The document discusses measures available to reduce CO2 emissions from shipping by 2030. It presents an overview of technical measures like improved hull design and use of alternative fuels like natural gas. Natural gas produces less CO2 than oil but infrastructure challenges remain. Wind propulsion through kites is being tested on ships but efficiency depends on wind. Fuel cells have very low emissions but high costs are a barrier. The document evaluates these measures' emission reduction potential and cost-effectiveness to identify priorities and the need for further innovation to achieve significant reductions beyond stabilizing emissions.

1. Assessment of measures to reduce
future CO2 emissions from shipping
Research and Innovation, Position Paper 05 - 2010

2. This is
DNV
DNV is a global provider of services
Research and
Innovation in
DNV
for managing risk. Established
in 1864, DNV is an independent
foundation with the purpose of
safeguarding life, property and the
environment. DNV comprises 300
offices in 100 countries with 9,000
employees. Our vision is making The objective of strategic research
a global impact for a safe and is to enable long term innovation
sustainable future. and business growth through new
knowledge and services in support
of the overall strategy of DNV. Such
research is carried out in selected
areas that are believed to be
particularly significant for DNV in
the future. A Position Paper from
DNV Research and Innovation
is intended to highlight findings
from our research programmes.
Contact details:
Magnus Strandmyr Eide – magnus.strandmyr.eide@dnv.com
Øyvind Endresen – oyvind.endresen@dnv.com

3. Summary
Limiting CO2 emissions is a great challenge being faced by society today.
Society, through the United Nations Framework Convention on Climate
Change (UNFCCC), and actors like the EU, is applying pressure on all
industries, including the shipping industry, to reduce CO2 emissions.
Thus, rules and regulations that safeguard the interests of society, i.e. that
limit climate change, are likely to emerge in the years ahead, resulting in
the need for implementation of effective measures. Given the range of
measures available for reducing CO2 emissions from ships, there is a need
for a consistent and rational system for decision making and selection
of measures. This applies both to individual ship owners, and also to
policymakers and regulators.
In this paper, a comprehensive overview of the available measures is
presented, and the measures are assessed from a cost-effectiveness
perspective. A new integrated modelling approach has been used,
combining fleet projections with simulated implementation of CO2
emission reduction measures towards 2030. The resulting emission
trajectories show that stabilising fleet emissions at current levels is
attainable at moderate costs, in spite of the projected fleet growth up
to 2030. However, significant reductions beyond current levels seem
difficult to achieve. If an absolute reduction in shipping emissions is
the target, a significant boost in research, development and testing is
needed to overcome barriers, to accelerate the process of bringing novel
technologies to the market, and to find those solutions that are yet to be
imagined. This study discusses three wild card technologies, all of which
have the potential to play some part in the future pathway to low carbon
shipping.
It is important to recognise that the reduction potential, as outlined
above, cannot be realised without a robust and effective policy instrument
that ensures that steps are taken to implement the necessary measures on
a large scale in the years ahead.

4. Introduction
Global temperature increases exceeding 2°C above
pre-industrial levels are likely to result in severe global
consequences. To avoid such a development, the target
of limiting temperature increases to 2°C was included
in the Copenhagen Accord emerging from the COP15
meeting in December 2009, organised by the United
Nations Framework Convention on Climate Change
(UNFCCC). In order to reach this target, it has been
estimated that global greenhouse gas (GHG) emissions in
2050 need to be 50-85 % below current levels according to
the Intergovernmental Panel on Climate Change (IPCC,
2007). However, all IPCC scenarios indicate significant
increases in GHG emissions up to 2050. This means that
achieving the necessary reductions will be very challenging.
Shipping is responsible for approximately 3 % of global Figure 1: Projected CO2 emissions from the future fleet from various
studies; Purple – Buhaug et al. 2009 (high-low). Blue – Endresen et
CO2 emissions (Buhaug et al., 2009; Endresen et al., 2008;
al. 2008 (high – low). Green – Eyring et al. 2005b (high – low). Black
Dalsøren et al., 2009), and future scenarios indicates that – This study (Baseline – see section 5 and 6). Note that the respective
CO2 emissions from ships will more than double by 2050 studies have published point values, and the lines have been fitted for
(Buhaug et al., 2009; Endresen et al., 2008, Eyring et al., the purpose of this article. Also, differences in modelling approach
between studies and between the assumptions made, means that direct
2005b) (Figure 1). Given the expected growth, achieving comparison of the presented studies is difficult and not advisable.
emission reductions will be difficult. The global target of
2°C will affect maritime transportation, and the extent to
which the maritime sector should be expected to reduce emissions from shipping will be regulated. This, along
emissions and how this reduction might be achieved are with an expectation of high fuel prices in the long run, will
the subjects of an ongoing debate. The International provide incentives for the shipping industry to focus on
Maritime Organization (IMO) is currently working to new ways to achieve greater cost- and energy-effectiveness,
establish GHG regulations for international shipping and better environmental performance (Figure 2).
(IMO, 2009), and is under pressure, from bodies such as
the EU and UNFCCC, to implement regulations that will Over the years, DNV has been actively involved in
have a substantial impact on emissions. The major policy developing the scientific foundation for understanding
instruments under consideration by IMO are technical, emissions from shipping. In collaboration with leading
operational, and market-based. experts on atmospheric transport and chemistry (University
of Oslo and CICERO), DNV has investigated past, present,
Although the outcome of the IMO process is currently and future emissions and their impacts. DNV has recently
unresolved, it seems clear that within a few years CO2 contributed to international assessments on shipping
4

