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Decarbonizing shipping relies on improving energy efficiency and upgrading vessel equipment. (Photo: Maersk)
The shipping industry, especially long-haul shipping, is classified as one of the hardest sectors to decarbonize, underscoring the importance of the International Maritime Organization's (IMO) carbon fee.
Under regulatory pressure, Maersk and MSC have pursued carbon reduction by switching fuels, acquiring new vessels, and improving energy efficiency. However, while Maersk focuses heavily on biofuels, MSC favors liquefied natural gas (LNG) and continues to explore carbon capture and storage (CCS) technologies, adopting a more diversified approach to emission cuts.
Maersk sets energy efficiency records but emissions rise in 2024
Maersk's annual report highlights that improving energy efficiency across routes and assets is the most effective and primary step toward net-zero, directly reducing energy consumption and carbon emissions.
In route planning, Maersk increases vessel deployment flexibility to minimize delays and associated emissions. For example, the "Gemini Cooperation" with German shipping company Hapag-Lloyd, launching in 2025, aims to maintain an on-time arrival rate above 90%.
Energy efficiency related to assets involves ship design, composition, and technology use. In 2024, Maersk invested $1.2 billion to purchase new dual-fuel vessels and retrofit its existing fleet, also integrating seven previously acquired dual-fuel green methanol-powered ships.
Maersk's second pillar for decarbonization is adopting environmentally friendly fuels, such as biodiesel, green methanol, and liquefied bio-methane for shipping operations. Its logistics and terminal services focus on electrifying trucks, warehouse equipment, and container handling machinery.
The Energy Efficiency Operational Indicator (EEOI) dropped to a historic low of 11.1 in 2024, a 0.6 decrease from the previous year. EEOI measures emissions per unit cargo distance; a lower value indicates higher efficiency.
However, Maersk’s carbon emissions increased to 83.5 million tons of CO2 equivalent in 2024, up by 5.8 million tons, primarily due to geopolitical tensions in the Red Sea, which forced ships to reroute around Africa’s Cape of Good Hope, significantly increasing emissions.
Read more: Shipping industry struggles with decarbonization amid green fuel supply, policy challenges
MSC prioritizes LNG, carbon capture technology exploration
Unlike Maersk’s multi-fuel approach, MSC focuses on LNG, naming bio-LNG and synthetic LNG as future main fuels for shipping over the next 10 to 15 years. Its dual-fuel vessel procurement and retrofits favor LNG propulsion.
MSC’s sustainability report outlines plans to retrofit vessels with advanced technology by 2026, allowing operations on conventional fuels, LNG, and ammonia. This retrofit aims to reduce carbon emissions by 25% compared to traditional fuel ships. The first phase of conversion to operate on LNG is expected to reduce nitrogen oxide (NOx) emissions by approximately 70% with minimal methane leakage.
Beyond low-carbon fuels, MSC completed a feasibility study for onboard carbon capture and storage (CCS) in 2024. The company sees significant potential for large vessels with sufficient space to install CCS equipment.
MSC estimates that onboard CCS could capture 25% of CO2 emissions on LNG vessels, potentially reducing emissions by 45% compared to traditional ships. Captured CO2 can be repurposed as feedstock for synthetic fuels like e-methane or e-methanol.
Despite this promise, MSC acknowledges challenges, including limited onboard storage capacity, safe handling and transport of captured CO2, immature supply chains, and the need for standardized CCS certification and regulations.
Overall, MSC also focuses on improving energy efficiency and renewing its fleet. Its 2024 EEOI dropped 8% to 12.38, slightly behind Maersk’s performance.
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MSC estimates that onboard CCS could capture 25% of CO2 emissions on LNG vessels, potentially reducing emissions by 45% compared to traditional ships. (Photo: MSC)
DNV urges early action with combined decarbonization measures
Consultancy DNV analyzed shipping decarbonization using a 67,500-deadweight container ship as an example. Without any measures and under the EU carbon quota policy, the ship would face €12 million (about USD 13.9 million) in carbon costs. Using biofuels could save €1.6 million (about USD 1.85 million), while combining technical measures with biofuels might save €4.9 million (about USD 5.69 million).
Read more: IMO reaches initial deal on first global shipping carbon pricing
DNV urges fleets to implement all necessary decarbonization actions promptly and gradually increase low-carbon fuel use. Delaying energy efficiency improvements reduces cost-effectiveness by postponing fuel savings, especially given the current supply-demand gap in emerging fuels, which could drive up future costs and hinder decarbonization goals.
The report highlights energy efficiency as essential but underutilized, mainly due to shipowners’ skepticism about the commercial benefits. It calls for more data and verification processes to support key decisions and encourage investment in decarbonization.
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