UMAS: 40 pct improvement in efficiency needed in this decade

A new report by University Maritime Advisory Services (UMAS), an independent advisory and research consultancy specializing in maritime and ocean-related sustainability issues, sheds light on the pressing need for a significant improvement in energy efficiency in the global shipping industry by 2030.

While much of the discourse surrounding shipping decarbonisation centers on the speed at which low and zero GHG emission fuel production can be ramped up, the report asserts that achieving the near-term 2030 target requires a step change in energy efficiency.

Specifically, the report suggests a need for approximately 40% improvement in efficiency compared to 2018 or a 55-60% increase in efficiency compared to the fleet’s average efficiency in 2008, regardless of how new fuels enter the global fleet.

Achieving these reductions will require maximising energy efficiency and transitioning away from the use of fossil fuels for both the existing fleet and new ships built during this period.

Overall, aligning international shipping’s level of ambition with 1.5°C requires significant absolute greenhouse gas (GHG) emissions reduction by 2030 and 2040: 37% and 96% reductions respectively relative to 2008.

“Industry is increasingly under pressure to align with 1.5ºC and has broadly embraced that this can only be achieved by a fuel transition. However, this may distract from the fact that significant gains in energy efficiency through technologies, including wind assist, and operational measures are needed this decade so start reducing GHG now. There are well known options, that will not see significant uptake without much stronger regulatory and voluntary focus and attention,” Jean-Marc Bonello, Principal Consultant at UMAS said.

The study shows the use of LNG is irrelevant to the GHG reductions achieved in 2030 and that the greatest attention in the 2020’s is needed for the hydrogen-derived fuels’ supply chain development. This is not because these have a significant impact on GHG emissions in 2030, but because without action in the 2020’s, the scale-up will not enable the deeper GHG reductions required by 2040. In parallel, action and policy is also needed to ensure the efficiency opportunities are exploited across the global fleet.

The 2040 target is dependent on the scale-up of new energy supply chains in the next decades thus, developing these supply chains and fostering use of new fuels on ships this decade is important. However, given the short timescale between now and 2030 means, new energy supply chains are unlikely to play a significant role in achieving 1.5°C-aligned 2030 ambitions; therefore, the role of energy efficiency is key in the near-term, the report said.

UMAS said last year that the shipping industry was ‘partially on track’ with regard to the progress in technology and supply of scalable zero-emission fuels (SZEF) to achieve the target of a 5 percent share of international shipping fuels by 2030, with at least 203 shipping decarbonization pilot and demonstration projects in the pipeline.

“International shipping is currently on track for a complacent 2020’s, followed by a highly disruptive 2030’s caused by a turbulent, expensive and late fuel transition. The greater the efficiency gains in the 2020’s, the lower the investment needs and costs associated with fuel transition, and the longer the time available for fuel transition. At present the 2030 ambition/target and by association the efficiency opportunity, are not getting the attention they deserve, at the expense of the industry and those it serves,” Tristan Smith from UMAS said.

UMAS believes that the International Maritime Organization (IMO) is a crucial player in this effort, first by adopting an increased 2030 ambition in July this year, and then through a revision of short-term measures (CII and EEXI) to ensure regulation incentivizes the increased ambition.

Additionally, a lack of 1.5ºC-aligned policy resulting from the adoption of an increased 2030 ambition in 2023 could hinder the revision process of the short-term measures, including the Carbon Intensity Indicator (CII) and the Energy Efficiency Existing Ship Index (EEXI), scheduled for 2026.

The industry may also resist sudden and significant changes to efficiency objectives for 2030 if not clearly signposted in 2023, UMAS said.

The study also recommends complementary measures to the IMO process, such as incentives by countries and regions to ships with the highest CII ratings to use their ports.

“Concurrently, industry-led voluntary initiatives can work to set clear frameworks for transparent target-setting and reporting between different stakeholders and to the market. These initiatives can remove the well-known perverse incentive structures that currently inhibit greater technological and operational energy efficiency (sail fast then wait, demurrage etc.),” the report said.