Although the shipping sector is growing, the increase in global marine fuel sales – 20% between 2015 and 2030 – will be substantially lower than the increase in maritime trade, according to Wood Mackenzie.
The IMO’s energy efficiency requirements for new and existing vessels mandate improving fuel efficiency, which will begin to erode demand. Meanwhile, synthetic e-fuels will start to replace traditional varieties.
Chart shows marine LNG is the main source of marine fuel growth in the next decade
Oil marine bunker fuel is expected to peak in 2025, while marine LNG will be the main source of market growth in the longer term. It should displace nearly 0.6 million b/d of oil bunkers by 2030. However, the impact of Russia’s operation in Ukraine on European gas prices could put pressure on the transition to LNG in Europe over the next few years.
In the early 2030s, the global marine fuel market should start to decline. Synthetic e-fuels should become more widespread after 2040, when green hydrogen capacity will be more readily available.
The IMO’s Energy Efficiency Design Index has been a key mechanism to ensure improvements in energy efficiency in the global shipping fleet. It was introduced for new build vessels in 2015, but will now also apply to existing vessels from 2023 onwards. All ships will need to establish an annual operational carbon intensity indicator (CII), which links carbon emissions to the amount of cargo that has been carried over the distance travelled.
But those measures will not be enough to decarbonise the sector. The IMO target to halve overall emissions by 2050 will be a major challenge, and tough new fuel efficiency standards will be required. Emissions will need to decline at a much faster rate after 2030 if the sector is to meet its target. If the IMO commits to net zero, even more will need to be done.