The Global Energy Transition: An Opportunity Tanker Owners Can’t Miss

The shipping industry bears a double burden in emissions production. Ships consume fossil-based fuels to sail, and tankers transport them for use; nearly 20% of all shipping freight is oil and gas.

When we think about reducing CO₂ emissions, phasing out fossil fuels is the natural follow-up. But what does that mean for the ship owners whose businesses run on getting the energy global industry and consumers need from points of production to end users? Is there an opportunity for them to make a change to the cargoes they carry and the fuels they use?

All over the world and in every sector, companies are on the lookout for low-emission energy sources. Whether established and emerging fuels like bio and e- LNG or methanol, or more long-term solutions like green hydrogen, ammonia, shipping will no doubt play its role in fuel transportation. For tankers, this could be a turning point – a chance to break into new energy markets – and a chance to make bold decisions as to their own fuel choices.

The future backbone of a decarbonized world

Bureau Veritas believes that the road to a decarbonized global economy may well run through the ocean. Ocean freight currently produces fewer emissions than air or rail (in ton x km). As regulators implement new carbon tax measures, shipping will need to maintain this competitive edge. Furthermore, new maritime green corridors^[1] will help ships travel more sustainably from port to port. These conditions could position the maritime industry as the backbone of global clean energy transportation, connecting low- and zero-carbon energy production sites with buyers.

To seize this market opportunity, tanker owners will need to futureproof their vessels, designing or retrofitting with new energies in mind. Those new low-carbon fuels are less energy dense than fossil fuels, meaning tankers will need to increase their cargo and bunker capacity.

Furthermore, since some engines are still in development, owners may, for example, opt for ships able to carry ammonia and LPG now, to be able to use ammonia as a fuel later. Bureau Veritas has created the AMMONIAFUEL-PREPARED class notation for this purpose.

Fleet owners may also consider building ships that can transport liquefied CO₂, as carbon capture and offshore storage projects are gaining traction.

Owners may also look to energy efficiency to drive decarbonization. Here, wind-assisted propulsion is building momentum as a complement to conventional propulsion methods. Bureau Veritas strongly believes in its potential and is working to support owners, yards and manufacturers.

To remain operational as carbon emission restrictions tighten, tankers will also need to adopt new fuels and propulsion methods, as well as new cargoes. This will mean advancing tanker design to be more agile in operation.

Making smart decisions in a challenging context

There is no denying that the energy sector is volatile, susceptible to geopolitical turmoil and economic fluctuations. Because of this, tanker operators are used to being flexible, adapting their business to prevailing market conditions. These skills will be crucial going forward, as global energy markets begin to decarbonize.

“To flourish,” says Jonathan Hudson, Global Market Leader, Tanker Market, “tanker owners will need to make key decisions regarding which fuels they can carry both safely and profitably. They’ll have to balance short- and long-term interests, accounting for the phase-out of fossil fuels and scaling up of low-carbon fuels. And they will need to address OPEX challenges like maintaining CII compliance or training crews to safely handle new cargoes.”

Supporting forward-thinking tanker owners

“We’re here to support tanker owners navigate a changing industry,” says Jonathan. “Our technical experts work across the oil and gas value chain so we can offer holistic services to marine and offshore players. At BV, we’re uniquely placed to grant clients end-to-end visibility on trends and insight into consumer expectations for the energy market.”

Bureau Veritas also provides tanker owners with leading experience in specialized product tankers, alternatively-powered ships and low-carbon technologies. We support the development of onboard ammonia and hydrogen carriage, and recently provided an Approval in Principle for a liquefied CO₂ carrier. Whatever challenges our clients face, we are by their side, helping their tankers become more sophisticated and ready for a low-carbon future.

^[1] Categorized by the Global Maritime Forum as specific shipping routes where the technological, economic and regulatory feasibility of the operation of zero-emission ships is catalyzed by a combination of public and private actions