5. for costs-effectiveness are identified, and the reasons why
such technologies are still needed are described. The
results presented build primarily on Eide et al. (2010a),
but also on the Pathways studies (DNV, 2009a; 2009b), and
Eide et al. (2009b).
This position paper is divided into ten sections. Section
1 is comprised of this introduction. Section 2 presents
a mapping of available measures for CO2 reduction in
shipping towards 2030, while Sections 3 and 4 detail a
selection of measures. In Section 5, an approach to rating
and prioritising CO2 reduction measures from a cost-
effectiveness perspective is provided. Section 6 presents
trajectories for future CO2 emissions from ships and
evaluates the achievable emission reduction potential
Figure 2: Illustration of some factors that will drive technology at different cost levels. Section 7 discusses limitations to
development in shipping.
the presented results, and presents a set of “wild card”
technologies for further reducing emissions. Section 8
emissions including the IMO GHG study (Buhaug et al., provides an overview of policy instruments for enforcing
2009), the European Assessment of Transport Impacts reduction in CO2 emissions, through the application of
on Climate Change and Ozone Depletion (ATTICA) the measures discussed. Section 9 discusses the challenges
(Eyring et al., 2010), and an OECD study on international of considering CO2 in isolation, and reminds the reader
transport (Endresen et al., 2008). DNV has also contributed of the climate effect of other emissions. Finally Section 10
significantly to the scientific literature on the topic with concludes, and presents recommendations.
several peer-reviewed publications (Endresen et al., 2003;
2004; 2005; 2007; Dalsøren et al., 2007; 2009; 2010; Eide et
al., 2009a; 2009b; 2010a; Longva et al., 2010). Two studies
considering Pathways to low carbon shipping have also
been published recently (DNV, 2009a; 2009b).
In this paper, an overview of the available measures for
CO2 reduction is presented, and these measures are
assessed from a cost-effectiveness perspective. Using a
model developed by DNV, CO2 trajectories for different
reduction cost levels are derived. Furthermore, new
technologies, wild cards, that have not yet been assessed
5

6. Abatement technologies
a number of measures to reduce CO2 emissions • Structural measures impose changes that are
are available to the shipping industry (see Figure 3). The characterised by two or more counterparts in shipping
emission reduction measures can be divided into four working together to increase efficiency and reduce
main categories: emissions by altering the way in which they interact.
Structural changes are believed to have a significant
• Technical measures generally aim at either reducing potential to reduce emissions beyond that which is
the power requirement to the engines or improving achievable with the above measures, but are generally
fuel efficiency. These measures are linked to the design hard to develop and implement. For instance, Alvarez
and building of ships (e.g. hull design), to optimisation et al. (2010) suggest CO2 reduction potentials in the
of the propulsion system, to the control and efficient order of 6-10 % from adopting tailored port berthing
operation of the main and auxiliary engines, and to policies, instead of using a ‘first-come, first-served’
retrofits on existing ships. These measures generally approach.
have a substantial investment cost and potentially very
significant emission reduction effects. Many technical Although not the main topic of this paper, it is noted
measures are limited to application on new ships, due that measures intended for reduction of NOx and SOx
to the difficulties or high costs of retrofitting existing emissions may interact with the CO2 reduction measures
ships. and sometimes limit their applicability or potential. For
• Alternative fuels and power sources form another instance, NOx reduction measures typically have a negative
set of technical measures. The alternatives range effect on fuel consumption. Upcoming regulation of
from supplementary measures (e.g. wind & solar) to NOx and SOx emissions from shipping will result in the
a complete switch of fuel (e.g. to gas, bio-diesel, or introduction of measures to decrease these emissions.
nuclear), and generally require significant investments
upfront, both onboard and in new infrastructure. In the following section, some of the available solutions for
• Operational measures relate to the way in which CO2 reduction are discussed in greater detail.
the ship is maintained and operated, and include
measures such as optimised trim and ballasting, hull
and propeller cleaning, better engine maintenance,
and optimised weather routing and scheduling.
Operational measures do not require significant
investment in hardware and equipment. The measures
generally have low investment needs and moderate
operating costs. Implementation of many of these
measures requires execution of programmes involving
changes in management and training. Many of these
measures are attractive for purely economic reasons.
6

