Keys to Energy-Efficient Shipping

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The international shipping sector is at a critical juncture in its journey toward decarbonization. As the world moves closer to its net-zero greenhouse gas (GHG) emissions target for 2050, a rapid shift to green fuels (zero or near-zero GHG fuels) is required. This report provides a comprehensive examination of the role that technical and operational energy efficiency measures can play in supporting this transition. Specifically, it investigates both the overall and individual contributions of energy efficiency solutions, their cost-effectiveness, and their potential to ease the adoption of green fuels.

By analyzing the practical implications for the global fleet and various ship types, the report aims to illuminate how energy efficiency can support GHG emissions reduction objectives and reduce shipping’s fuel costs. It outlines which solutions are needed for the adoption of energy efficiency measures at scale in a rapidly changing regulatory and technological landscape. As shipping adapts to evolving global expectations, energy efficiency has emerged as a key for reducing GHG emissions while simultaneously strengthening the sector’s economic resilience. Energy efficiency can significantlystrengthen the sector’s economic resilience by containing fuel price volatility.

This report quantifies the substantial, yet largely untapped, potential of energy efficiency measures to reduce energy consumption while delivering significant cost savings.

Energy efficiency improvements in shipping can deliver remarkable short- and longer-term benefits. The report finds that such measures could reduce ship emissions by up to about 40% by 2030.

Among these measures, speed reduction emerges as the most promising opportunity for immediate impact, which is particularly beneficial in congested port areas. Beyond 2030, technical innovations (e.g. in wind-assisted propulsion systems) are expected to play an increasingly important role in further reducing GHG emissions.

One of the most compelling aspects of energy efficiency measures is their cost-effectiveness. About half of the potential GHG emissions savings from these measures are projected to be economically viable by 2030, meaning they can pay for themselves through reduced fuel consumption. This is particularly relevant for the highest emitting sectors - bulk carriers, container ships, and tankers – where the majority of energy efficiency measures are cost-effective. By investing in energy efficiency, the sector can significantly lower the overall cost of its energy transition. Up to $220 billion could be saved annually in the transition to more expensive green fuels, reducing green fuel costs and mitigating market volatility.

Despite their promise, many energy efficiency measures remain underused. Measures such as wind-assisted ship propulsion and port call optimization have not been widely adopted, largely due to a range of economic, behavioral, and organizational barriers.

To unlock the full potential of energy efficiency in shipping, the report offers several recommendations to the following stakeholders:

• Policymakers: Advance performance standards and consider alternative instruments like emission levies and subsidies.
• Industry: Develop voluntary information standards to address market failures and harmonize data exchange.
• Ports and Port community: Explore national or local policies, share best practices and adopt digital solutions.
• Finance Sector: Innovate financing products for retrofits and integrate financing.