are needed for liquids such as methanol and liquid organic hydrogen
electrolysis, which in some regions can either put carriers. For others, such as compressed or liquid
pressure on fresh water supply or increase the energy hydrogen, a substantial cost will be incurred for bunker-
input to the fuel production process by requiring desali- ing infrastructure.
nation of the input water.
Distribution cost will vary with fuel properties; for
4.2.3 Distribution and bunkering of fuel example, there will be high distribution costs for cryo-
Provided there is sufficient energy availability and genic fuels. However, these costs can be reduced by
production capacity, the final barrier in the supply chain is using existing distribution infrastructure if it is available.
the availability of infrastructure for distribution and There is already a significant shipping network for
bunkering of the relevant alternative fuels. Bunkering ammonia and methanol annually; it transports in the
infrastructure for ships consists of storage and bunkering order of 50 Mt in total. To put this in perspective, a total of
through trucks, pipes, or ships, to the receiving ship. 50 Mt of methanol and ammonia used as ship fuel could
53
substitute 25 Mt of oil, about 10% of the world fleet’s electricity and infrastructure for storing and fuelling ships
energy demand. Figure 4.4 summarizes existing supply with alternative fuels. Ports are hubs connecting many
and storage infrastructure close to one of the world’s different sectors through transportation and logistics.
largest bunkering hubs. This infrastructure can possibly They are now emerging as energy hubs bringing
serve as a starting point for a distribution network for the together the many trends driving energy system integra-
use of ammonia and methanol as fuels for shipping, tion. Ports might also become CCS hubs if this technol-
bringing down the ‘last-mile’ distribution costs. ogy emerges as a viable option for ships. The Port of
Rotterdam in the Netherlands, and the Northern Lights
Several projects for alternative fuel bunkering vessels are consortium58 involving the ports of Oslo and Bergen in
underway, and also for ammonia57. Yara recently Norway are already actively involved in CCS.
announced plans to build 15 bunker facilities for ammo-
nia across Scandinavia by 2024. About 120 ports globally It will be critical for ports to address the regulatory and
are today involved in seaborne transport of ammonia. In safety issues posed by some of the fuels. Another
port, the commodity is usually stored in surface tanks. bunkering aspect to consider is that the lower energy
The fuel can be transported from production facilities to density of the alternative fuels may require ships to
a central hub for storage, and from there via trucks, pipes, bunker more frequently between major bunkering hubs.
or bunkering vessels to ships. Green corridors can A more diverse fuel mix also challenges ports to decide
catalyse greater availability of alternative fuels in which fuel infrastructures to invest in. Investment in
connected regions. electric charging infrastructure, with corresponding
infrastructure for distribution of electric energy to the
Ports will play a key role in the maritime fuel transition by ports, for shore power and hybrid ships, will often be a
serving as energy hubs providing both shore-side good option.
57 MOL Acquires AIP for Ammonia Bunkering Vessel - Toward Realizing Ammonia Bunkering Business in Singapore - | Mitsui O.S.K. Lines
58 https://www.equinor.com/energy/northern-lights
Figure 4.5
These factors will determine the future fuel mix of shipping
Sustainable bio-MGO
High
biomass bio-LNG
availability
bio-methanol
blue NH3
Low CCS High
availability availability blue H2, compressed
blue H2, liquefied
Low
availability
Renewable Sustainable e-MGO

High High
electricity carbon e-LNG
availability availability
e-methanol
e-NH3
Low Low
e-H2, compressed
availability availability
e-H2, liquefied
Key: ammonia (NH 3); biofuel (bio-); carbon capture and storage (CCS); electrofuel (e-); fossil fuel with CCS (blue); hydrogen (H 2);
liquefied natural gas (LNG); marine gas oil (MGO)
©DNV 2022
54
The availability of electrofuels depends on the availability

of renewable electricity to produce hydrogen. This
For shipowners to choose carbon-neu-
requires phasing out the use of fossil energy for electric-
tral fuels, the fuels must be available in ity generation, a transition that is still a long way off in
most regions. Using electricity even partly made from
relevant ports, and coordinated plans
fossil fuels to produce electrofuels is not energy efficient
must be made for increasing availability. and could lead to higher net emissions.
The availability of sustainable carbon from biogenic

sources or direct air capture is also important. This
carbon could be combined with hydrogen from electrol-
ysis to produce e-diesel, e-methane, or e-methanol,
again taking advantage of using more energy-dense
For shipowners to choose carbon-neutral fuels, the fuels fuels.
must be available in relevant ports, and coordinated
plans must be made for increasing availability: from The availability of blue fuels depends on the effective-
extracting energy from an energy source, to fuel produc- ness of carbon capture and the provision of infrastructure
tion and distribution. There are plans for development for permanent storage of the captured carbon. Mature
and investments, including for international collabora- CCS technology and infrastructure could also make
tions such as green corridors; these initiatives, and more, onboard CCS a viable alternative where fossil fuels
will need to be realized. The many plans and projects all continue to be used.
aim to increase availability of carbon-neutral fuels. In the
next chapter, we use DNV’s model of the development of In the next chapter, we use DNV’s model of the develop-
the global fleet to simulate the effects of having ment of the global fleet to evaluate the effect on the
increased availability of carbon-neutral fuels in one or future fuel mix of high and low availability for each of the
more regions. determining factors in Figure 4.5.
4.2.4 Determining factors for the future fuel mix

The availability of sustainable energy sources and
feedstock for production impose constraints on the use
of different types of carbon-neutral fuels. Figure 4.5
shows the main factors whose – as yet uncertain – level of
availability will determine which carbon-neutral fuels will
be available for large-scale maritime use.
If sufficient sustainable biomass becomes available, it

would be the preferred fuel as it is easily converted to
relatively energy-dense hydrocarbon fuels such as
bio-MGO, bio-LNG, or bio-methanol. The availability of
such biomass needs to be seen in light of demand from
other hard-to-abate sectors where energy-dense
hydrocarbons are likely to be needed; for example, in
aviation, where it is difficult to electrify long-haul flights. If
there is low availability of sustainable biomass the prices
of biofuels are unlikely to be competitive with those of
electrofuels and blue fuels.
55
Highlights
Our scenario modelling explores the fuel transition — We update our portfolio of decarbonization
facing shipping: scenarios built with an enhanced version of
our GHG Pathway Model.
— We investigate what will determine the future fuel

mix and uptake of carbon-neutral fuels.
— We assess fuel costs by region, and how regional

fuel production and infrastructure impact the
future fuel mix.
56
5
PATHWAYS FOR
DECARBONIZATION
OF SHIPPING
5.1 Updated GHG Pathway Model 58

5.2 Exploring decarbonization scenarios 60
5.3 Scenario results 61
5.4 Emissions reduction contribution by measure 67
5.5 Fuel families’ contribution to the 2050 energy mix 67
5.6 Investment needs 69
5.7 Exploring the effect of first movers and increased availability of fuels 71
57
5 PATHWAYS FOR DECARBONIZATION OF SHIPPING

