Transport

Ships

It takes 5 million barrels of fuel per day to move commercial ships across the routes shown on this map. Added up over the course of a year, international shipping emits more than 800 million tons of carbon dioxide or its equivalent in other greenhouse gases—11 percent of the total emissions from the transportation sector.

More than 80 percent of global trade, by volume, floats its way from place to place. 90,000 commercial vessels—tankers, bulk dry carriers, and container ships—make the movement of goods possible, transporting more than 10 billion tons of cargo in 2015.

Shipping produces 3 percent of global greenhouse gas emissions. Forecasts predict they could be 50 percent to 250 percent higher in 2050. Because of huge shipping volumes, increasing shipping efficiency can have a sizable impact.

Efficiency begins with ship design and onboard technology. Fuel-saving innovations include:

flat extensions called ducktails at the rear to lower resistance; and
compressed air pumped through the bottom of the hull to create a layer of bubbles that “lubricate” passage through the water.

Maintenance and operations also are vital for marine fuel efficiency. Techniques like removing debris from propellers, smoothing the surface of a hull with a sharkskin-like coating, and “slow steaming”—reducing a ship’s operating speed—all lower fuel consumption.

^#32

Rank and Results by 2050

7.87 gigatons
reduced CO2

$915.93 Billion
net implementation cost

$424.38 Billion
net operational savings

Impact: With an efficiency gain of 50 percent across the international shipping industry, 7.9 gigatons of carbon dioxide emissions can be avoided by 2050. That could save $424 billion in fuel costs over thirty years and $1 trillion over the life of the ships.

References

global trade…commercial vessels…[total] cargo: UNCTAD. Review of Maritime Transport 2015. Geneva: United Nations Conference on Trade and Development Secretariat, 2015.

Ships…[vs.] plane[s]: Mathers, Jason. Smart Moves: Creative Supply Chain Strategies Are Cutting Transport Costs and Emissions. New York: Environmental Defense Fund, 2012.

Shipping…emissions: Smith, T. W. P., et al. Third IMO Greenhouse Gas Study 2014. London: International Maritime Organization, 2014.

ducktails…and compressed air: Almeida, Rob. “Part 1: How to Design a More Efficient Ship.” gCaptain. January 4, 2012. (Data from Wärtsilä.)

Energy Efficiency Design Index: ICCT. “The Energy Efficiency Design Index (EEDI) for New Ships.” Policy update from the International Council on Clean Transportation. October 3, 2011.

A-to-G Greenhouse Gas Emissions Rating: Scott, Mike. “Sustainable Shipping Is Making Waves.” The Guardian. August 1, 2014.

port authorities…discount harbor fees: RightShip. Port Incentive Programs: Rewarding Sustainable Shipping. Melbourne, London, and Sugar Land, TX: RightShip, 2016.

sharkskin-like [hull] coating: U.S. Navy. “New Hull Coatings for Navy Ships Cut Fuel Use, Protect Environment.” Washington, D.C.: Office of Naval Research, 2009.

[impact of] “slow steaming”: Wang, Haifeng, and Nic Lutsey. Long-Term Potential for Increased Shipping Efficiency through the Adoption of Industry-Leading Practices. Washington, D.C.: International Council on Clean Transportation, 2013.

industry-leading ships [vs.] laggards: Haifeng and Lutsey, Shipping Efficiency.

[potential to] reduce shipping emissions: Haifeng and Lutsey, Shipping Efficiency.

low-grade bunker fuel [vs.] diesel: Wan, Zheng, Mo Zhu, Shun Chen, and Daniel Sperling. “Pollution: Three Steps to a Green Shipping Industry.” Nature 530 (2016): 275-277.

deaths…[from] particulate matter: Corbett, James J., James J. Winebrake, Erin H. Green, Prasad Kasibhatla, Veronika Eyring, and Axel Lauer. “Mortality from Ship Emissions: A Global Assessment.” Environmental Science and Technology-Columbus 41, no. 24 (2007): 8512.

International Maritime Organization…delay [on emissions]: Harvey, Fiona. “Shipping Industry Criticised for Failure to Reach Carbon Emissions Deal.” The Guardian. October 28, 2016.

view all book references

Errata

p. 140

More than 80 percent of global trade, by weight, floats its way from place to place.

Key efforts aim to improve ship design and the technology onboard.

Considering that trillions of dollars of goods are shipped annually, it may fall to the companies whose goods are being transported to pressure maritime shipping into being a responsible industry.

view all errata

Technical Summary

Ships

Project Drawdown defines the ships solution as: the use of technologies to make maritime shipping less fuel-intensive. This solution replaces conventional maritime shipping practices and technologies.

Shipping is a large contributor to greenhouse gas emissions. Emissions from shipping for the year 2012 are estimated at 972 million tons of carbon dioxide-equivalent gases. These emissions are forecasted to increase by 50-250 percent over the next 33 years, representing 10-14 percent of global emissions by 2050. Emissions from shipping are a function of: the demand for transportation work, the efficiency of ships, operational conditions at sea, fuel used, and more. There are many emissions reduction techniques available, including technical improvements, operational measures, and fuel replacement. In addition to the practice of “slow steaming,” [1] this solution considers a suite of 17 energy-efficient technologies based on the Global Maritime Energy Efficiency Partnership (GloMEEP) project by the International Maritime Organization (IMO).

