Mercedes Mullins
The global shipping industry is a key player in international trade, facilitating the transportation of goods across vast distances. However, it also consumes significant amounts of fuel, contributing to environmental concerns. In recent years, the industry has faced pressure to reduce its carbon footprint and adopt more sustainable practices. The fuel consumption of the shipping industry varies depending on factors such as ship size, distance travelled, and engine type, with ultra-large container ships carrying significantly more fuel than smaller vessels. Slow steaming, a practice of reducing ship speed to conserve fuel, has gained popularity since the 2008-2009 financial crisis, despite requiring more ships or longer voyages to maintain schedules. To meet net-zero targets, the industry needs to lower fossil fuel consumption and explore alternative fuels like biofuels, ammonia, and hydrogen. Regulatory decisions, such as the International Maritime Organization's (IMO) cap on sulfur content in marine fuels, are also driving the shift towards cleaner energy sources and the adoption of LNG as an alternative fuel.
| Characteristics | Values |
|---|---|
| Fuel consumption in 2020 | 65.5 million metric tons of light fuel oil |
| Fuel consumption in 2019 | 6.5 million metric tons of light fuel oil |
| Container ship fuel capacity range | 1.5 million to 2 million gallons of fuel to 5 million gallons of fuel |
| Ultra-large container ship fuel capacity | 4.5 million gallons of fuel oil |
| Panamax container ship fuel capacity | 1.5 million to 2 million gallons of fuel |
| Normal speed range | 20-25 knots (37.0 – 46.3 km/hr) |
| Slow steaming speed range | 18-20 knots (33.3 – 37.0 km/hr) |
| Extra slow steaming speed range | 15-18 knots (27.8 – 33.3 km/hr) |
| Minimal cost speed range | 12-15 knots (22.2 – 27.8 km/hr) |
| Bunker fuel cost | $552 per ton |
| Fuel consumption of a large modern container vessel | 217 tons per day |
| Energy consumption of the global shipping industry in 2021 | 8.7 exajoules |
| Energy consumption of the global shipping industry in 2030 | 7.6 exajoules |
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What You'll Learn
The shift to cleaner fuels
The shipping industry uses more than 300 million tons of fossil fuels every year, which is roughly 5% of global oil production. In 2018, global shipping activity emitted approximately 1.05 billion tons of carbon dioxide into the atmosphere, contributing about 2.9% of total global anthropogenic CO2 emissions for that year. As global commerce continues to expand, transoceanic shipping will also increase. Therefore, the shipping industry and regulators recognize the need for change.
To reduce emissions and meet net-zero targets, the industry is exploring alternative fuels and propulsion methods. Liquefied natural gas, methanol, hydrogen, and ammonia are among the energy sources being considered to replace traditional heavy fuel oils. Additionally, efficiency measures such as slow steaming (reducing ship speeds), bulbous bows, and propeller and hull upgrades have helped decrease the carbon intensity of shipping by over 30% since 2008.
While the transition to zero-carbon shipping is challenging, it offers significant opportunities for innovation and environmental benefits. It can drive the development of low-carbon fuel infrastructure, improve coastal air quality, reduce health risks, and create new jobs. However, reaching net-zero shipping emissions by 2050 will require stronger commitments, advancements in clean fuel technologies, efficient ship designs, and supportive infrastructure, along with substantial funding.
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Slow steaming
The practice offers financial, environmental, and performance-related benefits. Financially, slow steaming helps shipping companies save money on fuel, which is critical when fuel prices rise and during recessions. The environmental benefits are connected to the use of less fuel, which results in less emissions and less pollution, contributing to the fight against climate change. In terms of performance, a vessel will become more reliable and efficient when it regularly implements slow steaming.
However, there are trade-offs and challenges associated with slow steaming. One trade-off is the increased costs of personnel, insurance, and inventory due to the longer voyage duration. To maintain schedules, carriers need to increase the number or size of ships on a particular route. Additionally, there are time-dependent costs, such as crew wages and charter rates, that will increase with longer voyages. Slow steaming can also impact supply chain management, maritime routes, and the use of transshipment hubs, depending on the type of trade involved.
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Fuel capacity and consumption
Fuel capacity on container ships varies depending on the size of the ship and the route it will take. For instance, the CMA CGM Benjamin Franklin, an ultra-large container ship, can carry approximately 4.5 million gallons of fuel. Panamax container ships, which can pass through the Panama Canal, typically hold between 1.5 and 2 million gallons of fuel. Ships in the 8,000 to 14,000 TEU range can carry between 2.5 and 3.5 million gallons of fuel.
The amount of fuel consumed on a voyage depends on the ship's speed and the length and conditions of the journey. A Panamax container ship can burn through 63,000 gallons of fuel per day at a speed of 20 to 25 knots. Slowing down by just 10% can reduce fuel consumption by about one-third. This is why many shipping companies have adopted
In 2020, the International Maritime Organization (IMO) imposed a regulation called "IMO 2020," limiting the sulfur content of marine fuels to 0.5%. This prompted shipping companies to switch to cleaner fuels like LNG and install scrubbers to clean exhaust gases. While this increased operating costs, it helped reduce emissions.
