Shipping’s Decarbonization Outlook for 2023
by Brian Gicheru Kinyua (Maritime Executive) Will the CII succeed? Will green fuels take off? And will the IMO enact a carbon levy? This year, we may have the answers. … Specifically, 2023 could be a definitive year for CII (Carbon Intensity Indicator) regulation. Will it succeed or fail? The question has become even more salient after BIMCO recently released its CII Operations Clause for Time Charter Parties. The general feeling is that the BIMCO Clause has brought more confusion, with owners and charterers divided on their roles in implementing CII regulations.
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Adding to the discussion, Harilaos Psaraftis, Professor of Maritime Transport based at Technical University of Denmark, commented that in 2023 there is some hope for a carbon levy to progress at the IMO – perhaps the only way that green fuels may ever become truly competitive.
Alternative fuels begin to take off
Meanwhile, some analysts are christening 2023 as the dawn for alternative fuels in shipping. Biofuels and LNG are expected to become more popular in the year.
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The sector’s interest LNG as a marine fuel was exceptionally strong in 2022. According to Clarksons Research, some 288 LNG-capable vessels had been ordered in the third quarter of 2022. This represents 54 percent of all orders by tonnage.
LNG-capable vessels are preferred in part for their flexibility. Although the LNG energy market’s volatility persists, there is likely to be a demand explosion for LNG-capable ships, with gas prices expected to correct in 2023.
Methanol is another alternative shipping fuel predicted to gain a commercial head start in 2023. In 2022, major carriers such as Maersk and COSCO committed billions of dollars in development of methanol-fueled containerships.