Methodology

Total Addressable Market [2]

The total addressable market for ships is defined as the total demand for maritime freight work projected to 2050 by the IMO and others. The model uses various projections of the Energy Efficiency Operational Indicator (EEOI), which are derived from forecasts of different scenarios of greenhouse gas emissions and transport work done by ships in the future. An efficient ship is assumed to be 50 percent more efficient than a conventional ship, based on a combination of different efficiency measures and the practice of slow steaming. [3]

Current adoption [4] of efficient ships is estimated as 31 percent of the total addressable market. [5] This was calculated by taking the improvement in EEOI in 2014 compared to 2008. [6]

Adoption Scenarios [7]

Future adoption of ships was estimated using EEOI projections to 2050 made in the Third Greenhouse Gas Study of the IMO. Impacts of increased adoption of ships from 2020-2050 were generated based on three growth scenarios, which were assessed in comparison to a Reference Scenario where the solution’s market share was fixed at the current levels.

Plausible Scenario: The average of the EEOI projections was used, and applied to work done by ships operating at 50 percent efficiency.
Drawdown Scenario: Adoption is based on one standard deviation above the mean EEOI values from all sources, and applied to work done by ships operating at 50 percent efficiency.
Optimum Scenario: This scenario uses the most ambitious EEOI value in each projected year and applies to work done by ships operating at 50 percent efficiency.

Emissions Model

Emissions reductions are determined based on reduced fuel use resulting from the efficiency measures and slow steaming.

Financial Model

Capital costs for incorporating the energy-efficiency measures, and fuel savings from implementing these measures, are calculated by looking only at the cost of adding efficiency measures to a conventional ship. Hence, the cost of an efficient ship is estimated as the retrofitting cost for the 17 technologies identified. [8] The cost of the solution is assumed to have a 5 percent learning rate based on a report from the International Council on Clean Transportation (ICCT), which indicated that some of the technologies are new enough to warrant higher rates (10-15 percent).

Operating costs are derived from the cost of fuel use (based on the average pricing from 2005-2015) [9] and maintenance costs of the efficiency measures (IMO, 2015). Only fuel costs are considered for conventional ships.

Results

The Plausible Scenario projects that energy-efficient shipping can lead to an estimated emissions reduction of 7.9 gigatons of carbon dioxide-equivalent greenhouse gases from 2020-2050, at an additional cost of approximately US$915 billion [10] and a net operating savings of US$424 billion. The Drawdown Scenario shows an avoidance of 9 gigatons of greenhouse gas emissions; the Optimum Scenario avoids 9.5 gigatons of emissions.

Discussion

Large capital investments are required to capture the benefits estimated above, and these may be difficult to finance due to split incentives [11] and difficulties in verifying fuel savings. However, some of these investments can be recovered quickly, leading to lifetime cost savings. We included some technologies that were not yet cost-effective. If these were removed, the profitability of efficient ships would increase, but at the expense of lower emissions impacts. A more granular analysis with faster learning rates of up to 15 percent for some technologies could prove insightful. While there are cost and emissions savings in each Drawdown scenario, the cost of freight transportation may increase in the short term, which may result in a marginal increase in the prices of commodities.

Although a reduction in greenhouse gas emissions from ships is forecasted over time, the rate of these reductions has to be increased so that the aggregate emissions from international shipping can be controlled. Voluntary adoption of energy-efficiency measures for ships has been observed in the case of certain shipping companies, as it leads to direct lowering of operational costs for ships. Nevertheless, there are many financial and informational challenges which need to be overcome before all ships adopt energy-efficient measures.

[1] During slow steaming, ships reduce their speeds to a minimum which has a significant reducing effect on fuel use as fuel use increases with the third power of speed.

[2] For more on the Total Addressable Market for the Transport Sector, click the Sector Summary: Transport link below.

[3] Many technologies and approaches can be used to improve energy efficiency, in so many combinations that there could be hundreds of ways to make ships more efficient. Based on the existing literature, it is estimated that a maximum of 22.5 percent of improvements can be attained through energy-efficiency measures and 27.5 percent of improvements can be attained from slow steaming.

[4] Current adoption is defined as the amount of functional demand supplied by the solution in the base year of study. This study uses 2014 as the base year due to the availability of global adoption data for all Project Drawdown solutions evaluated.

[5] This high level of adoption is assumed to be a function of extensive use of slow steaming across the shipping industry after the economic and financial crisis of 2008. It is noted that slow steaming is a practice that can be changed based on market forces, which may encourage operators to return to faster speeds.

[6] We assume that in 2008 all ships were conventional, so any improvement in EEOI is attributed to the adoption of “efficient ships,” which are 50 percent more efficient than the ships of 2008.

[7] For more on Project Drawdown’s three growth scenarios, click the Scenarios link below. For information on Transport Sector-specific scenarios, click the Sector Summary: Transport link.

[8] We assume that this cost is close to the additional cost of purchasing a new ship with these technologies, as compared to purchasing a conventional ship.

[9] Intermediate Fuel Oil (IFO) 380

[10] All monetary values are presented in US2014$.

[11] The costs are likely borne by the shipping companies, but the operating savings they would enjoy are lower, so the actual benefit is environmental, recreating the classic tragedy of the commons problem.

Technical Assessment References (PDF)

Methodology and Results

Introduction to Scenarios

Table: Summary of Solutions by Overall Rank

Sector Summary: Transport

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