Maritime Decarbonization Strategy 2022

Published — December 8, 2022

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Published December 8, 2022

The Maritime Decarbonization Strategy reviews the progress of the transition in the shipping sector so far and outlines the actions the industry must take to move closer to the Paris 1.5°C trajectory. The conclusions and recommendations presented in the report are based on analyses and modelling work done by the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, outcomes from workshops with center partners and other stakeholders across the maritime industry, and the results from research projects. The report deep-dives into the following four key areas:

  1. Elevating onboard energy efficiency
  2. Enabling alternative fuel pathways
  3. Promoting abatement action through regulation, policy, and commitments
  4. Promoting bold first movers and fast followers
Chapter 01

Chapter 01

The 2022 Maritime Decarbonization Outlook


Breaking the emissions curve this decade will require collective action across the maritime industry: We must develop and deploy new technologies and fuel pathways and implement firm regulations demanding their use. For a hard-to-abate sector like shipping, this transition will take time. It is, therefore, important that we begin dedicating resources to these efforts today.This decade will be crucial.

The first chapter of the Maritime Decarbonization Strategy takes stock of how the maritime industry is progressing towards zero. Recent momentum demonstrates that the sector already has the most important component of any decarbonization strategy – a willingness to act. But current actions are not enough, and the industry must turn to take even more drastic means to bend the rising emissions curve.

Today, we are very far away from aligning with the Paris 1.5 °C trajectory. International and domestic shipping uses approximately 12.6 EJ of energy each year, corresponding to around 300 million tonnes of fossil fuels resulting in ~1.2 GtCO2eq emissions from a well-to-wake (WTW) perspective. To reduce our emissions by 45% in 2030 compared with 2010, we must limit our fossil fuel consumption to ~6 EJ of the total energy demand from the global fleet.

Figure 1: Emissions between 2010 and 2050 based on historical data, ‘the path we are on,’ no decarbonization, and a 1.5°C trajectory based on shipping following the global trajectory presented by the IPCC.

Chapter 02

Chapter 02

Elevating onboard energy efficiency


Onboard energy efficiency offer cost-effective opportunities for decarbonizing and the emissions reduction potential across the industry is significant. Improving efficiency by just 8% - or 1% per year until 2030 - could save ~1 EJ of energy, equivalent to 24 million tonnes of fuel oil and 0.1 GtCO2eq of greenhouse gas (GHG) emissions.

An array of energy efficiency measures and technologies and solutions are ready for use today but lacking commercial incentives and imperfect regulation mean their uptake is limited. Leveraging their full emissions reduction potential will require

  • Shipowners and operators taking immediate actionto increase energy efficiency through rapid uptake ofbest practice. This should include installing energyefficiency technologies when dry-docking andrequesting state-of-the-art designs when orderingnew vessels.
  • Businesses across the maritime value chaindeveloping collaborative business models drivenby transparency and sharing costs and benefits ofincreased energy efficiency in ship operations.
  • The industry supporting the International MaritimeOrganization (IMO) in increasing their regulatoryambitions around energy efficiency.

Shipowners and operators can apply a host of solutions to increase energy efficiency today. Utilizing these measures will immediately reduce emissions and help break the maritime emissions curve while alternative fuel pathways continue to develop. Energy efficiency measures often provide savings in the long term, so they are a no-regret move that the industry should treat as an immediate necessity. Various commercial and technical barriers are currently limiting uptake. However, we can overcome these barriers with clear regulatory action and new collaborative business models based on transparent data sharing.

Uptake of operational and technical energy efficiency measures varies across vessel categories and segments, as shown in Table 1. There are some areas of growing application, particularly in the passenger, cruise, and container segments. In the fragmented bulk and tanker segments, although leading operators are applying energy efficiency measures, overall adoption remains low. As a result, the industry still has substantial potential to save onboard power, reduce energy consumption, and limit emissions.

Table 1: Energy efficiency levers, their potential impact and current uptake.