This chapter presents an updated portfolio of scenarios, built with an
enhanced version of our GHG Pathway Model to explore the fuel transition
that shipping is facing. We investigate how the future fuel mix and uptake of
carbon-neutral fuels are impacted by the availability of energy sources and
other key inputs for fuel production, and by price assumptions on emerging
fuels, technologies, and retrofits. We also assess fuel costs regionally, and
how the build-up of regional fuel production and infrastructure impact the
development of the fuel mix.
This year’s work builds on and extends our findings in fuels. Considering these uncertainties, scenario analysis
previous editions of our Maritime Forecast to 2050, is a well-established method that can provide valuable
where we presented the GHG Pathway Model and our input to strategic decisions on newbuilding plans. The
Carbon-Robust framework for future-proofing ship method can also enhance fleet flexibility and resilience
designs (DNV, 2018a, 2019, 2020, 2021c). Central to the to a range of possible futures related to regulatory and
use of the model is to generate a library of scenarios, technology landscapes. A scenario describes a path of
each describing a possible development of the future development under a particular set of framing condi-
fleet composition, energy use and fuel mix, and emis- tions, without prejudging the likelihood of these
sions to 2050. conditions. It is not intended to represent a conclusive
view on what the future will look like, but instead to
Significant uncertainties around several factors influ- highlight key factors that need to be in place to realize
ence the transition from conventional to carbon-neutral the pathway
5.1 Updated GHG Pathway Model

DNV’s GHG Pathway Model is a flexible modelling tool for — The Fleet Development Module, in which the future
assessing alternatives for maritime decarbonization (Eide fleet is simulated by adding and removing ships
et al., 2011; Eide, Longva, Hoffman, & Endresen, 2011; year-by-year. The world fleet of 2019 is used as a
Acciaro, Chryssakis, Eide & Endresen, 2012; Eide, starting point, with associated ship data and estimated
Chryssakis; & Endresen, 2013; DNV, 2017b, 2018a, 2019, energy consumption based on Automatic Identifica-
2020; International Maritime Organization, 2021). The tion System (AIS) tracking data. The fleet develops
model has been further developed and enhanced since according to the seaborne trade demand, with
our previous Maritime Forecasts to 2050, though its basic breakdown on main ship types. Seaborne trade
structure and capabilities remain as described in the growth is given as input from the 2021 version of
2020 version of our report (DNV, 2020). DNV’s Energy Transition Outlook model of the global
energy system (DNV, 2021b).
Figure 5.1 illustrates the model comprising of two core — The Abatement Uptake Module, in which the model
evaluation modules: evaluates available solutions for CO2 emission reduc-
58
Pathways for decarbonization of shipping CHAPTER 5
tion on all existing vessels and newbuilds for each year, most cost-effective of the feasible combinations of
including alternative fuels, energy-efficiency measures abatement measures that fulfil regulatory require-
and speed reduction. Both newbuild technology ments imposed as input. The model has a regulation
options and possible fuel transition options for look-ahead function allowing the investment decision
existing vessels, such as drop-in fuels or retrofit of to be made based on knowledge of upcoming
engine and fuel system, are given as input to the regulations.
model. The fuel price input is differentiated for 10
regions, and regional availability of fuels is used as an The model includes three feedback loops, where the
uptake criterion. With these inputs, the model simu- choices made by shipowners one year affect the situation
lates the economic and risk evaluations made by the next year. First, if speed reductions are adopted by a
shipowners facing the shifting landscape of emission ship, thereby reducing the trading capacity of the fleet,
regulations, technology development, and fuel the fleet development module ensures that additional
availability and prices. The ships are fitted with the ships are built to replace the lost capacity. In a second
Figure 5.1
GHG Pathway Model
INPUT
Baseline Seaborne Regulations Ship Risk willing- Technology Fuel Fuel and
fleet trade characteristics ness and maturity, availability CO2 prices
and operational investment costs and
profile horizon effects
Fleet Abatement Year-by-year

Development Uptake feedback
Module Module Fleet capacity,
newbuilds and new and technology
scrapping existing learning, regional
ships fuel availability
Future fleet CO2 emissions Fuel mix Costs

©DNV 2022
OUTPUT 2022–2050
©DNV 2022
59
feedback loop, uptake of technical measures and fuel ated costs and other activity data. At the fleet and
technologies results in year-by-year technology learning, segment levels, the output provides projections of the
which reduces the investment costs for future installa- future fleet, fuel mix, CO2 emissions and abatement cost
tions. In the third feedback loop, the regional availability up to mid-century. The model also provides output on
levels of emerging fuels are updated year-by-year based financial parameters such as capital and operational
on uptake, simulating the development of fuel produc- expenditure (Capex and Opex). Our modelling covers
tion and bunkering infrastructure. tank-to-wake CO2 emissions, but our fuel price projec-
tions for carbon-neutral fuels assume sustainable
Details regarding input to the model, including fuel feedstock with low or very limited well-to-tank emissions.
prices and technology investment costs for newbuilds, We expect there will be variations across regions and
and retrofit costs of existing ships, are given in the development over time on well-to-wake emissions,
Appendix (page 81). These inputs are significantly having an impact on the uptake of various fuels. See also
updated from previous versions of this report. Note that Section 2.2 on emerging well-to-wake emission stan-
while most technologies and fuels are included in the dards and requirements. We have excluded non-CO2
modelling, onboard CCS and nuclear powering are GHG emissions such as methane slip and nitrous oxides
currently not. from the analysis. We anticipate that they will be
addressed by regulations and reduced through technol-
The output of the model is vessel specific and provides ogy development.
an overview of energy use, uptake of measures, associ-
5.2 Exploring decarbonization scenarios

In this year’s scenarios, we focus on the uncertainty in — We explore three cost variations for specific fuel
decarbonization ambitions (as outlined in Chapter 2) as types, in which changes in the relative cost differences
well as on the variability in cost and availability of between fuels within each family are explored:
carbon-neutral fuels (as outlined in Chapter 4). — For producing carbon-based electrofuels, a higher
sustainable carbon feedstock price (for example,
— We explore two decarbonization pathways: In the CO2 from direct air capture) is used rather than
first, IMO ambitions, shipping achieves the ambitions lower-cost CO2 feedstock from biogenic sources.
set in the current IMO GHG Strategy, including a 50% — A higher price for bio-MGO and bio-LNG relative to
reduction of total GHG emissions by 2050 compared bio-methanol, reflecting potentially higher produc-
with in 2008. In the second, Decarbonization by 2050, tion costs of such fuels.
the fleet is fully decarbonized by 2050. — Higher LNG price, reflecting natural gas prices that
— We explore six fuel family variations, in which we simu- are potentially higher relative to other fossil fuels.
late the availability of sustainable biomass to produce
biofuels; renewable electricity to produce e-fuels; and Further details on input are found in the Appendix (page
fossil fuels with CCS to produce blue fuels. In each 73). Table 5.1 summarizes the resulting 24 scenarios. The
variation we provide a high or very high fuel-price results from modelling with these scenarios are then
advantage to one fuel family over the others, based on presented in succeeding sections.
the bounds of uncertainty found in literature (see
Appendix, page 75).
60
5.3 Scenario results

