ABS 2024 Outlook: Navigating the Shipping Industry’s Path to Net Zero by 2050


The latest research from ABS highlights the critical factors affecting the shipping industry’s journey to net zero by 2050, emphasizing geopolitical instability, the scalability of fuel production, and retrofitting existing vessels.

The sixth edition of ABS’s annual series investigates carbon-neutral fuel pathways and transformative technologies, providing an update on ABS’s long-term energy forecast. This report explores the constraints and opportunities within the evolving global trade dynamics that will shape the future of shipping.

Industry Vision
Christopher J. Wiernicki, ABS Chairman and CEO, stated, “The 2024 outlook delivers unprecedented visibility into the ‘ecosystem’ of shipping, underscoring the collaborative efforts required to retrofit existing fleets and enhance the capacity of shipyards for new, greener vessels. Achieving the industry’s commitment to a sustainable transformation will require continued diligence, innovation, and global cooperation to effectively overcome the technical and economic challenges highlighted in this report.”

Shift in Global Fleet Composition

The report highlights a significant shift in the composition of the global fleet towards more sustainable energy sources. Approximately 50% of the current order book, in terms of gross tonnage, features dual-fuel engines and a shift towards a diversified set of fuels, particularly LNG, methanol, and ammonia.

Fuel Mix Forecast

Transition to Cleaner Fuels: The forecast for 2024 and through 2050 indicates a substantial and continuous transition in the maritime sector towards cleaner alternative fuels.

Fossil Fuels: Market share is anticipated to decline to 15% by 2050.
Methanol: Utilization is expected to rise to 42% by 2050.
Ammonia: Utilization is anticipated to increase to 33% by 2050.

Regulatory Pressures and Adoption of Technologies

As regulatory pressures increase, the adoption of energy-efficiency technologies and alternative fuels is expected to rise. To meet the 2040 IMO checkpoint, annual greenhouse gas (GHG) emissions must be reduced by 70%, with at least one-third of the tonnage using alternative fuels.

Shipyard and Repair Yard Capacity

Major shipyard capacity is expected to moderately increase by about 5% until 2035. Due to additional shipbuilding demand, new builders are anticipated to emerge from regions such as India, the Middle East, the Philippines, and Vietnam. Current repair yard capacity is expected to meet demand through 2027. However, the demand for retrofits will continue to increase through 2035, necessitating additional repair yard capacity to support fuel conversions.

GHG Abatement Costs

According to ABS’s GHG abatement cost methodology and current fuel prices, biofuels and blue fuels will have lower carbon abatement costs compared to other alternatives.

FuelEU Maritime requirements and similar forthcoming regulations from the IMO introduce new complexities. Stakeholders will need to consider pooling credits for compliance to navigate these regulatory landscapes effectively. The ABS 2024 Outlook underscores the need for collaborative and innovative efforts within the shipping industry to achieve net zero emissions by 2050. The report highlights the transition to cleaner fuels, the increase in shipyard and repair yard capacities, and the adoption of energy-efficient technologies. Global cooperation and strategic planning will be essential in overcoming the technical and economic challenges ahead.

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Source: American Bureau of Shipping