Shipping faces the challenge of decarbonisation
Bain & Co: a good place to start is by improving the efficiency and carrying out technical upgrades of existing fleets
Key points
- The sector is grappling with the European target to cut emissions
The shipping industry is undergoing a structural transformation in which geopolitical tensions, new environmental obligations and record shipyard costs are reshaping investment strategies. This snapshot was provided by an analysis presented by Bain & Company to RINA’s Hellenic Advisory Committee and published in advance.
Construction sites at full capacity and prices up by 30%
The sector has been in the spotlight for years now, having suffered the effects of a long chain of critical events: from the war in Ukraine to the uncertainty surrounding the situation regarding Strait of Hormuz, not to mention the blockage of the Suez Canal, which forced merchant ships travelling from the Far East to Europe to circumnavigate Africa, resulting in increased costs and longer transit times. It is precisely the lengthening of trade routes that has increased demand for maritime transport and has led, on the one hand, to the saturation of shipyards, with utilisation rates expected to reach 83% by 2027, and on the other to a 30% jump in newbuild prices compared to the historical average. Currently, according to Bain, there are orders on the books for approximately 190 million tonnes of capacity, equivalent to 18% of the existing global fleet.
The sector grapples with the European emissions reduction target
Complicating matters is the energy transition: with a view to climate neutrality that Europe is expected to achieve by 2050, EU regulations have imposed a reduction in emissions on the sector, which is expected to reach 70% by 2040. Once again, there is a lack of concrete, accessible solutions: the sector has not yet identified a dominant alternative fuel among hydrogen, ammonia and methanol, whilst port refuelling infrastructure remains limited.
Data analysis monitoring to cut fuel consumption by up to 15%
In this scenario, the most immediate lever for improving competitiveness is operational efficiency. “In times of uncertainty, the most rational approach is to maximise the return on assets in the portfolio through operational efficiency measures and selected technical upgrades, enabled by the acquisition of in-depth knowledge of vessel performance through the collection and analysis of on-board data ,” explains Matteo Binetti, associate partner at Bain&Co. and author of the report. “Those who wait passively, however, risk ending up with an uncompetitive fleet should the commercial landscape shift and when the crackdown on ESG requirements comes into effect.”
The use of advanced systems for monitoring and analysing on-board data, for example, makes it possible to reduce fuel consumption by between 3% and 15%, thanks to more effective management of routes, on-board systems and refuelling operations. Savings can be achieved through technical modifications to existing vessels, such as hull optimisation, wind-assisted propulsion systems and hybrid energy solutions.