Chapter 03

Chapter 03

Enabling Alternative Fuel Pathways


Today our industry uses ~300 million tonnes of fossil fuel oil to produce ~12.6 EJ of energy, emitting more than 1 gigatonne of GHG emissions. We must replace fossil fuel oil with low-GHG alternatives to reach our decarbonization goals. The main alternatives include bio-methane, e-methane, bio-methanol, e-methanol, blue ammonia, e-ammonia, bio-oils, and e-diesel. We expect the industry will use multiple fuels in the future, however, all alternatives face technical, safety, commercial, and regulatory challenges.

Current plans for upcoming alternative fuel production capacity suggest that supplies will be unable to meet demand in the coming decades. Long lead times mean we must start now to secure sufficient alternative fuel capacity in 2030 and beyond. The maritime industry can prepare to scale up alternative fuels by:

  • Achieving technological readiness for all alternativefuel pathways and developing standards andregulations that ensure they are used safely, and withenvironmental and social responsibility.
  • Addressing the imbalance between planned alternative fuel production supply and demand with solid investment commitments in large-scale fuel production infrastructure and building the competencies needed to scale up all alternative fuel pathways.
  • Developing regulations and measures that ensurealternative fuel pathways become commercially attractive.

Due to feedstock availability and technology limitations, no single alternative fuel can fulfill demand from the entire maritime industry in the short term. As a result, we expect the fuel landscape to utilize a mix of alternative fuels over the coming decades.

This chapter discusses the status of the four major alternative fuel pathways, their challenges, and how current forecasts for fuel supplies and demand from the shipping industry compare. Finally, we identify how we can use alternative fuels to break the emissions curve this decade and how scaling up production can bring us closer to the Paris 1.5°C trajectory.

Figure 2: Alternative fuel production pathways in shipping.

It is clear that shipping is currently investing more in alternative fuel technology than fuel producers will be able to supply. This disconnect is partly because on-land investments in production infrastructure are much larger and riskier than investments in onboard technologies for alternative fuels. In the following decade, projected supplies will be unable to meet the total demand, with a yearly shortfall of up to 20 million tonnes of alternative fuels. Furthermore, although the outlook indicates there will be a surplus of ammonia, methanol demand may outstrip supply by up to 80 million tonnes.

Figure 8: Expected alternative methanol and ammonia demand from the shipping industry based on orders of ships and industry’s own indication of future investments vs. their expected global supply based on announced project development plans between 2022 and 2040.

For industry wide decarbonization to become a reality, we must overcome the barriers that are preventing alternative fuel scale up and widespread application. Executing the critical actions for methane, methanol, and ammonia in Figure 11 will allow the industry to move swiftly from ambition to implementation and scale-up, so alternative fuels can play a wider role in decarbonization. Across the industry, work towards these critical actions is already underway. Still, we must increase our efforts to be ready for scaling at the end of this decade

Figure 11: Critical actions needed this decade to enable all alternative fuel pathways.

Chapter 04

Chapter 04

Promoting abatement action with regulation, policy, and commitments


Emissions reduction and uptake of new technology need to be incentivized through industry commitments and regulatory reform. Companies across the industry must set ambitious decarbonization targets and report their progress to create the traction and transparency needed to drive the transition forward. In this, it is critical to maintain a people-centered approach to ensure a safe and just transition. As the main regulatory body, the IMO must focus on creating policies, targets, standards and regulations that drive the uptake of decarbonization technologies, eliminate uncertainty, and close the cost gap between fossil and alternative fuels. Specific actions needed this decade include:

  • Ambitious absolute emission targets from the IMOto reduce all GHG emissions from a well-to-wakeperspective and reach net zero by 2050, aligned withthe Paris 1.5°C trajectory.
  • Supplementary emissions intensity and efficiencytargets, intermediate targets for 2030 and 2040,global GHG pricing, and transparent emissionreporting.
  • Fast-tracked development of international rules andstandards by the IMO to support alternative fuels anddecarbonization technologies.
  • Regional, national, and local policy roadmapsencouraging dedicated investments in greenenergy and fuel infrastructure for the maritimeindustry transition and engineering capacity tobuild these facilities.