In most of our scenarios, around 5% of the energy use in and LSFO/MGO) constitutes 55% to 65% of fossil fuel use
2030 is from carbon-neutral fuels. Under the IMO in 10 of the scenarios, while LNG use is slightly higher
ambitions pathway, this share grows to around 20% in than fuel oil use in the remaining two scenarios (9 and 11)
2040, depending on the scenario. In the Decarbonization where the LNG price advantage is the greatest. The share
by 2050 pathway, the share of carbon-neutral fuels grows of carbon-neutral fuels (not including electricity from
significantly quicker, reaching 40% to 50% in 2040. In the grid) is in the range of 30% to 40% in the IMO ambitions
following, we look closer at the energy mix in 2050. scenarios. In Decarbonization by 2050 scenarios, all fossil
fuels are eliminated. In all scenarios, around 3.5% of total
Figure 5.2 shows the energy mix in mid-century for each energy is from grid electricity, mainly from shore power,
of the 24 scenarios in Table 5.1. The total energy but also from battery-driven ships.
consumption is in the range 10.6 to 11.3 exajoules (EJ)59
or about 253 to 270 Mtoe, varying between scenarios due Overall, the carbon-neutral fuels dominating the 2050
to different uptake of energy-efficiency measures and energy mix in at least one scenario are bio-MGO,
speed reduction. bio-LNG, e-MGO, e-ammonia and blue ammonia, and
bio-methanol. Among the carbon-neutral fuels, the share
Among the IMO ambitions scenarios (1–12), the ratio of of drop-in fuels (bio-MGO, e-MGO, bio-LNG, e-LNG) is
fossil fuels in the mix is quite consistent and varies from higher in the IMO ambitions scenarios than in the Decar-
53% to 63% of total energy consumption. Fuel oil (HFO bonization by 2050 scenarios. Looking for example at
59 Fuel lower heating value.
61
Table 5.1
List of scenarios explored in this study
Decarbonization Pathway Fuel family variation Specific fuel cost variation Scenario No.
Very Low bio 1
Very Low bio + 20% bio-MGO and bio-LNG 2
Low bio 3
Low bio +20% bio-MGO and bio-LNG 4
Very Low electro 5
Very Low electro +150% to 200% e-MGO, e-LNG, e-methanol 6

IMO ambitions
Low electro 7
Low electro +150% to 200% e-MGO, e-LNG, e-methanol 8
Very Low fossil and blue 9
Very Low fossil and blue +20% LNG 10
Low fossil and blue 11
Low fossil and blue +20% LNG 12
Very Low bio 13
Very Low bio +20 % bio-MGO and bio-LNG 14
Low bio 15
Low bio + 20 % bio-MGO and bio-LNG 16
Very Low electro 17
Very Low electro +150% to 200% e-MGO, e-LNG, e-methanol 18

Decarbonization by 2050
Low electro 19
Low electro +150% to 200% e-MGO, e-LNG, e-methanol 20
Very Low fossil and blue 21
Very Low fossil and blue +20% LNG 22 ©DNV 2022
Low fossil and blue 23
Low fossil and blue +20% LNG 24
62
Figure5.2
Figure 5.2
FigureEnergy
4 mixinin2050,
2050,share
shareofofenergy
energyuse
useper
perfuel
fueltype,
type,allall24
24scenarios
scenarios
Energy mix
11
Fossilfuels
Fossil fuels
1 HFO+scrubber
Fossil fuels
HFO+scrubber
22
LSFO+MGO
HFO+scrubber
LSFO+MGO
2
33 LNG
LSFO+MGO
LNG
3
44 LNG
4 Biofuels
55 Biofuels
5 Biofuels bio-MGO
66 bio-MGO
bio-LNG
bio-MGO
bio-LNG
6
77 bio-methanol
bio-LNG
bio-methanol
7
88 bio-methanol
8 Electrofuels
99 Electrofuels
9 e-MGO
Electrofuels
1010 e-MGO
e-MGO e-LNG
e-LNG
10
1111
e-NH3
Scenario No.
e-LNG
e-NH
Scenario No.
3
11
1212 3 e-methanol
e-NHe-methanol
Scenario No.
12
1313 e-methanol
13 Bluefuels
fuels
1414 Blue
14 blue
Blue fuels
blue NHNH3
1515
3
blue NH3
15
1616 Electricity
Electricity
16 from grid
1717 from
Electricitygrid
17 from grid
1818
18
1919
19
2020
20
2121
21
2222
22
2323
23
2424
24 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
©DNV 2022
Key: Ammonia
0%Key: 10% (NH (NH ); biofuel (bio-); electrofuel (e-); fossil fuel with60%
CCS (blue);70%
heavy fuel oil (HFO); liquefied natural gas (LNG);
Ammonia 320% 30%electrofuel
); 3biofuel (bio-); 40%(e-); 50%
fossil fuel with CCS (blue); heavy fuel oil80% 90% natural
(HFO); liquefied 100%
gas (LNG);
Key: Ammonia (NH 3); biofuel (bio-); electrofuel (e-); fossil fuel with CCS (blue); heavy fuel oil (HFO); liquefied natural gas (LNG);
©DNV 2022
©DNV 2022
©DNV 2022
63
Overall, the carbon-neutral fuels

dominating the 2050 energy mix are
bio-MGO, bio-LNG, e-MGO, e-ammonia
and blue ammonia, and bio-methanol.
scenario 5 (Very Low electro, IMO ambitions), drop-in

fuels constitute 85% of carbon-neutral fuels, while in case
17 (Very Low electro, Decarbonization by 2050), drop-in
fuels make up 64%. This is due to a larger share of ships
with ammonia or methanol dual-fuel engines in the
Decarbonization by 2050 scenarios because of faster
strengthening of emission regulations. With moderate
emission-reduction requirements as in the IMO ambitions
scenarios, the use of drop-in fuels in combination with
fossil fuels is more cost-effective than converting to
ammonia or methanol engines and fuels. It should also be
noted that a pilot fuel share of 23% for an ammonia
dual-fuel combustion engine is assumed; in the Very Low
electro scenarios, this is typically covered by e-MGO.60
In the Low and Very Low electro scenarios (5–8, 17–20), the
dominant electrofuels are e-MGO and e-ammonia, with
less contribution from e-LNG. In scenarios 5, 7, 17 and 19
(with low sustainable CO2 feedstock cost), there is more
e-MGO than e-ammonia, even though the cost for e-MGO
is higher. This indicates that with a high availability and
sufficiently low cost of sustainable CO2 to produce e-MGO
or e-LNG from hydrogen, there is less incentive to invest in
a significantly more expensive ammonia engine and fuel
system, including the build-up of infrastructure. On the
contrary, scenarios 6, 8, 18 and 20 have a high cost of CO2
feedstock from direct air capture, leading to a shift from
e-MGO and e-LNG to e-ammonia. Under these conditions,
bio-MGO becomes the preferred drop-in and pilot fuel.
In the scenarios with higher cost for bio-MGO and

bio-LNG (2,4,14,16), the bio-methanol share of the 2050
60 This may be a conservative assumption, as engine manufacturers have a stated

goal to achieve engine designs requiring a lower share of pilot fuel than this
64
Share of total energy consumption (%) Share of total energy consumption (%) Share of total energy consumption (%)
0
20
40
60
80
100
0
20
40
60
80
100
0
20
40
60
80
100
20 20 20
22 22 22 Figure 5.3
20 20 20
24 24 24
20 20 20
26 26 26
20 20 20
28 28 28
20 20 20
30 30 30
20 20 20
32 32 32
20 20 20
34 34 34
20 20 20
36 36 36
20 20 20
38 38 38
20 20 20
40 40 40
20 20 20
MGO (carbon neutral)

42 42 42
Fuel oil (LSFO/MGO/HFO)
Ammonia (carbon neutral)

20 20 20
44 44 44
20 20 20
46 46 46
20 20 20
48 48 48
20 20 20
50 50 50
Share of total energy consumption (%) Share of total energy consumption (%) Share of total energy consumption (%)
0
20
40
60
80
100
0
20
40
60
80
100
0
20
40
60
80
100
within the pathways IMO ambitions and Decarbonization by 2050
20 20 20
22 22 22
20 20 20
24 24 24
20 20 20
26 26 26
20 20 20
28 28 28
20 20 20
30 30 30
20 20 20
32 32 32
20 20 20
34 34 34
IMO ambitions
20 20 20
36 36 36
LNG
20 20 20
38 38 38
20 20 20
40 40 40
LNG (carbon neutral)
20 20 20
42 42 42
Methanol (carbon neutral)