7. Figure 3: Overview of CO2 abatement measures available in shipping.
7

8. Technical measures
& alternative fuels
the ‘technical measures’ and ‘alternative fuels’ traditional bunker tanks, which fit easily into a steel ship
categories include measures that typically require structure. LNG storage requires additional space since
significant upfront investments, but usually have a natural gas, both pressurised and liquefied, takes up
significant potential for emission reductions. In the roughly twice the space occupied by diesel oil and various
following paragraphs, natural gas, wind propulsion and safety constraints also have to be fulfilled.
marine fuel cells are presented as examples of such
measures. Bunkering locations and infrastructure are further
concerns. With few ships currently running on natural gas,
natural Gas as main fuel source the incentives for developing the necessary infrastructure
Natural gas consists mainly of methane (CH4), and is are limited. However, experiences from Norway show that
naturally abundant, with rich reserves worldwide. Natural as ships fuelled by natural gas are built, the bunkering
gas as fuel produces more energy per unit of carbon infrastructure is also developed, demonstrating that when
released than traditional bunker oil. Therefore, a switch the need arises then the suppliers will meet it. The price
to natural gas potentially yields a reduction in the CO2 difference between natural gas and diesel oil is expected
emissions of more than 20% from a combustion engine. to increase in the years to come (favouring gas). This,
However, emission of non-combusted methane (a potent together with new, stricter requirements for emissions to
GHG) is a problem when operating outside the optimised air, will result in natural gas becoming a more appealing
load-spectra. This means that the effective reduction option for use by ships. The introduction is expected to
in CO2 equivalent units is lower then 20%, and engine start in short sea shipping , and in emission control areas
builders are working to improve this. A switch to natural (ECA)defined by IMO.
gas also eliminates SOx and particulate matter emissions,
as well as significantly reducing NOx emissions. In recent An emerging option is retrofitting vessels to run on LNG.
years, natural gas in the form of Liquefied Natural Gas By modifying the engine, auxiliary machinery, piping
(LNG) has been used in some smaller vessels, mainly in networks, and tank configuration, existing vessels can be
Norwegian waters. At present, approximately 20 LNG- adapted to use LNG.
powered ships are in operation in Norwegian waters, the
majority of which are supply ships and coastal ferries. Wind assisted propulsion
Wind assisted propulsion involves using rigid or soft sails,
One major drawback to installing an engine system that kites, or Flettner rotors to convert energy from the wind
runs on natural gas is the price; at present it costs 10 – 20 to thrust forces. Of these options, kites are currently the
% more than a similar diesel system. One of the main cost most advanced wind propulsion concept. Wind energy
drivers is the storage tank for natural gas, as pressurised or has experienced a recent revival due to increased fuel
insulated tanks are generally more expensive than diesel prices and environmental concerns. A number of different
oil tanks. arrangements have been tested over the years, and presently
four commercial ships have kites installed for testing.
The standard LNG storage tanks currently used are
spherical and insulated. These occupy more space than Some forms of wind assisted propulsion, e.g. kites, can
8

9. be installed on standard ship designs and this might in order to avoid overheating. Further obstacles are the
lower the threshold for widespread use of wind assisted relatively high installation and maintenance costs, and
propulsion. However, in order to optimise the effect, the requirement for crew expertise. Additionally, the
it will be necessary to adapt current designs, both initial investment cost is 2-3 times higher than for that of
technically and operationally. As the effectiveness of wind a comparable diesel engine. As a result of these barriers
assisted propulsion is directly linked to the prevailing and current size of installations, the first marine-related
wind conditions (strength and direction), there is some market for fuel cells is expected to be within auxiliary
uncertainty regarding the efficiency of the equipment. power. In the longer term, fuel cells might become a part
Additionally, wind assisted propulsion equipment is often of a hybrid powering solution for ships.
relatively complicated to operate and adjust for changing
wind conditions, and therefore many ship owners may be DNV has coordinated the FellowSHIP project, run in
reluctant to install wind assisted propulsion. partnership with Eidesvik and Wärtsilä and supported by
the Norwegian Research Council and Innovation Norway.
Other concerns include the influence on cargo capacity, This project is the first to test large-scale marine fuel cells
and problems with accessibility to ports due to the onboard a merchant vessel (see Figure 4).
installation of wind assisted propulsion equipment, such
as Flettner rotors and sails on masts. These installations
can potentially come into conflict with bridges and cargo
handling equipment. However, new material technologies
will enable installation of designs and ideas that used to
be regarded as fiction. This might lead to wind assisted
propulsion being introduced into new shipping segments.
marine fuel cells
A fuel cell converts the chemical energy of the fuel
directly to electricity, through electrochemical reactions.
The process requires supply of a suitable fuel such as
LNG, tomorrow’s renewable biofuels, or hydrogen, and a
suitable oxidiser such as air (oxygen). CO2 emissions from
fuel cells are significantly lower than those from diesel
fuels, and there are no particulate or SOx emissions, and
negligble NOx emissions.
However, significant barriers associated with the
commercial use of fuel cells onboard ships remain to be
overcome. At present, fuel cells must be operated in fairly Figure 4: Fuel cell equipment being installed on Eidesvik’s Viking Lady.
constant loads, accepting only very slow load changes,
9

10. Operational measures
operational measures often amount to relatively The high potential for fuel saving will make speed
small changes in the operation and maintenance of the reduction an interesting option for many ship owners.
vessel. The implementation of many of these measures Market differentiation, into high and low speed service for
requires execution of programmes involving changes in some segments (e.g. container), will probably emerge. It
management and training, but also computerized decision can be envisioned that cargo owners with high value cargo
support tools and reliance on external information would be willing to pay a premium for shorter transit times.
sources.
speed reduction
Speed reduction has been increasingly common in the
shipping market in recent years. Speed reduction or slow
steaming has yielded significant reductions in operational
expenses, especially in the container segment. The main
principle that makes speed reduction interesting, is that
hull resistance increases exponentially with speed. Thus,
even a modest speed reduction can substantially decrease
required propulsion thrust. Less required thrust means
lower fuel consumption and reduced emissions to air.
However, speed reductions may come at a cost, when
the volume of cargo to be transported within a given
time frame (say 1 year) remains unchanged. One way of
implementing speed reduction is to decrease the speed on
all ships, which, in turn, will increase the number of ships
required to freight the same volume of cargo. Another way
is to improve efficiency in port, and utilise the time saved
to decrease the speed of the ships. In the present market
conditions, the first option is obtainable, given the decline
in world economy and the resulting availability of excess
tonnage.
Either way, a speed reduction will increase the transit time
between ports, and thus is likely to increase the total cargo
delivery time. Therefore, speed reduction is dependent
on customer acceptance and on the additional cost to the
cargo owner. The profit for the ship owner must balance Figure 8: Operational measures greatly impact on emissions.
the cost for the cargo owner.
10

