- Few market participants expect quick adoption of alternative fuels
- New ship orders fall amid dilemma over alternative fuel selection
- Ship owners may focus on secondhand market to grow fleet
Despite the push for decarbonization and alternative carbon-neutral fuels in the maritime sector, only a third of dry bulk shipping market participants expect new dry bulk orders to be fueled by these substitutes in the next five years, according to a survey by S&P Global Commodity Insights.
The survey, conducted in November to gauge the mood of dry bulk market participants in the wake of the International Maritime Organization’s greenhouse gas emissions regulations, had 112 respondents consisting of shipowners, ship-operators, charterers, shipbrokers and analysts.
Energy efficiency certification is mandatory
A flurry of new emission regulations slated for introduction next year have made shipowners reluctant to commit to newbuilding orders amid a lack of clarity regarding the most dependable and easily available zero-carbon alternative fuel.
The IMO has made it mandatory for ships to get energy efficiency certification known as the Energy Efficiency Existing Ship Index or EEXI from Jan. 1, 2023, which is based on a vessel’s design parameters.
From 2023, the collection of CO2 emission data also begins for reporting a ship’s annual operational Carbon Intensity Indicator or CII, based on which ships will get an environmental rating from A to E in 2024. A ship assigned a D rating for three consecutive years or an E rating in a single year has to come up with a corrective action plan to improve its rating.
Among the interesting findings from the survey, the majority of participants expected the earnings or returns from different dry bulk segments such as Capesize, Kamsarmax/Panamax and Ultramax/Supramax to remain almost at par with one another over 2023, implying a subdued market next year.
The new emission regulations could also spawn a multi-tier market based on ships’ environmental ratings and energy efficiency specifications, the respondents said.
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Source: Platts