20 20 20
44 44 44
20 20 20
46 46 46
20 20 20
48 48 48
The uptake over time for each fuel type – expressed by the range from minimum to maximum across all scenarios
20 20 20
Decarbonization by 2050
50 50 50
65
©DNV 2022
energy mix gradually increases as we go from Low biofuel the 2020 version: No ambitions, IMO ambitions, or
prices to Very Low biofuel prices. This same trend is then Decarbonization by 2040; regulations for emission
further emphasized in the Decarbonization by 2050 reduction or carbon pricing; and low or high trade
scenarios compared with IMO ambitions scenarios, growth. This year we have a fleet growth scenario similar
yielding a substantial amount of bio-methanol in the to the low trade growth scenario in 2020; we use techni-
energy mix of 2050 for scenario 14. This indicates that the cal requirements, not carbon price as the driver; and we
uptake of methanol is very sensitive to the production use IMO ambitions and Decarbonization by 2050. The
cost of bio-methanol compared with bio-MGO and differences can be explained by changes in the GHG
bio-LNG. If the fuel price advantage is not large enough Pathway Model or in the input to the model. The model-
there is limited incentive to invest in a methanol fuel ling now includes pilot fuel for dual-fuel technologies,
system. leading to an increase of MGO, e-MGO, and bio-MGO
uptake, compared with the 2020 edition. The Capex of
In the IMO ambitions Low and Very Low blue scenarios alternative technologies has been revised and increased
(9–12), there is a shift from LNG to MGO and ammonia (see Appendix, page 80) leading to a trend of more MGO,
when the LNG price is increased (10,12). In the Decarbon- e-MGO, and bio-MGO. This trend is despite, for example,
ization by 2050 variants (21–24), the higher LNG price bio-methanol modelled as costing less than bio-MGO.
leads to a shift from LNG to ammonia. Drop-in of fuels has been added to the model, leading to
a preference for using lower Capex technologies and
There are some differences between this year’s scenario using drop-in as long as possible, even though e-MGO
results and those presented in the 2020 edition of our and bio-MGO are assigned higher costs than ammonia
forecast (DNV, 2020). The list of scenarios was different in and methanol variants.
Figure 5.4
Shipping emissions reduction contribution by measure type compared with a baseline with current carbon intensity
for IMO ambitions scenario 7 (left) and Decarbonization by 2050 scenario 19 (right)
IMO ambitions scenario 7 Decarbonization by 2050 scenario 19

1200 1200
1000 1000
CO2 emissions (MtCO2)
CO2 emissions (MtCO2)
800 800
600 600
400 400
200 200
0 0
©DNV 2022
22
24
26
28
30
32
34
36
38
40
42
44
46
48
50
22
24
26
28
30
32
34
36
38
40
42
44
46
48
50
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Fuel Speed reduction Energy efficiency Logistics Baseline CO2 emissions
©DNV 2022
66
5.4 Emissions reduction contribution by measure

Figure 5.4 shows CO2 emission trajectories towards carbon-neutral fuels picks up. Beyond 2040, the use of
2050 for scenarios 7 (IMO ambitions, Low electro) and 19 carbon-neutral fuels become the dominant measure to
(Decarbonization by 2050, Low electro), and the contri- reduce CO2 emissions from baseline. Comparing
bution to emission reductions from various measure scenarios 7 (IMO ambitions) and 19 (Decarbonization by
types. These trajectories are compared with a baseline 2050), there is a somewhat higher uptake of speed
where the 2022 emission intensity is kept constant reduction in the latter, as well as more carbon-neutral
throughout the period. In line with previous analysis fuel being required. For other scenarios, the picture
(DNV, 2021a), carbon-neutral fuels make only a limited looks the same as in these two plots; the higher cost of
contribution to emission reduction before 2030. carbon-neutral fuels causes most ships to benefit from
Requirements are met primarily by the increased share energy-efficiency measures, logistics improvement and
of LNG, energy-efficiency measures, logistics improve- speed reduction before the use of carbon-neutral fuels
ments and speed reduction. After 2030, the use of is scaled up.
5.5 Fuel families’ contribution to the 2050 energy mix

We now look closer at how the different fuel families the blue fuels are given preference (Low or Very Low
contribute to the 2050 energy mix in our scenarios. blue). In these scenarios, the price of fossil fuels is also
Figure 5.5 shows the mid-century energy mix of the fuel low. Hence, drop-in solutions – combining cheap fossil
family variation scenarios for the IMO ambitions scenarios fuels with expensive biofuels – compare well with solu-
with no fuel-specific variation (i.e., 1,3,5,7,9,11). tions requiring more expensive onboard fuel technology.
Across these scenarios, 55% to 65% of the consumed Looking at the energy mix in the Decarbonization by 2050
energy is fossil. This stable share reflects uptake of scenarios (Figure 5.6), all fossil fuels are removed by
carbon-neutral fuels being governed primarily by policy, policy requirements. As expected, the biofuels dominate
and that only in the Very Low bio and electro scenarios is the fuel mix in scenarios where the bio- price is advanta-
the fossil ratio slightly lower due to biofuels and electro- geous (Low and Very Low bio). However, the bio- alterna-
fuels being cost-competitive with fossil fuels in some tives are also strongly present in scenarios where blue
regions. fuels are given preference (Low and Very Low blue), with
blue fuels reaching only a 58% share under the most
The biofuels dominate the carbon-neutral share in advantageous conditions.
scenarios where the bio-price is advantageous (Low or
Very Low bio). In scenarios where electrofuels have the In scenarios where electrofuels have the price advantage
price advantage (Low or Very Low electro) they can (Low and Very Low electro) they are able to outcompete
outcompete the bio- alternatives. the bio- alternatives.
Both the bio- and electrofuel families have drop-in fuels In general, the share of drop-in fuels among the
that are compatible with conventional fossil fuel technol- carbon-neutral fuels is lower in Decarbonization by 2050
ogy. These drop-in fuels are bio-LNG or e-LNG for LNG, scenarios than in IMO ambitions. This is because the
and bio-MGO or e-MGO for MGO/LSFO. This is not the decarbonization regulations require all ships to be fully
case for the blue fuel family, and bio- alternatives there- carbon-neutral when 2050 is approaching (and
fore also dominate in the IMO ambitions scenarios where newbuilds from 2040), more ships tend to invest in
67
Figure 5.5
The 2050 energy mix of IMO ambitions family variation scenarios
55% 59%
45% 41%
Lower Lower
cost bio 0% 0% 0% 0% cost
Very Low bio (1) Very Low electro (5)
electro-
62% 65%
fuels
38%
26%
0% 0% 9% 0%
Low bio (3) Low electro (7)
Large amounts of IMO Large amounts of

sustainable biomass ambition renewable electricity
64%
33%
1% 2%
Low fossil
Large amounts of and blue (11)
carbon capture
65%
and storage
29%
0% 6%
l
els
Bio
e
ssi
Blu
ofu
Fo
Very Low fossil
and blue (9)
ctr
Ele
©DNV 2022
Lower cost
fossil and blue
ammonia or methanol technology instead of fulfilling the modelling does not apply specific limits on the availability
requirements with carbon-neutral drop-in fuel. of fuels but simulates availability constraints through
variation in fuel prices between the fuel families. The
As Figure 4.4 depicts, these results show that the question results show what will be taken up of the various fuels
of availability of sustainable biomass for biofuel produc- given the prices in each scenario. If for example the level
tion is the most crucial question for the future energy mix. of sustainable biomass is lower than needed, the price will
However, the electro and blue fuels also come with be too high and other fuels will take their place, leading to
constraints on availability, mainly related to ramp-up of either the Low electro or Low blue scenarios, in which
production rather than availability of energy sources. The biofuels will be replaced with electro or blue fuels.
68
Figure 5.6
The 2050 energy mix of Decarbonization by 2050 family variation scenarios
100% 100%
Lower Lower
cost bio 0% 0% 0% 100% 0% 0% 0% cost
Very Low bio (13) 76% Very Low electro (17)
electro-
fuels
24%
0% 0% 0% 0% 0%
Low bio (15) Low electro (19)
Large amounts of Large amounts of