11. Most ships are optimised for a certain speed, and steaming must be trained in the use of such equipment. The very
at lower speeds might have unforeseen consequences low cost of this measure makes it an appealing option,
in terms of engine maintenance and fuel consumption. despite the relatively low efficiency gains.
Future ships will probably be designed for an optimal
speed range, allowing for a wider variation in speed than Weather routinG
today. This will lead to both more flexible engine system Weather conditions (wind and waves), together with
solutions and better optimised hulls. ocean currents, influence the propulsion power demand
of a ship at a given speed. Therefore, it is important that
The cost of this measure is difficult to quantify, as it depends these factors are considered when planning a voyage, and
on volatile factors, such as market conditions and fuel attempts should be made to minimise the negative effects.
prices. However, in many cases this measure has proven to
be attractive purely from an economic perspective.
adjustinG trim and draft
The trim and/or draft of a ship influence hull resistance
and therefore the fuel consumption. In general, trim and
draft are not routinely optimised when loading a ship and
therefore the design conditions will frequently not be
achieved. By actively planning cargo loading to optimise
trim and draft, fuel savings can be made and emissions
reduced accordingly. Optimising trim and draft has been
estimated to be able to reduce fuel consumption by 0.5–2
% for most ship types. However, for ships that often trade Figure 9: Avoiding adverse weather can save fuel and emissions.
in partial load conditions (e.g. container, Ro-Ro, and
passenger), the effect can be up to 5 %. These numbers The longer a ship voyage, the greater the route choice
are based on full-scale tests and on detailed calculations flexibility for avoiding adverse weather conditions. In
performed on a number of different ships in different addition, longer voyages usually include time spent in
trades. unsheltered waters, where the influences from the weather
are more important. Therefore, the greatest potential
Full-body ships, in which the resistance from viscous from weather routing could be realised in intercontinental
friction is higher than wave resistance (e.g. tank and bulk), trades.
will achieve a smaller fuel consumption reduction by
optimising trim and draft, and this will be similar for ships All ships have the potential for installing weather routing
with limited ballast flexibility (e.g. cruise). In order to be systems, which will include subscriptions to observed and
able to optimise trim and draft, additional equipment is forecasted data on weather, waves, and currents. Some
required (such as a better loading computer) and the crew ship segments (e.g. large container and Ro-Ro) have
11

12. already implemented weather routing to some extent,
and, therefore, the potential for emission reduction for The high potential for
these ships is lower. This is also assumed to be the case for
new ships coming into service. Weather routing potential fuel saving will make
has been assessed to between 0–5 %, depending on ship
size and type, and the typical trade of the different ship speed reduction an
segments.
interesting option for
In addition, weather routing might provide benefits by
decreasing fatigue and weather damages, but these have many ship owners.
not been included in this study. The cost of implementing
this measure is relatively low. However, depending on the
nature of the trade, and parameters such as ship size, the
investment may not always repay itself.
12

13. Cost effectiveness –How to
navigate between measures?
the Wide ranGe of solutions available for CO2 A baseline CO2 emission level for the fleet is determined
reduction means that comparing solutions and prioritising by an activity-based approach using 59 separate ship
among them provides a challenge, and requires a segments to represent the fleet. Then, for a given year, the
consistent and flexible methodology. One such approach cost, benefits, and potential emission reduction effect are
is marginal abatement cost comparison. calculated for all available emission reduction measures for
the entire fleet, thus giving the marginal abatement cost.
The marginal abatement cost of a specific measure (e.g. This is achieved by applying a comprehensive database
weather routing) is the monetary cost of avoiding 1 tonne of emission reducing measures (including the measures
of CO2 emissions through application of that measure, described in the previous section).
considering any other measures previously applied. It is
the cost of reducing the next unit of emission, and can By gathering data on the measures described above, and
be defined by the CATCH parameter (Cost of Averting many more, and by applying them in the fleet model
a Tonne of CO2-eq Heating) [USD/tonne] as suggested combining the fleet development and the technology
by Skjong (2009) and described by Eide et al. (2009b). development towards 2030 (Figure 7), an overview of the
The costs of each measure (including installation and reduction potential in the fleet can be obtained, along
operation) and the expected economic benefits (including with the associated cost levels.
fuel saving) are aggregated over the expected operational
lifetime of a vessel or measure (whichever is shortest), and
discounted to a present value. The net cost is then divided
by the expected volume of emission reduction; CATCH =
(cost-benefit)/emission reduction.
Measures that achieve CATCH levels below a given
threshold are termed cost-effective. This means that they
deliver a sufficiently large emission reduction relative to
their cost.
A model has been developed that can be used to assess
the marginal cost of all available measures applied to the
world fleet. This model has been applied in the previous
‘Pathways publications’ from DNV (2009a; 2009b) and is
described by Eide et al. (2010a). The overall modelling
approach is to develop the world fleet iteratively, by
adding and removing ships from the fleet. Moderate
Figure 7: Expected developments in the price and reduction effects for
growth rates have been assumed, based on the current CO2 abatement measures are combined with expected fleet development.
order book and long-term trends for each ship type.
13