The global shipping industry consumed 8.7 exajoules of energy in 2021, all from burning fossil fuels. To meet net-zero targets by 2030, the industry needs to reduce fossil fuel consumption and adopt low-carbon fuels.
Despite the environmental concerns, it's worth noting that shipping goods by sea is much more fuel-efficient than by air or road. For example, moving goods by ocean container is around 17 times more fuel-efficient than by air and 10 times more efficient than by road.
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Environmental impact and regulations
The environmental impact of the shipping industry is significant. The industry is responsible for more than 18% of nitrogen oxides pollution, and 3% of greenhouse gas emissions. The annual increase in shipping overwhelms gains made by efficiency measures such as slow steaming. The growth in tonne-kilometers of sea shipments has averaged 4% per year since the 1990s, and has grown by a factor of 5 since the 1970s.
The environmental impacts of the shipping industry include air pollution, water pollution, acoustic, and oil pollution. Cruise ships, tankers, and bulk cargo carriers use a huge amount of ballast water, which is often taken on in coastal waters and can contain aquatic invasive species. The release of ballast water can negatively impact the marine environment. Oil spills, chemical spills, and waste discharges are also a major issue, with plastic pollution being introduced by cargo losses and the illegal dumping of plastic waste.
The industry's substantial tax privileges have contributed to growing emissions, and large marine diesel engines have been linked to nitrogen oxide emissions in certain areas.
There are, however, a number of regulations in place to reduce the environmental impact of the industry. The International Maritime Organization (IMO) is the primary international body responsible for setting and enforcing standards for the industry. The IMO has introduced the International Convention for the Prevention of Pollution from Ships (MARPOL), which is the main international convention to prevent marine pollution by ships from operational or accidental causes. The IMO also introduced the Sulphur Cap, which came into effect on January 1, 2020, limiting the amount of sulfur oxide emissions from ships. This regulation has encouraged the industry to switch to cleaner fuels and equip their vessels with sulfur abatement systems.
Other regulations include the Nairobi Convention on the Removal of Wrecks (2007), which regulates shipwreck removal to reduce environmental impacts, and the International Convention on Civil Liability for Oil Pollution Damage (CLC), which defines shipowners as the liable party in the case of oil spills. Many countries have also introduced their own national regulations to reduce the environmental impact of the industry.
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Cost implications
The cost of fuel represents 50-60% of a ship's total operating costs. As such, the shipping industry has been hit hard by rising fuel costs. In response, the industry has adopted a practice known as "slow steaming", where ship speeds are reduced to conserve fuel. While this has been valuable in cutting costs, it has also led to the increased use of larger ships and longer shipping times.
Slow steaming emerged during the 2008-2009 financial crisis, when maritime shipping companies reduced ship speeds to 19 mph. This practice has become the new normal, with over 50% of global container shipping capacity operating under these conditions as of 2011. By running their engines below capacity, companies can save on fuel consumption, but at the expense of additional travel time and the need for more or larger ships to maintain schedules.
The cost implications of slow steaming are significant, with the trade-off between fuel savings and longer shipping times impacting supply chain management, maritime routes, and the use of transshipment hubs. However, with rising environmental concerns, slow steaming has been justified as a way to reduce emissions, in addition to cutting costs.
In 2020, the International Maritime Organization (IMO) imposed a regulation known as "IMO 2020", which limited the sulfur content of marine fuels to 0.5%. This prompted a switch to cleaner fuels, such as low-sulfur fuel oil (LSFO) and liquefied natural gas (LNG), which are more expensive than heavy fuel oil (HFO). The higher cost of LSFO, coupled with the need for specialised tanks for LNG storage, has further impacted the cost of shipping operations.
To meet net-zero targets by 2030, the shipping industry will need to reduce its consumption of fossil fuels and introduce low-carbon marine fuels. This will likely result in further cost implications as the industry adapts to new fuel sources and technologies.
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Frequently asked questions
The global shipping industry consumed 8.7 exajoules of energy in 2021, all of which came from burning fossil fuels.
Ships primarily use heavy fuel oil (HFO), a byproduct of crude oil refining. However, due to environmental regulations, there has been a shift towards low-sulfur fuel oil (LSFO) and alternative fuels such as LNG and hydrogen.
This depends on the size of the ship and the route it takes. Ultra-large container ships can carry around 4.5 million gallons of fuel, while smaller Panamax ships typically hold between 1.5 and 2 million gallons.
Fuel consumption is heavily influenced by speed. Reducing speed can result in significant fuel savings, with a 10% decrease in speed leading to a one-third reduction in fuel consumption. This has led to the practice of "slow steaming," where ships reduce their speed to conserve fuel.
With rising environmental concerns and regulations, the shipping industry is under pressure to reduce its carbon footprint and switch to cleaner energy sources. Additionally, fuel costs represent a significant portion of total ship operating costs, so improving fuel efficiency can help reduce expenses.