Decarbonization
sustainable biomass by 2050 renewable electricity
83%
14%
0% 3%
Low fossil
Large amounts of and blue (23)
carbon capture
58%
and storage 42%
0% 0%
l
els
Bio
e
ssi
Blu
ofu
Fo
Very Low fossil
and blue (21)
ctr
Ele
©DNV 2022
Lower cost
fossil and blue
5.6 Investment needs

All scenarios described in the preceding section will carbon-neutral fuels (see Chapter 4). The Capex for
require substantial investments if they are to be realized. carbon-neutral fuel infrastructure includes investment
This investment is needed in onboard technologies needs for production of primary energy61 (e.g., genera-
allowing ships to use new fuels (see Chapter 3) and in tion of renewable electricity for electrofuels); fuel
onshore infrastructure for producing and distributing production plans (e.g. electrolysis plant or methanol
61 Due to lack of reliable data, the capital cost associated with cultivation and harvesting of biomass has not been included in the estimate of investment need
69
synthesis plan); and, distribution and bunkering of fuels As can be seen from the fuel mixes in Figure 5.5 and
to ships. Data is taken from DNV’s main Energy Transition Figure 5.6, Decarbonization by 2050 scenarios require
Outlook report (DNV, 2022), as well as from literature about 2.5 times more carbon-neutral fuel and corre-
sources (e.g., Brynolf, 2018; Navigante, 2019; IEA, 2020). sponding capital for investment onshore compared with
The data is used to estimate the total investment needs. IMO ambitions scenarios. The average annual fuel
infrastructure costs are in the range USD 28bn to 90bn to
The investment needs in the 24 scenarios are shown in decarbonize by 2050. Including the added energy costs,
Figure 5.7, accumulated for the period 2022–2050 and the annual fuel costs for the ship could increase by more
separated between fuel infrastructure and onboard than USD 100bn to 150bn when fully decarbonized, 70%
investments. Averaging the accumulated onboard to 100% more than today.
investments over the period gives annual investment
costs in the range USD 8bn to 28bn for the Decarboniza- The results show that the largest onshore investment
tion by 2050 scenarios. The largest investments come in needs are associated with renewable electricity produc-
scenarios with high uptake of ammonia or methanol, tion and electrolysis plants, seen in scenarios with Low
which require more expensive fuel systems. Figure 5.7 and Very Low electrofuel prices.
also shows that fuel infrastructure investments will
outpace onboard investments in almost all scenarios.
Our modelling also indicates that decarbonizing ship-

ping completely by 2050 will require significantly higher
investments than following the present IMO ambitions.
Figure 5.7
Accumulated investment need in fuel infrastructure and onboard technologies allowing ships to use new fuels,
for all 24 scenarios
IMO ambitions 2050 Decarbonization by 2050
2.5 Electro
Capex (trillion USD / 1012 USD)
2.0
Bio Electro Blue Bio Blue
1.5
1.0
0.5
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
©DNV 2022
Scenario No.
Total Capex onshore 2050 Total Capex on vessels 2022–2050 (trillion USD / 1012 USD)
©DNV 2022
70
5.7 Exploring the effect of first movers and increased

availability of fuels
It is not only cost considerations that drive the evaluations uptake increases significantly with higher initial availabil-
made by the shipowner. How shipowners perceive the ity, both in the short and long terms. But Figure 5.8 also
availability of fuels, and the knock-on effects of decisions shows that uptake of ammonia increases in other regions
made by other players, are both likely to play a role. We – exemplified by Middle East and North Africa (MEA) – as
use our GHG Pathway Model to explore the impact of well as globally, meaning that the initial availability in
increased availability of ammonia in selected regions. selected regions has ripple effects beyond their borders.
Specifically, we run scenario 19 (Decarbonization by 2050
scenario) with increased initial availability of ammonia in We have modelled the effects of increased initial avail-
Europe (EUR) and South East Asia (SEA). This may repre- ability in a scenario favourable to ammonia. We expect
sent a situation where first movers such as shipowners, similar effects for other carbon-neutral fuels, given that
energy suppliers or cargo owners initiate projects they have been assigned favourable conditions in the
making large volumes of the fuel available in these scenario design. With higher initial availability, uptake of
regions (e.g., related to green shipping corridors). new fuels increases significantly within and beyond the
region.
Figure 5.8 shows the uptake of ammonia in EUR and SEA,
with both low and high initial availability. We see that the
Figure 5.8
Ammonia’s share in total fuel consumption globally and in regions Europe (EUR), South East Asia (SEA),
Middle East and North Africa (MEA), in scenario 19 (a Decarbonization by 2050 scenario). Dotted lines show
scenario with low initial availability of ammonia in all regions, solid lines show case with high initial availability
of ammonia in EUR and SEA
45 High – EUR
40 High – MEA
High – Global
35
High – SEA
Share of ammonia (%)
30
High initial
25 availability
20
Low – EUR
15
Low – MEA
10 Low – Global
Low initial
5 Low – SEA
availability
©DNV 2022
0
2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
©DNV 2022
71
72
Appendix
APPENDIX
A.1 Regulatory input

The main uncertainty on the regulatory input is the level cap-and-trade scheme. In both cases, assuming that the
of ambition in 2050. The current IMO ambitions are for a ambition will be met, the price will be the cost gap
70% reduction in carbon intensity and a 50% reduction in between current and carbon-neutral solutions. We
total GHG emission relative to 2008. These will be assume that the technical requirement is likely to be
reviewed in 2023, and a proposal is on the table to fully implemented as this is a well-known approach by the IMO,
decarbonize shipping by 2050. This uncertainty is while market-based measures is a novel concept in the
reflected in our scenarios with two ambition pathways, IMO. As a simplification, we model the trajectories in the
current IMO ambitions and Decarbonization by 2050. two ambition pathways through design and operational
requirements, and do not include a global CO2 price.
The IMO has finalized developing the first regulations to Assuming that a technical requirement is implemented,
support its ambitions in the short term – the EEXI and CII. the trajectory would be the same and the technology
Both ambition levels in our modelling, IMO ambitions and decision would not be different. We have included a
Decarbonization by 2050, include these measures. The regional carbon price for ships trading in Europe based
IMO has started working on the next set of regulations to on projections on the EU ETS price under the two scenar-
ensure that the 2050 ambitions will be met. There are ios modelled by DNV’s Energy Transition Outlook global
proposals for both market-based measures setting a price energy system model in (DNV, 2021d) and (DNV, 2022).
on CO2 and technical requirements setting emission
intensity limits. The CO2 price would be negotiated by the Table A.1 gives the specific assumptions for the two
IMO in the case of a levy, and by the market in the case of a ambition levels.
Table A.1
Assumptions on regulatory measures and GHG emissions reduction (%)
Technical requirements Market-based measure