14. In Figure 8, the marginal cost shown is the average cost The methodology, applied here for policy considerations
for all ship segments. The curve summarizes the technical on a fleet level, is also applicable as a tool for ship owners
and operational opportunities to reduce emissions from when applied to smaller fleets or individual vessels. It
the shipping fleet sailing in 2030. The width of each bar must be stressed that, on a fleet level, these values hide
represents the potential of that measure to reduce CO2 significant differences in the performance of the various
emissions from shipping, relative to the baseline scenario measures from one ship segment to another. Measures
for 2030. The height of each bar represents the average that do not have low marginal costs on average may still
marginal cost of avoiding 1 tonne of CO2 emission through perform very well for certain ship segments (e.g. waste
that measure, assuming that all measures to the left are heat recovery). Caution should thus be applied when using
already applied. The graph is arranged from left to right these results to make statements about the effectiveness
with increasing cost per tonne CO2 averted. Where the of specific measures, or for prioritising among them.
bars cross the x-axis, the measures start to give a net cost However, when tailored to a single ship, or to a limited
increase, instead of a net cost reduction. fleet, such figures are extremely useful to ship owners who
wish to prioritise among the potential measures for their
own ships. Specialised tools have been developed by DNV
for this specific purpose.
Figure 8: Average marginal
abatement cost per reduction
measure for the fleet in 2030.
The marginal abatement cost of a
specific measure is the monetary
cost of avoiding 1 tonne of CO2
emissions through the application
of that measure, considering any
other measures previously applied
(DNV, 2009b; Eide et al., 2010a).
14

15. CO2 abatement cost:
How low can you go?
By producing marginal cost curves (such as in the previous (e.g. USD 50/tonne as suggested by Eide et al. (2009b)).
section) for a sequence of years, emission trajectories can In principle, the thresholds could be equivalent, provided
be derived that show by how much the fleet CO2 emissions that external costs are internalised (i.e. damage costs from
can be reduced into the future, and the associated cost global warming caused by CO2 emissions are charged to
levels. Thus, a series of ‘snapshots’ for successive years, as the polluter). Figure 9 indicates that stabilising emissions
shown in Figure 8, can be used to produce scenarios for at current levels is possible at moderate costs, thereby
future development. This links the marginal abatement compensating for the predicted fleet growth. However,
cost curves to the emissions trajectories shown in Figure 9. significant reductions beyond current levels seem difficult
to achieve.
Figure 9 shows the resulting cost scenarios for CO2
emissions. The baseline is shown as the highest stippled By considering alternative input data to the model,
line, and the resulting emission levels at increasing a sensitivity analysis shows that fuel price is the main
marginal cost thresholds are plotted below. Note that driving parameter on the cost per tonne CO2. The above
the baseline is the same as that shown in Figure 1, and conclusions are based on a low fuel price estimate. As
represents the growing emission levels for the fleet, under the sensitivity analysis shows that higher fuel prices will
the assumption of moderate fleet growth and without significantly increase the cost-effective reduction potential,
implementation of any of the reduction measures. The the conclusions appear to be robust. The same analysis
bottom line illustrates the resulting emission level, provided shows that the results are more sensitive to changes in the
that all the measures analysed in this study are applied to emission reduction effect of these measures, than to the
the fleet, irrespective of cost. These results show that 19 % costs of the measures. Changes to the costs alone result in
of the baseline emissions in 2010 can be reduced in a cost- only small impacts.
effective manner. For 2020 and 2030 the corresponding
numbers are 24 % and 33 %, respectively. By increasing
the marginal costs level to USD 100/tonne results in a
reduction potential of 27 % in 2010, 35 % in 2020, and 49
% in 2030. Additionally, it is evident that further increases
in the cost level yields very little in terms of increased
emission reduction. Note that the term ‘cost-effective’
potential is used here to mean emission reduction potential
with marginal costs below zero (0). The term is relative
and is used in relation to a predefined threshold, which
then will vary depending on the viewpoint of the decision
maker. For a ship owner, the threshold will naturally be
zero. For a regulator, acting on behalf of society at large,
the threshold should reflect the adverse effects of these
emissions, and therefore the threshold should be higher
15

16. Figure 9: CO2 emission scenarios for the world fleet resulting from applying all emission reduction options below a given marginal cost level (CATCH) ,
USD/tonne. From Eide et al. (2010a).
16

