- Major container shipping companies like Maersk, CMA CGM, and COSCO are leading the industry’s green push by investing heavily in dual-fuel vessels.
- With no clear global standard for future green fuels, shipping companies are hedging their bets by ordering vessels equipped to handle multiple fuel types.
- Decarbonizing shipping requires significant investment, regulatory clarity, and global cooperation, with the industry demanding incentives and penalties to promote cleaner fuels.
The container shipping sector is at the forefront of a global effort to reduce greenhouse gas (GHG) emissions. Leading companies are transitioning to dual-fuel vessels capable of running on various green fuels while addressing uncertainty over fuel supplies, costs, and regulations, reports Reuters.
Decarbonization Challenges and Goals
Shipping accounts for approximately 3% of global GHG emissions.
The U.N.’s International Maritime Organization (IMO) has set a 2050 net-zero emissions target, but achieving this goal requires over $100 billion annually in investments and a 100% increase in fuel prices.
Container Shipping’s Outsized Impact
Although container vessels make up a small portion of the global fleet, their higher speeds and fuel consumption significantly impact emissions.
Companies like Maersk, CMA CGM, and COSCO are investing in dual-fuel ships to future-proof their operations against evolving environmental standards.
Dual-Fuel Vessel Trends
Rising Orders for Dual-Fuel Vessels:
As of October 31, 2024, there were 522 dual-fuel vessel orders in the container shipping sector:
- 303 LNG-fueled ships
- 216 methanol-fueled ships
- 2 hydrogen-fueled ships
- 1 ammonia-fueled ship
This represents a massive shift from 2018, when only 4% of new orders were dual-fuel compatible, compared to 65% in 2024.
Fuel Flexibility and LNG’s Role:
Dual-fuel vessels provide the flexibility to use traditional fuels if cleaner alternatives are unavailable or expensive.
LNG, while still a fossil fuel, offers a 23% reduction in GHG emissions and dominates dual-fuel ship orders due to its reliable supply chain. However, methane leaks during LNG production and use are a concern for environmentalists.
Methanol and Ammonia
Companies like CMA CGM, Maersk, and COSCO are heavily investing in methanol-compatible ships. COSCO and CMA CGM are collaborating on a green methanol supply project at major Chinese ports.
MSC is equipping some of its LNG vessels with ammonia-compatible tanks, anticipating future demand.
Biomethane and Biodiesel
Waste-based biomethane and biodiesel are being explored as interim solutions, with companies like Hapag-Lloyd using these fuels for Zero Emission Maritime Buyers Alliance contracts.
However, limited supply makes widespread adoption challenging.
Regulatory and Market Uncertainty
Call for Global Regulations:
Shipping companies advocate for:
- Deadlines to phase out fossil fuels.
- Government incentives for cleaner fuel production.
- Penalties for delayed adoption of green fuels.
Transition Fuels as a Bridge:
Industry experts predict that transition fuels like LNG will play a significant role until 2035 or 2040, giving time for alternative fuels to scale up.
CMA CGM’s Multifaceted Strategy
CMA CGM is a leader in sustainable shipping practices:
- Biodiesel Use: Achieved a 50% reduction in CO₂ emissions per container.
- Fuel Mix Expansion: Adding renewable natural gas (biomethane) to its portfolio.
- Investment in Fleet: Committed $15 billion to new vessels capable of running on various cleaner fuels.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Reuters