Operational requirements
Ambition Newbuild requirements Carbon price
(gradually increasing)
Currently adopted EEDI Currently adopted CII and ETS allowance prices for ships
requirements: up to 30% EEXI requirements when operating in Europe
reduction depending on ■ 2030: 40% reduction ■ 2023–2030: USD 22/tCO2
ship type to 95/tCO2
IMO ambitions ■ 2050: 75% reduction
■ F
rom 2035: 50% to 80% ■ From 2030: up to USD
reduction depending 135/tCO2
on ship type
■ F
rom 2040: 90% reduction
Currently adopted EEDI Currently adopted CII and EEXI ETS allowance prices for ships
requirements: up to 30% requirements when operating in Europe
reduction depending on ■ 2030: 40% reduction ■ 2023–2030: USD 14/tCO2
ship type to 150/tCO2
Decarbonization by 2050 ■ 2050: 100% reduction
■ F
rom 2035: 50% to 80% From 2030: up to USD
©DNV 2022
■
reduction depending 250/tCO2
on ship type
■ F
rom 2040: 90% reduction
73
A.2 Projection on fuel prices

Future fuel prices are challenging to predict, but a Carbon-neutral fuels: Levelized cost of production and
systematic analysis of different fuel supply chains (Figure distribution are used as proxy for price. Bottom-up costs
4.3) allows us to estimate realistic spans in production are estimated per carbon-neutral fuel supply chain,
and distribution costs per fuel. This in turn gives us including:
insights into the most important cost drivers for
carbon-neutral fuels. We have updated DNV’s Marine — Production and processing steps
Fuel Price Mapper tool (DNV, 2020) that models the cost — Distribution
of various marine fuels (Figure A.1). It specifically models — Cost of CO2 feedstock (as applicable)
the production steps for different processes, and
includes the regional costs for different kinds of biomass, Fossil fuels: Historical relationship between fossil fuel
electricity, fossil energy and CCS, aligned with DNV’s price and the price of crude oil or natural gas are used to
Energy Transition Outlook model of the global energy estimate future fuel prices
system until 2050 (DNV, 2021b, 2022).
Figure A.2 shows estimated high and low prices for fuels
Two different approaches are applied for carbon-neutral in mid-century, calculated as a global mean average of all
and fossil fuels: 10 global regions as defined in DNV’s Energy Transition
Outlook model of the global energy system to 2050.
Figure A.1
DNV Marine Fuel Price Mapper
PRIMARY
FUEL COST
ENERGY PRICE
CO2
Cost of CO2
feedstock
Biomass Biofuels
Electricity Production Distribution Electrofuels ©DNV 2022
Fossil energy Blue fuels
©DNV 2022
74
Appendix
Figure A.2
Estimated high and low prices for fuels in 2050. The prices shown include both production and distribution costs
and have been taken as a global mean average of all regions. Fossil-fuel prices do not include carbon price
60
High Low
50
40
Price (USD/GJ)
30
20
10
0
©DNV 2022
O
ia
ia
l
2
2
no
no
LH
LH
on
on
LN
LP
LN
LN
G
HF
G
ha
ha
e-
/M
M
e
m
o-
e-
bu
o-
e-
et
et
am
am
O
bi
m
bi
SF
e-
o-
e-
ue
VL
bi
bl
©DNV 2022
75
A.3 Energy-efficiency measures

DNV’s own Abatement database for different ship types Our model does not evaluate the uptake of each single
is used as input to DNV’s GHG Pathway Model. The measure (e.g., waste-heat recovery, air-cavity lubrication).
Abatement database covers costs and emission-reduc- Interactions between the measures are complex to
tion potential for many technical and operational model. We instead compile the energy efficiency (EE)
measures allocated into predefined ship categories. Data measures into internally consistent packages as
on costs and reduction effects for operational and presented in Table A.2.
technical measures are based mainly on data from
available literature; more than 30 three-phased energy The measures included in the different EE packages will
management projects; fuel-consumption data from ship depend on the applicability for the ship type in question.
reports; DNV’s Technology Outlook activities; and This study allocates the EE measures in packages for six
COSSMOS62 modelling and simulation projects. main ship segments.
A.4 Speed reduction

The model applies five different levels of speed reduc- are estimated based on reported fuel-consumption data
tion: 0% (sailing at 75% to 80% of maximum continuous from more than 2,000 vessels. Percentage main power
rating, MCR63), 10%, 20%, 30% and 50%. The resulting reduction is larger at 10% and 20% speed reduction than
reductions in main-engine power for an individual vessel at 30% and 50% where the resistance from wind and
62 DNV COSSMOS: Computer platform for modelling, simulation, and optimization of complex ship energy systems
63 The MCR is the maximum power output from an engine operating continuously within safety limits
Table A.2
Defining the energy-efficiency (EE) packages
EE Group Maturity Explanation
Average energy efficiency of a vessel built before 2015. Includes basic operational measures, as well as
Baseline EE –2015 standard hull cleaning, propeller polishing, engine auto-tuning and optimization of cargo handling
systems.
Average energy efficiency of a vessel built after 2015 and until 2020. Includes hull form optimization,
basic machinery improvements, variable frequency drives, shaft motor/generator, and measures to
Basic EE 2015–2020
improve hydrodynamic propulsion, such as devices before the propeller and high-efficiency propel-
lers and rudders.
Energy-efficiency measures expected to be mature within five years. Includes batteries, waste-heat
Enhanced EE 2020–2025 recovery systems, bow shapes optimized for real sea states, variable engine speed and improved
steam-plant operation.
Energy-efficiency measures expected to be mature within 10 years. Includes, among other measures,
Advanced EE 2025–2030
hard sails, solar panels, next-generation waste-heat recovery systems, and reduced-ballast design.
©DNV 2022
Measures expected to mature in more than 10 years are placed in the cutting-edge package, including
Cutting-edge EE 2030–
digital twins and onboard wind turbines.
76
Appendix
waves becomes more prominent. As much as 30% to 35% The fleet sailing in 2019 would already have imple-
less fuel is used when speed is reduced by 20%, and 60% mented some of the energy-efficiency and speed-re-
to 67% less when the speed reduction is 50%. Speed duction measures. We have assumed that all vessels
reduction comes at a cost. As the transport capacity of built before 2015 will have the Baseline EE package
the vessel is reduced, its earning capacity also declines. while those built from 2015 will have the Basic EE
More vessels would have to be built to cover for the lost package. The difference in efficiency can be observed
capacity. In addition, the cargo owner has increased in the MRV data for 2018 published by the European
costs due to capital being tied up through longer sailing Commission (European Commission, 2020). In addi-
times. This is reflected in the modelling, where the cost of tion, the average speed from the AIS data is used to set
speed reduction is based on the charter rate of the vessel an already implemented speed reduction on the
type and included when considering the most cost-effec- baseline fleet in 2019. The model evaluates all combi-
tive measure to apply. The model factors in the applied nations of EE packages and speed reductions and
speed reduction and adds more vessels to make up for selects the combination with the highest net present
the reduced transport capacity. value (NPV).
A.5 Logistics
Toward 2050 we expect gradual improvements in the We expect average ship sizes to increase by 40% for
supply chain to increase vessel utilization by about 25% LNG tankers, 30% for containerships and 10% for
for deep-sea trades except bulk; approximately 5% for bulkers. The sizes of other types of ship will remain as
deep-sea bulk; and, by some 20% for short-sea trades. today.
77
A.6 Trade growth