17. Wild cards
the precedinG analyses show that, in absolute terms, directly to a propeller or can generate electricity in an
it will be difficult for shipping to reduce emissions below electric propulsion concept. Nuclear power is an enticing
current levels. Hence, it will be difficult to contribute to technology as, during operation, nuclear powered ships
absolute reductions and to the temperature stabilisation will have no emissions to air. The first nuclear powered
target of 2°C above pre-industrial levels. However, merchant ship was launched in the 1960s, and there are
although the current study contains more measures currently about 150 nuclear powered ships in operation,
than any previous study, it should be noted that not all most of which are military vessels.
conceivable abatement measures have been included in
the analyses. Those measures that were included in the There are currently several new designs for nuclear
current study were limited to those that were judged to be powered merchant ships in progress. The land-based
mature (or very close to mature) at the present time, and revival of nuclear power has led to the development of
therefore feasible for installation onboard. The measures many “small” reactors. These reactors are more suited in
omitted in the analysis of the 2030 potential include size to merchant ships, and it is therefore predicted that
some presently known technologies, but other solutions, nuclear powered ships will emerge. The lengthy process
currently undiscovered, could also emerge, that may well of obtaining appropriate permissions and conducting tests
have a significant impact in 20 years. means that next generation nuclear powered ships can
only become a reality by 2020-2030, at the earliest.
If the aim is to achieve an absolute reduction in
shipping emissions, then a significant boost in research, The main barrier for nuclear powered ships is related to
development and testing is needed to overcome barriers the risks from radioactive waste and the proliferation of
and to accelerate the process of bringing novel, promising nuclear material. Public concerns also have the potential
technologies to the market, and to find other solutions, yet to limit the number of ports at which these ships can call.
to be imagined. It is also noted that stronger fleet growth Another issue is the decommissioning and storage of
than assumed herein will exacerbate the difficulty in radioactive material, as well as the need for specialized
reducing emissions in absolute terms, such that the need infrastructure for serving the ships. This infrastructure
for new options becomes even more pressing (Eide et al., is virtually nonexistent at present and would have to be
2009a). developed. Another significant barrier is the high upfront
investment costs.
In the following paragraphs, three wild card technologies
are presented, all of which have the potential to play some A feasibility study of nuclear powered ships conducted by
part in the future pathway to low carbon shipping. DNV indicated that, at today’s fuel prices, nuclear power
is economically feasible for large container ships and bulk
nuclear poWered ships carriers (DNV, 2010).
Nuclear powered ships use the heat created from a
nuclear reactor to generate steam, which in turn drives
a steam turbine. The turbine can be either coupled
17

18. carbon capture and storaGe on ships small-scale facilities. As CCS technology is not yet mature,
In general, Carbon Capture and Storage (CCS) is the implementation of such systems onboard ships remains a
process of capturing CO2 from large point sources, such as possibility of the future that requires considerable further
fossil fuel power plants, and storing it in such a way that it investigation. However, the technology might be an option
does not enter the atmosphere. Storing CO2 in geological for some of the larger ocean going ships.
formations is currently considered the most promising
approach. DNV currently participates in a research consortium that
is developing and screening alternative CCS processes
Today, there are several ongoing CCS pilot projects in order to derive a front-end design for a CCS solution
worldwide, but a full-scale, end-to-end CCS chain does onboard ships.
not yet exist. There are various key challenges associated
with CCS in general. One is the cost, which is currently
very high, although expected to drop in the future as the
technology matures. Another issue is whether leakage
of stored CO2 will compromise CCS as a climate change
mitigation option. Hence, there is a requirement to fill
knowledge gaps and to investigate the issues involved in
the development of a fully integrated CCS system.
While the main sources of CO2 are expected to be fossil
fuel power plants and large-scale process industry, CCS
is, in principle, also applicable to smaller sources of
emissions, such as commercial ships. In order for CCS to
be a suitable technology for the maritime industry, novel
designs are needed for onboard capture and temporary
storage of CO2 emissions for ships in transit. The ships can
then store the CO2 until discharge into CO2 transmission
and storage infrastructures at the next suitable port, or
to a specialised discharge facility. The CO2 can then be
stored in a common storage reservoir shared with other
CO2 sources.
In addition to the challenges related to CCS in general,
there are challenges that are specific to its use in maritime
Figure 10: CO2 capture
applications. These include the space limitations onboard,
the marine environment, and the fact that this will be
18

19. radical ship desiGns facilities. Thus, having a new design built will almost always
The conventional designs of the major ship types, e.g. bulk be more expensive than a standard design. Radical designs
carriers and oil tankers, have remained largely unaltered will emerge first in the specialised ship segments, before
for many years. Notable exceptions are the ever larger and more traditional ship segments can follow. The X-BOW®
faster container ships and cruise ships, as well as special hull design by Ulstein that emerged in the offshore supply
purpose vessels serving in niche markets. There are well- fleet a few years ago is an example of a radical, fully
proven concepts for all these ship types, and as these have operational design with the potential to be used in other
performed well there has been little interest and incentive segments as well.
for radical changes in design.
With new designs comes the necessity for new construction
However, due to consistently high fuel costs and the methods, as well as for rules and regulations. Today, these
cross-industrial emphasis on environmentally friendly are focused on traditional designs and methods, and
technologies, this is no longer the case. The increased new developments are needed in order to facilitate novel
focus on operational flexibility in design, speed, and radical designs (Papanikolaou, 2009; Denmark, 2009;
cargo, energy efficiency and reduction in emissions, DNV, 2001). The move towards a holistic, multi-objective,
creates a potent driver for creating “radical” designs. and multi-constrained ship design will require greater
New technologies within drag reduction, propulsion, utilisation of computational modelling tools and formal
and materials are entering the market, enabling novel optimisation methods. A collective lift in the shipping
designs to become reality. Innovative designs replacing industry will be necessary in order to facilitate this process,
conventional ballast tank systems are being developed, and the participation of some first-mover ship owners is
and hybrid power systems are emerging. A new mix of critical.
technological, operational, and regulatory triggers results
in an entirely new specification framework, in which In recent years DNV has explored new radical designs in
radical designs can provide satisfactory solutions. several internal projects, such as ‘Containerships of the
Future’ (see picture) and ‘Project Momentum’ both of
Many shipyards have been organised for the production of which aim at improving the energy efficiency of standard
fairly standardised ships, in assembly line style production designs.
Figure 11: Radical ship concepts;
DNV’s ‘Containership of the Future’.
19

