A new report from Wood Mackenzie has highlighted that the International Maritime Organization’s (IMO) 2030 carbon intensity target can be achieved with the adoption of the Energy Efficiency Design Index (EEDI) and Energy Efficiency Design Index for existing ships (EEXI) amendments.
The amendments are due to be enforced from 2023 onwards and will mandate greater efficiency improvements for some types of vessels particularly very large new-build containerships. Under the EEXI, existing ships above 400 gross tonnage will also need to comply with tighter fuel-efficiency regulations.
Wood Mackenzie principal analyst, Iain Mowat, said the adoption of the EEDI and EEXI amendments would result in IMO achieving its target of reducing carbon intensity by at least 40 per cent by 2030.
“This would cause a further decline in international marine bunker oil demand of around 370,000 barrels per day (b/d) by 2030 compared to our current outlook,” he said.
If the reduction in fuel consumption were to be fully met by Engine Power Limitation, Wood Mackenzie outlines that an overall fleet speed reduction of over 6 per cent would be required. For a typical product tanker travelling from Rotterdam to New York Harbour, this could add an extra day to the overall journey. Presently, idle capacity in the tanker market ranges between 4 per cent and 6 per cent, which could tighten further with additional slow steaming, impacting freight rates.
Wood Mackenzie’s base case assumes that improvements in fuel efficiency continue at an annualised rate of around 2.8 per cent between 2030 and 2050 for new-build vessels, so that the EEDI index falls from 0.7 in Phase three to 0.4 by 2050.
Low-carbon alternatives such as biofuels could play an important role in decarbonising shipping, yet note that supply availability is a key constraint. Priority goes to the road sector due to established government mandates, and secondarily to the aviation sector.
“Synthetic e-fuels could become more widespread by the end of the 2040s, supported by the increasing availability of green hydrogen capacity. This could be the long-term solution towards decarbonising the shipping industry,” Mr Mowat concluded.