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Reduction in fossil fuel use will have major impact on maritime industry

Oil consumption is set to peak by the mid-2020s, DNV GL suggests. Product tankers will be the hardest hit, with the fleet numbers plunging 88% by 2050

The natural gas sector is predicted to grow the most, tripling by 2050, while the container trade will double from current levels

THE world is moving away from fossil fuel usage and will see a change in the global mix of fossil and non-fossil fuels use to a 50:50 proportion by 2050 from the current split of 80:20, with attendant effects on the maritime industry, according to a leading chief executive.

Speaking at the Sea Asia 2019 conference DNV GL oil and gas chief executive Liv Hovem cited these figures from its global energy forecast to illustrate how the maritime industry is likely to be affected by these changes.

Within the maritime industry, an energy future that aims at meeting the International Maritime Organization’s targets means that 39% of shipping energy will be supplied by carbon-neutral fuels by 2050 because of the increased use of renewables as well as a combination of carbon capture and storage being used more than traditional heavy fossil fuel oils, said Ms Hovem. This in turn will put a brake on oil consumption growth, she added.

Meanwhile in terms of shipping demand, tonne-mile growth is predicted to plateau at 37% around 2050, and trade will increase in all segments except oil and oil products.

In contrast the sector that will grow the most is natural gas, which will triple by 2050, while the container trade will double from current levels. The hardest hit segment however will be tankers.

With oil consumption set to peak by the mid-2020s, and 90% of global oil trade being seaborne, this will have a direct impact. The crude oil tanker fleet is expected to reduce by 30% by 2050. Product tankers meanwhile will plunge by 88% by 2050.

Turning to the implications for the maritime industry, the panel agreed that the drive towards a lower carbon future should also lead to more widespread use of electric-powered applications on vessels. The offshore support vessel segment, especially among vessels using dynamic positioning, is an obvious segment that can benefit, said Corvus Energy chief executive Geir Bjørkeli.

He also highlighted how switching to battery power can achieve significant savings in the port sector. For example, a container port crane can save 55% on fuel by using technologies that capture energy on certain operations and reuse it.

Giving some advice from an industry that had earlier also been forced to cut emissions, Sembcorp Industries group president and chief executive Neil McGregor asserted climate change is real and action is needed but the change will come from the fund industry.

In the same way that funds, such as large pension funds and sovereign wealth funds, have been influential in changing the power industry, Mr McGregor believed that they will also provide the impetus for change for the maritime industry.

Somewhat reluctantly concurring, Hellenic Chamber of Shipping and Hellenic Maritime Cluster president and Contships Management deputy chairman George Pateras acknowledged that while Greeks generally do not like government to be involved in business, in the case of the renewal of the domestic ferry fleet to meet future requirements, European Union incentives and subsidies will be required.

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