By Lisa Baertlein
LOS ANGELES- Container shipping companies like Maersk CMA CGM and COSCO have ordered hundreds of new vessels in recent years meant to help their industry slash greenhouse gas (GHG) emissions to meet rising demand from customers and regulators around the globe.
Their order books, however, reflect uncertainty over which of a wide array of so-called green fuels will become the standard in the decades to come, and whether supplies will be cheap and abundant enough to keep their fleets in motion.
Decarbonizing shipping is important to global efforts to fight climate change because it accounts for about 3 percent of global greenhouse gases, but accomplishing it will be difficult and costly, requiring billions of dollars in investments in new vessels and fuel production.
The UN’s International Maritime Organization has set a goal to zero out shipping industry emissions by 2050, but policymakers have so far provided little in the way of support or guidance for how companies should get there, leaving the future of the market a mystery.
“No single fuel or technology dominates,” said Knut Orbeck-Nilssen, CEO of Maritime at Norway-based ship certifier DNV.
Faced with that reality, operators of the hulking vessels that ferry thousands of shipping boxes stuffed with furniture, televisions, shoes and toys destined for companies like Walmart Amazon IKEA and Nike are hedging their bets by ramping up orders for hybrid engines designed for several different green fuel types, but which also allow them to fall back on petroleum if those green fuels are unavailable or too costly.
Container shipping companies had pending orders for 522 dual-fuel new vessels as of Oct. 31, according to data from DNV. Of those, 303 are designed to run on liquefied natural gas (LNG), 216 are meant to burn methanol, two would use hydrogen, and one would be equipped to use ammonia, according to the data.
Rebecca Galanopoulos, senior content analyst at maritime software and services provider Veson Nautical, said 65 percent of container vessel orders in 2024 were for dual-fuel engines versus just 4 percent in 2018.
“Major shipping players are future-proofing their fleets,” she said.
The maritime sector each year burns roughly 2.5 billion barrels of heavy fuel oil made from the cheap leftovers of gasoline, diesel and jet fuel production.
Decarbonizing the entire shipping industry could cost over $100 billion per year, and double the industry’s fuel prices, according to the UN’s Conference on Trade and Development.
While the container shipping industry’s 6,643 vessels account for a small fraction of the global fleet, they have an outsized impact on the climate because they travel faster and consume more fuel than other vessels, shipping experts said. Container shipping companies are now at the vanguard of the green push, having ordered more than twice the number of alternative-fuel vessels than any other cargo sector, like petroleum tankers or bulk carriers, according to DNV. – Reuters