20. other impactinG factors
The fleet size, or rather the fleet growth rate, has been The diversion of traffic
identified as a factor that will impact on the baseline
emissions of the fleet, and hence on the achievable from southern routes
emission levels. However, there are numerous other factors
with the potential to affect emission levels. Some of these to shorter Arctic routes
could be considered as emission reduction measures in
their own right, while others are more naturally labelled as has the potential to
framework conditions. Such factors include the opening
of new sea routes, e.g. in the Arctic. The diversion of reduce global shipping
traffic from southern routes to shorter Arctic routes has
the potential to reduce global shipping emissions (Eide et emissions
al., 2010b). The expansion of the Panama Canal is another
example of how traffic flows may be altered by removing
physical obstructions to trade.
This is also linked to the increase in ship size due to
economy of scale. As larger vessels have less emissions per
unit of transport work, a significant shift in size from the
current average could make a considerable contribution
to reducing emissions.
A very different factor is related to new business models
in shipping. Alvarez et al. (2010) have shown that CO2
emissions can be reduced by adopting tailored port
berthing policies, instead of using the ‘first-come, first-
served’ approach. Although perhaps limited in themselves,
combinations of such factors could make a substantial
contribution to reducing emissions from shipping beyond
that which has been indicated in this publication.
20

21. Regulation of
CO2 emissions
the results of this study indicate that economics is policy options, and market-based instruments have also
of limited effect as a driving factor for emission reduction. been assessed.
The indication that there is a substantial potential for
cost-effective reduction in the present fleet (see Figure Specifically, the technical option is limited to a mandatory
9), demonstrates that potentially profitable measures limit on the energy efficiency design index (EEDI) for
for emissions and fuel reductions are currently not fully new ships. The main drawbacks of this option are the
exploited. Thus, regulatory means are necessary to ensure environmental effectiveness (not all ships covered) and
that there is full implementation of the available measures. also the cost-effectiveness (only technical measures are
‘allowed’). The operational policy options evaluated are
The lack of response to economic incentives can, to some mandatory limits on the energy efficiency operational
extent, be explained by the division between ship owners indicator (EEOI) and the adoption of a mandatory or
and ship charterers. Whilst a ship owner typically pays voluntary ship efficiency management plan (SEMP). The
for the investment in a new ship, the charterer pays for SEMP scores poorly on environmental effectiveness, while
the fuel. The contract between charterer and owner will the EEOI has a low rating regarding the practical feasibility
usually result in the profit from fuel saving being gained of its implementation, due to the challenges in establishing
by the charterer, while the bill for the more expensive ship an appropriate baseline. The market-based mechanisms
must be met by the owner. Further studies are warranted include the maritime emission trading system (METS) and
to investigate this issue in more detail. When designing an international GHG fund sustained by a fuel levy. The
regulations and incentives aimed at reducing the emissions, main drawback to market-based mechanisms seems to be
it is essential that the barriers to implementation (e.g. related to the practical feasibility of implementation, due
non technical, training) are understood. Regulations to the need for extensive administration.
should assist in overcoming barriers, and care should be
taken to ensure that new barriers are not unintentionally Regardless of the regulatory mechanism, there is a need
constructed by the introduction of new regulations. to determine the required emission reductions from
shipping, i.e. the target level. As a rational and transparent
The IMO is working to establish GHG regulations for approach to determining such a target, Skjong (2009)
international shipping (see e.g. IMO, 2008). While the and Eide et al. (2009b) suggested using a cost-effectiveness
form of regulations is still under debate, it seems clear criterion as a link between global reduction targets and
that some form of CO2 regulations in shipping will be shipping reduction targets. This approach can be pursued
implemented in the near future. regardless of regulatory mechanism. Longva et al. (2010)
provide examples of how this can be done.
In the second IMO GHG study (Buhaug et al., 2009),
the most relevant policy options have been assessed with
regard to environmental effectiveness, cost-effectiveness,
incentive for technological change, and practical feasibility
of implementation. Technical policy options, operational
21