Studies have reported that international world Figure A.3
maritime trade could grow between 25% and 250%
Projected transport work (billion tonne-miles) up to
by 2050 (Smith et al., 2014; ITF/OECD, 2019; DNV, 2050 by main ship categories
2019a, 2020a). The Fourth IMO GHG study projects
80 000
between 40% and 115% growth (Faber et al., 2020).
The large span in the projections indicates substantial
Transport work (bn tonne-miles)

uncertainty, which has been explored in the 2020
60 000
edition of our Maritime Forecast to 2050 (DNV, 2020).
This year we use only DNV’s own updated projection 40 000

with overall 29.55% growth between 2022 and 2050
in seaborne trade in tonne-miles, used in Maritime
Forecast 2021 edition (DNV, 2021c), see Table A.3 and 20 000
Figure A.3. Most of the growth will come before 2030,
after which global seaborne trade will stabilize.
Growth in certain segments, especially gas and the 0
22
26
30
34
38
42
46
50
container trade, will outpace the average rate.
20
20
20
20
20
20
20
20
However, as the global demand for coal and oil peak,
Service Container Liquid tanker
©DNV 2022
so will their trade, reducing their seaborne trade by
Passenger Gas tanker Bulk
more than two-thirds and one-third, respectively.
Other cargo
©DNV 2022
Table A.3
Seaborne-trade demand growth assumptions
Average annual change
Assumptions 2022–2030 2031–2040 2041–2050 Total change 2022–2050
Bulk 1.4 % 0.9 % –0.1 % 22.3 %
Liquid tank 0.5 % –0.9 % –1.3 % –15.9 %
Gas tanker 4.4 % 3.6 % 2.2 % 160.2 %
Container 2.9 % 1.7 % 1.5 % 77.2 %
Other cargo 2.2 % 1.2 % 1.0 % 50.5 %
Passenger and Service 1.7 % 0.8 % 0.3 % 31.2 %

©DNV 2022
Total growth 1.6 % 0.9 % 0.3 % 29.5 %
78
Appendix
A.7 Converter options, maturity, and compatibility

The allowed engine/fuel cell and fuel-system options, incur extra Capex for required modifications to the engine
compatible fuels and retrofit options are indicated in and/or to the tanks and fuel system. Allowed retrofit
Figure A.4. Drop-in fuels are those that can be used in an pathways have been determined on the basis of the
engine or fuel cell without any additional retrofit Capex. technical feasibility, with focus on the implied conversion of
For each converter option, the model calculates the fuel-storage systems and engines to each given retrofit
cheapest fuel combination that will meet the regulatory fuel. Options that involve a change in the engine type – for
requirements. Thus, for a dual-fuel methanol engine, the example, from an ICE to an electric motor – have been
cheapest combinations of bio-methanol, e-methanol, deemed to be technically unfeasible for the general fleet,
bio-MGO, e-MGO and VLSFO/MGO will be calculated. so have not been allowed in the GHG Pathway Model.
Drop-in fuel may be utilized 100%, or in different fuel Retrofits from one fuel to another have also been disre-
blends; for example, a mono-fuel engine can run on a 30% garded where they would involve great differences in
VLSFO/MGO and 70% bio-MGO blend. volumetric energy density; for example, VLSFO/MGO to
hydrogen. Finally, retrofits of vessels fuelled by carbon-neu-
We also allow for retrofits from certain engine options to tral variants of ammonia, hydrogen, and methanol to use
another, as indicated in Figure A.4. In such cases, this will other fuels have been disallowed altogether.
Figure A.4
The energy converters, fuel options and transitions allowed in the GHG Pathway Model
Blue Blue
FUEL CELL ammonia hydrogen
AND FUEL
SYSTEM Electricity
e-MGO e-LNG e-methanol e-ammonia e-hydrogen
from grid
bio-
bio-MGO bio-LNG
methanol
ENGINE VLSFO/
HFO LNG LPG
MGO
MF ICE
MF ICE with scrubber
DF LNG ICE
DF LPG ICE
DF methanol ICE
DF ammonia ICE
DF hydrogen ICE
Hydrogen FC
Ammonia FC
©DNV 2022
Battery EM
Key: Dual fuel (DF); electric motor (EM); fuel cell (FC); internal combustion engine (ICE); liquefied natural gas (LNG);
Drop-in Retrofit
liquefied petroleum gas (LPG); mono fuel (MF)
©DNV 2022
79
A.8 Newbuild and retrofit fuel technology Capex

Our GHG Pathway Model estimates the investment cost of alternative fuels, and communication with industry
implementing alternative fuels and energy-efficiency actors.
measures on board the analysed fleet. Investment costs
are different for each engine/fuel cell and fuel system There have been a number of developments within the
shown in Figure A.4. They are divided into the cost of uptake of alternative fuels in shipping since the 2020
engine and fuel-supply system and the cost of the edition of DNV’s Maritime Forecast to 2050 was
fuel-storage system. The investment cost of implementing published (DNV, 2020). For example, 2021 saw the
alternative fuels depends on whether the vessel in ques- world’s first order of a methanol-fuelled container
tion is a newbuild or an existing vessel needing a retrofit. vessel64 and delivery of the first ferry to be fuelled by
liquefied hydrogen65. These developments have
As an example, the engine and fuel-supply system of provided us with new information regarding the cost
vessels running on LNG are assumed to be more expen- associated with implementation of alternative fuels on
sive than those running on methanol. Likewise, storing board vessels. In turn, this has caused us to make some
methanol as a fuel on board a vessel is assumed to be changes to our input data for Capex in the GHG Pathway
cheaper than storing LNG. Estimated cost-data are based Model. In general terms, the costs have been revised
on an extensive review of literature (Taljegard, Brynolf, upwards compared with in the previous Maritime
Grahn, Andersson, & Johnson, 2014; FCBI, 2015; de Vries, Forecast to 2050 study. In particular, this is the case for
2019) reported newbuild prices for vessels running on vessels running on methanol.
64 https://www.maritime-executive.com/article/maersk-orders-first-methanol-fueled-containership
65 https://www.offshore-energy.biz/worlds-1st-hydrogen-powered-ferry-delivered
80
Appendix
A.9 New features of our model

This year’s enhanced model includes three major
upgrades: regionalization of fuel prices and fuel availabil-
DNV’s GHG Pathway Model
ity, improved fuel blend-in and pilot fuel functionality,
and a simple lookahead for technology investments. estimates the investment cost of
implementing alternative fuels and
Regionalization of fuel prices and fuel availability
Fuel prices are differentiated based on 10 regions as per energy efficiency measures on
DNV’s Energy Transition Outlook global energy system
board the analysed fleet.
model (DNV, 2021b). The fuel price considered in the NPV
calculations for each ship will then depend on the area of
operation.
In each of the 10 regions, each fuel is assigned with an

The dual-fuel ICE engines are configured with some
availability level of 1 (low), 2 (medium), or 3 (high). The
share of pilot fuel, resulting in a need for MGO (fossil or
initial availability level of bio-MGO and e-MGO is set to
carbon-neutral) to have a share in the fuel mix for these
3, since they can use the existing distribution and
converters.
bunkering infrastructure of liquid fossil fuels. LNG,
bio-LNG and e-LNG are set at initial level 2, while
Simple lookahead for technology investments
hydrogen, ammonia and methanol are at availability
Depending on the shipowner’s investment horizon, the
level 1. Shipowners with high-risk willingness will see
model looks some years ahead when evaluating technol-
fuels at any availability level (level 1 through 3) to be
ogy newbuild and retrofit options. When a technology
available and feasible for their operation. More risk-
has been selected, the cheapest compliant drop-in and
averse owners will only consider fuels with higher
speed reduction combination (and for newbuilds, the
availability (2 or 3). The availability level per fuel in each
energy-efficiency package too) is calculated each year. A
region is updated year-by-year, following how the
ship, newbuild or retrofit, may then, for example, install
uptake of fuel develops in that region. With increasing
dual-fuel ICE ammonia to be prepared to meet the
availability, an increasing share of shipowners will
compliance requirements 10 years ahead, but will use
consider the fuel a feasible option for their operation.
only MGO in the initial years before it becomes necessary
Eventually, it will be the cost evaluation of all feasible
to use an increasing share of carbon-neutral fuel to
options that will determine which fuel will be chosen for
comply with regulations.
the ship.
Fuel blend-in functionality and pilot fuels

