Container Shipping’s Green Revolution: Dual-Fuel Dominance

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  • 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:

  1. 303 LNG-fueled ships
  2. 216 methanol-fueled ships
  3. 2 hydrogen-fueled ships
  4. 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:

  1. Deadlines to phase out fossil fuels.
  2. Government incentives for cleaner fuel production.
  3. 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:

  1. Biodiesel Use: Achieved a 50% reduction in CO₂ emissions per container.
  2. Fuel Mix Expansion: Adding renewable natural gas (biomethane) to its portfolio.
  3. Investment in Fleet: Committed $15 billion to new vessels capable of running on various cleaner fuels.

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Source: Reuters