22. Warming or cooling
from shipping emissions?
While debating how the shipping industry can reduce its
CO2 emissions, it is important to recognise that CO2 is
not the only emission of relevance from a climate change
perspective. Other emissions from shipping, such as NOx
and SOx, not only impact on health and environmental
issues, but also have an effect on the climate. While CO2
emissions result in climate warming, emissions of sulphur
dioxide (SO2) cause cooling through effects on atmospheric
particles and clouds, while nitrogen oxides (NOx) increase
the levels of the GHG ozone (O3) and reduce methane
(CH4) levels, causing warming and cooling, respectively
(Fuglestvedt et al., 2009). The result is a net global mean
radiative forcing from the shipping sector that is strongly
negative (Eyring et al., 2010; Fuglestvedt et al., 2008),
leading to a global cooling effect today (Berntsen et al.,
2008). However, this is about to change. New regulations
on shipping emissions of SO2 and NOx have been agreed
(IMO, 2009), and these will, as an unintended side-effect,
reduce the cooling effects due to emissions from the
shipping sector (Skeie et al., 2009).
Nevertheless, the warming effect of CO2 emissions is
undisputed. Lower levels of SOx and NOx emissions
mean that future shipping emissions will have a more
pronounced warming effect on the Earth’s climate, adding
to the urgency of addressing this problem.
Figure 13: Global mean temperature changes due to emissions from
shipping of CO2 and SO2, and NOx-induced changes in O3, CH4, and
O3PM, and the total temperature change (ΔT TOT). Plots show (a) the
response to a scenario with all emissions kept constant at year 2000
levels, and (b) the responses to a scenario with SO2 emissions reduced by
90 % with all other emissions kept at year 2000 levels. From Fuglestvedt
et al. (2009).
22

23. Conclusions and
recommendations
conclusions model that takes into account assumed ship-type specific
The shipping industry is under pressure to reduce CO2 scrapping and building rates. A baseline trajectory for CO2
emissions. Maritime rules and regulations that safeguard emission is then established. The reduction potential from
the interests of society in this respect, i.e. that limit climate the baseline trajectory and the associated marginal cost
change effects of emissions, are likely to emerge in the levels are presented.
years to come. As a result, individual ship owners and
operators will face pressures, both from the anticipated The results demonstrate that a scenario in which CO2
environmental regulations and also from high fuel prices, emissions are reduced by 33 % from baseline in 2030 is
to reduce their fuel consumption and thus their CO2 achievable at a marginal cost of USD zero (0) per tonne
emissions. Their main concern will be to comply with reduced. At this cost level, emissions in 2010 can be
the new rules and to outperform competition. Thus, reduced by 19 %, and by 24 % in 2020. A scenario with 49
two issues arise in parallel regarding the climate impacts % reduction from baseline in 2030 can be achieved at a
from shipping. These are: 1) technical and operational marginal cost of USD 100/tonne CO2 (27 % in 2010 and
solutions for cutting emissions on individual ships, and 35 % in 2020).
2) designing appropriate regulations that safeguard the
interests of society as a whole. The results also indicate that stabilising fleet emissions
at current levels can be attained at moderate costs,
The range of technologies and solutions that are available compensating for the projected fleet growth up to 2030.
for reducing GHG emissions from ships creates the need However, significant reductions beyond current levels seem
for a consistent and rational system for selecting the most difficult to achieve. If an absolute reduction in shipping
appropriate measures. This applies to individual ship emissions is the target, then a significant boost in research,
owners, policymakers, and regulators. Cost-effectiveness is development and testing is necessary in order to overcome
one such rational system for decision making. In this study, barriers and to accelerate the process of bringing novel
an overview of the available solutions has been presented, technologies to the market, and also to discover solutions
along with tools and methods for assessing the solutions that are yet to be imagined. This position paper has
from a cost-effectiveness perspective. discussed three such wild card technologies, all of which
have the potential to play some part in the future pathway
In addition, this study has assessed the cost and reduction to low carbon shipping.
potential for a range of abatement measures. The model
used in the assessment captures the world fleet up to In addition to developing technical and operational
2030, and the analyses include references to 25 separate measures that will enable ships to reduce emissions, work
measures. A new integrated modelling approach has been to establish international regulation of CO2 emissions
used, that combines fleet projections with activity-based from shipping is also in progress. Regardless of the
CO2 emission modelling and projected development of regulatory mechanism selected, there is a need for rational
measures for CO2 emission reduction. The world fleet determination of the required emission target level. A cost-
projections up to 2030 are constructed using a fleet growth effectiveness criterion, as a link between global reduction
23

24. targets and shipping reduction targets, has been suggested large-scale demonstration projects are necessary.
for this purpose. Development of tools and methods for assessing radical
and novel designs, along with the complex ship systems,
Finally, it is recognised that CO2 is not the only significant should be kept in focus. Improved tools for evaluating the
pollutant from shipping that is of relevance from a climate performance of new solutions will ease their introduction
impact perspective. Whilst the warming effect of CO2 into the shipping industry.
emissions is undisputed, a reduction in the levels of SOx
and NOx emissions will exacerbate the warming effect of
shipping emissions on the Earth’s climate, adding to the
urgency of addressing this issue.
recommendations
The results of this study indicate that economics is
insufficient as a driving factor for addressing this issue,
and that change and enforcement through regulatory
means are necessary to ensure full implementation of the
measures. For designing regulations and incentives aimed
at reducing emissions, further studies are warranted
to understand the barriers to implementation (e.g.
non-technical, training). Regulations should assist in
overcoming barriers, and care should be taken to ensure
that new barriers are not unintentionally constructed by
the introduction of new regulations.
For these reductions to occur, a concerted effort from all
parties of the ship transportation value chain is necessary,
including yards, technology suppliers, owners, operators,
cargo owners, and charterers. New ways of collaborating in
the operational and commercial phase must be developed,
with clear incentives for all parties to improve operations
towards overall emission reduction (new contract types
between parties, focussed environmental management,
accurate monitoring systems, etc.).
In order to develop innovative solutions and to implement
them in a rather conservative industry such as shipping,
24

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