For each vessel, the most cost-effective share of drop-in
fuels for each converter is calculated, allowing the
shipowner to use the exact required amount of the
expensive drop-in fuels to reduce the CO2 emissions. This
allows shipowners to run longer on existing technologies
and delay expensive investments.
81
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Intelligence Energy
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real world costs, tight margins and safety challenges with virtual IEA (2017b), Technology Roadmap – Delivering Sustainable
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THE PROJECT TEAM
Ovrum, E., & Dimopoulos, G. (2012), A validated dynamic model of

the first marine molten carbonate fuel cell. APPL THERM ENG. 35.
This report has been prepared by DNV.
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org/10.1016/j.applthermaleng.2011.09.023 an external network of maritime experts.
Taljegard, M., Brynolf, S., Grahn, M., Andersson, K., & Johnson, H.
(2014), Cost-Effective Choices of Marine Fuels in a Carbon-Con- Steering committee:
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de Vries, N. (2019), Safe and effective application of ammonia as a
marine fuel. Delft University of Technology report for SEA/LNG Lead authors:
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Nikolai Hydle Rivedal, Øyvind Endresen,
Magnus S. Eide
Contributing authors:
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Marius Leisner, Kristian Hammer,
Helge Drösemeyer, Kjersti Aalbu,
Jakub Walenkiewicz, Jeannette Schäfer
Reviewers:
Håkon Hustad, Christos Chryssakis,
Jan Kvålsvold, Martin Wold,
Eirik Nyhus, Terje Sverud
Published by DNV
Design printprojekt GbR, Schulterblatt 58, 20357 Hamburg,

Germany
Images COSCO SHIPPING Lines (52), DNV/Eric Solafoto (2),

Getty Images – Bloomberg Creative Photos (6)/Cultura RF (30)/
iStockphoto (16, 25, 46, 55, 64)/Getty Images (18), stock.adobe.com
– Anders Haukland (77)/Sepia100 (1)/Wojciech Wrzesień (5),
Shutterstock – Avigator Fortuner (44, 61)/ID-VIDEO (56)/Infinitum-
Produx (8)/KeyFame (42)/Martin Bergsma (29)/mzabarovsky (20)/
Nuttawut Uttamaharad (5)/petrmalinak (50)/Tawansak (80)/
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83
About DNV
DNV is an independent assurance and risk management provider, operating in more than
100 countries. Through its broad experience and deep expertise DNV advances safety and
sustainable performance, sets industry standards, and inspires and invents solutions. 
DNV is the world’s leading classification society and a recognized advisor for the maritime
industry. We enhance safety, quality, energy efficiency and environmental performance of the
global shipping industry – across all vessel types and offshore structures. We invest heavily in
research and development to find solutions, together with the industry, that address strategic,
operational or regulatory challenges.
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MARITIME

Energy Transition Outlook 2022

Let me start with the positive news: newbuild orders

En route to decarbonization targets, employing the full

Foreword2 5 Pathways for decarbonization of shipping  56

Executive Summary 6 5.1 Updated GHG Pathway Model 58

1 Introduction16 5.2 Exploring decarbonization scenarios 60

3 Outlook on ship technologies and fuels 30 Appendix73

3.4 Digitalization – enabling the transition 41 A.5 Logistics 77

EU Emissions Trading System FuelEU Maritime IMO – adopted

Carbon Intensity Indicator Ship Energy Efficiency EEDI/EEXI

We find that: emissions. To maximize the GHG reduction potential

World fleet 923 LNG Order book 534 LNG

1 349 Total 1 046 Total

World fleet Order book

5.5% Total 33.2% Total

Key: Liquefied natural gas (LNG); liquefied petroleum gas (LPG)

The future carbon-neutral energy supply chain

availability, blue ammonia is the preferred fuel, with Concluding remarks

— We explore how evaluating well-to-wake GHG emis-

— We assess the need for investments on board and

2.1 Regulatory developments 24

2 OUTLOOK ON DRIVERS AND REGULATIONS

2023 will see the implementation of further regulatory measures to address

Three key fundamentals are

2.1 Regulatory developments

EU Emissions Trading System FuelEU Maritime IMO – adopted

Carbon Intensity Indicator Ship Energy Efficiency EEDI/EEXI

13 ISWG-GHG 12/3/14, ISWG-GHG 12/3/17

2022 2023 2024 2025 2026 –

IMO LCA Comprehensive

2.2 Well-to-wake GHG emissions and

2.3 The need for standards to support

ity risks, are being further expanded. The EU is

We also see significant regulatory standard develop-

The Poseidon Principles as of spring 2022 represent 29

Decarbonization requires new fuels, — We provide a new snapshot of alternative

— We assess the current and future technical

— We emphasize safety challenges in the

— We explore how digitalization can enable

3.1 Available ship technologies and fuels for decarbonization of shipping 32

3 OUTLOOK ON SHIP TECHNOLOGIES AND FUELS

3.1 Available ship technologies and fuels for

GHG emission-reduction potential of technologies that can contribute to shipping decarbonization

Speed reduction Hull coating Machinery LNG, LPG Carbon capture

>20% 5% –15% 5% –20% 0%–100% >30%

3.2 Status of fuel transition

World fleet 923 LNG Order book 534 LNG

1 349 Total 1 046 Total

World fleet Order book

5.5% Total 33.2% Total

Key: Liquefied natural gas (LNG); liquefied petroleum gas (LPG)

3.3 Outlook for the readiness of onboard

The resulting timeline is our best estimate of the matura-

Methanol 2-stroke engine

Ammonia 2-stroke engine

Hydrogen 4-stroke engine

CCS CCS technology

2022 2026 2030 2034

Foreword2 5 Pathways for decarbonization of shipping 56

Executive Summary 6 5.1 Updated GHG Pathway Model 58

1 Introduction16 5.2 Exploring decarbonization scenarios 60

3 Outlook on ship technologies and fuels 30 Appendix73

3.4 Digitalization – enabling the transition 41 A.5 Logistics 77

2.1 Regulatory developments 24

2 OUTLOOK ON DRIVERS AND REGULATIONS

13 ISWG-GHG 12/3/14, ISWG-GHG 12/3/17

2.2 Well-to-wake GHG emissions and

2.3 The need for standards to support

3.1 Available ship technologies and fuels for decarbonization of shipping 32

3.1 Available ship technologies and fuels for

3.3 Outlook for the readiness of onboard

4.1 Existing fuel supply chain 47

4 OUTLOOK ON ALTERNATIVE FUEL PRODUCTION

56 Planned e-methanol production: https://www.mip.no/en/2020/fast-track-to-carbon-capture-in-norwegian-industry and

5.1 Updated GHG Pathway Model 58

59 Fuel lower heating value.

60 This may be a conservative assumption, as engine manufacturers have a stated