In its latest weekly insight for the shipping industry, analyst Clarksons Research has previewed this week’s Nor Shipping with its MD Steve Gordon (pictured) commenting as follows:
A key element in shipping’s vital decarbonisation pathway (today shipping emits 2.1% of global CO2) will be a transition to a “greener” fleet and many from the 1,000 strong exhibitor list at Nor-Shipping will be marketing innovative solutions around Energy Saving Technologies (ESTs), alternative fuel solutions and routing optimisation software.
Our latest Green Technology Tracker profiles progress with 5.5% of fleet capacity today alternative fuelled, up from 2.3% in 2017 and expected to reach 8% by 2025. Although alternative fuelled newbuild ordering has been a little slower in 2023 to date – albeit with a relative trend towards methanol: 14% of orders by tonnage vs 22% dual fuel LNG – 48% of overall orderbook capacity is now alternative fuelled versus 11% in 2017.
The orderbook also has plenty of optionality built in with 371 LNG ‘ready’ orders, 191 ammonia ‘ready’, 130 methanol ‘ready’ and 9 hydrogen ‘ready’.
Many suppliers at Nor-Shipping will be busy promoting ESTs. We estimate significant ESTs have already been fitted on over 6,250 ships, accounting for 27.3% of fleet tonnage: this includes propeller ducts (>2,000), rudder bulbs (>1,600), Flettner rotors (>20), wind kites and rigid sails (>12), air lubrication systems (>350) and others.
Scrubbers are now fitted to over 5,050 ships in the fleet, equivalent to 25% of total tonnage; retrofitting activity remains at relatively low levels but orders for newbuildings have picked up marginally in 2023, with reported orders already surpassing last year’s total.
‘Eco’ ships make up a growing share of the fleet (eco ‘modern’ vessels now 30.4% of total GT vs 14.6% at start-2018). As we have discussed previously, there will be implications for earnings potential, asset values and increasingly ‘tiered’ and complex charter markets as this green fleet transition evolves.
And for shipyards exhibiting, there is the opportunity for huge fleet renewal requirements – we estimate $1.6 trillion of newbuild orders in the next 10 years although investment may be ‘lumpy’ as technology, regulations and yard capacity evolve.
Offshore wind is a hugely exciting sector that we expect to play a vital role in global energy transition – today we estimate that 0.4% of global energy is produced by offshore wind but that this could grow to between 7% and 9% by 2050.
We have been closely tracking all wind farm projects globally – we forecast there could be over 30,000 turbines and 740 farms producing 250 GW by 2030 compared to 12,000 turbines, 280 farms and 60 GW today – as well as a specialised fleet that is quickly developing to support construction and maintenance.
At the other end of the spectrum, Offshore oil and gas (Norway has rich heritage and expertise here) still produces 16% of global energy and, after many years in the ‘doldrums’, day rates and utilisation are improving as the world tries to balance energy transition with energy security needs.