If all the largest owners made net zero pledges and worked to make them a reality, the emission abatement impact could be significant, amounting to up to a 40% reduction by 2050. However, the number of commitments is currently too small as, worryingly, not all the top companies have set targets. Furthermore, the number of targets is growing too slowly. And even if all the leading shipowners made commitments, this still would not decarbonize the entire industry or align with the Paris 1.5°C trajectory.

Figure 12: Decarbonization targets from the top 30 shipowners in the tanker, bulk, container, and RORO/car segments and their potential impact on global maritime emissions.

Well-to-wake is a simplified methodology that builds on conventional life cycle assessment (LCA) and is well suited to policy and regulations. It considers emissions from the entire fuel lifecycle, from energy harnessing (from, for example, wind, solar, or biomass) to producing fuels and using them onboard. Tank-to-wake, on the other hand, only includes emissions from onboard use (see Figure 13).

Figure 13: Well-to-wake, well-to-tank, and tank-to-wake emissions.

As the table shows, class societies are well underway with developing new rules and guidelines. Furthermore, industry organizations and first mover ship operators, ship designers, shipyards, and port authorities are working through hazard identifications (HAZIDs), hazard and operability studies (HAZOP), and quantitative risk assessments (QRAs) to enable new solutions. However, many rules and standards are still interim drafts or need further development.

Table 5: Gap analysis of maritime rules and standards for alternative fuels and other technologies for decarbonizing vessel power or propulsion.

Chapter 05

Chapter 05

Supporting Bold First Movers and Fast Followers to Unlock the Transition


First movers will be key transition accelerators. Their early actions and pilot projects will inform and inspire decision makers as they unlock technological innovations, identify gaps, develop solutions, and contribute to cost reductions.

The speed of the transition will depend on how quickly first movers from across the supply chain can come together and demonstrate decarbonization solutions, business models, and best practices for fast followers. However, being a first mover can be costly and uncertain. To support them in initiating the transition, we must share the costs, benefits, and risks for first movers. This means:

  • Close collaboration across the value chain, between alternative fuel producers, ports, vessel owners/operators and cargo owners to demonstrate and prove technologies, business concepts, and standards/regulations, and share the learnings, challenges, opportunities, and best practices.
  • Mobilizing regulatory, policy and financial bodies to help de-risk first mover investments and decarbonization activities.
  • Wide support for first mover initiatives that drive collective decarbonization and share costs, benefits, and risks, such as green corridors and Book & Claim systems.

The maritime industry must support first movers and fast followers to safeguard the transition and accelerate progress. The faster first movers can form and execute on investable pathways, the more interested other industry players will be in following their actions, and the faster the industry can align with the Paris 1.5 °C trajectory.

Figure 18: Characteristics of first movers in the maritime industry.

Green corridors lay the foundations for scalable long-term decarbonization solutions by demonstrating what it takes to build alternative fuel supply chains, providing platforms for further scaling technologies, and showcasing new business models for operating zeroemission vessels at scale. They also offer opportunities to try out de-risking mechanisms and exemplify safety standards and prerequisites for using new technologies and alternative fuels.

Figure 20: Green corridors can involve the entire maritime supply chain.

Book & Claim allows first-moving shipping and fuel companies to access a broader market for their services, leading to more certainty around revenue streams. It will enable large and small shipping companies to finance their fleet’s transition via the additional revenue generated. Furthermore, firstmoving cargo owners can use their capital to support alternative fuel supply chains. In this way, a Book & Claim system could be used alongside market-based measures like carbon pricing to share the cost of the transition. When Book & Claim and green corridors are used in combination, the uptake of alternative fuels can be funded through cargo owners who are not even active in the specific geographic area where the green corridor is operating

Figure 22: Physical market vs. Book & Claim market for low emission shipping services.

Fossil fuels

By 2030, we must limit the fossil fuel consumption of the global fleet to

6 EJ

Energy efficiency

Operational measures offer efficiency gains of up to


Alternative fuels

can reduce GHG emissions by over