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20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
20120911 Shipping 2020
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20120911 Shipping 2020

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This is a presentation covering the main points of the DNV produced report SHIPPING 2020. THis report covers the potential scenarios for the future of shipping till 2020.

This is a presentation covering the main points of the DNV produced report SHIPPING 2020. THis report covers the potential scenarios for the future of shipping till 2020.

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  • 1. 27 September 2012 “SHIPPING 2020” TECHNOLOGY INVESTMENTS IN THE NEW MARKET REALITY CONTENTS WHY "Shipping 2020" METHODOLOGY AND ASSUMPTIONS FINDINGS BEYOND 2020© Det Norske Veritas AS. All rights reserved. 2 1
  • 2. 27 September 2012 FINDINGS "Shipping 2020" – Summary More than 1 in 10 new buildings in the next 8 years will be delivered with gas fuelled engines In 2020, the demand for marine distillates could be as high as 200-250 million tonnes annually Newbuildings in 2020 will emit up to 10 to 35% less CO2 than today’s ships. The EEDI will be a driver for more than half of this reduction Scrubbers are a significant option after 2020 Ballast water treatment systems will be installed on at least half of the world fleet At least 30-40% of newbuildings will be fitted with EGR or SCR by 2016© Det Norske Veritas AS. All rights reserved. 3 WHY "Shipping 2020"© Det Norske Veritas AS. All rights reserved. 4 2
  • 3. 27 September 2012 WHY "SHIPPING 2020" What is “Shipping 2020”? QUESTION: What technologies should be installed to meet new environmental regulations and higher fuel prices? CHALLENGE: Uncertainties associated with market trends and drivers, fuel choices, technology developments and other variables. The wrong investment decisions will be detrimental to both the industry and individual ship owners. Wrong decisions impact the financial bottom line and the environment. ANSWER: "Shipping 2020" aims to indicate which technologies are most likely to be adopted by the industry by 2020.© Det Norske Veritas AS. All rights reserved. 5 WHY "SHIPPING 2020" External drivers creates uncertainty about the future World economy and demand for transport Environmental regulations Fuel trends (price, mix)© Det Norske Veritas AS. All rights reserved. 6 3
  • 4. 27 September 2012 FINDINGS How does this affect the ship owner?The next decade poses some important questions for the ship owner When should I install ballast water treatment ? ?? systems? Should I meet sulphur regulations through investing in LNG fuelled engines or scrubbers, or by fuel switch? ? Do I need a NOx Tier III compliant vessel enabling global operation? What is my cost-benefit of going beyond compliance on the EEDI? ?© Det Norske Veritas AS. All rights reserved. 7 METHODOLOGY AND ASSUMPTIONS© Det Norske Veritas AS. All rights reserved. 8 4
  • 5. 27 September 2012 METHODOLOGY AND ASSUMPTIONS The process – the big picture Scenario Scenario Scenario Scenario A B C D World economy Environmental Fuel trends and demand regulations (price, mix) for transport Investment profile Technology SIMULATION and ship trends MODEL characteristics RESULTS© Det Norske Veritas AS. All rights reserved. 9 METHODOLOGY AND ASSUMPTIONS Megatrends and external drivers ECONOMIC GROWTH REGULATORY AND FUEL TRENDS AND DEMAND FOR STAKEHOLDER TRANSPORT PRESSURE • Boom or bust? • Global or local • Sustained high fuel • Growth level and regulations? prices? level of contracting • Further requirements • LNG cheaper than • Overcapacity of on GHG emissions? HFO? vessels? • Rating schemes and • Development of LNG requirements from infrastructure charterer and public • Impact of sulphur regulations© Det Norske Veritas AS. All rights reserved. 10 5
  • 6. 27 September 2012 METHODOLOGY AND ASSUMPTIONS Scenarios have been created to capture uncertainties© Det Norske Veritas AS. All rights reserved. 11 METHODOLOGY AND ASSUMPTIONS Some of the assumptions used in the model© Det Norske Veritas AS. All rights reserved. 12 6
  • 7. 27 September 2012 METHODOLOGY AND ASSUMPTIONS Technologies have been assessed against relevant regulations© Det Norske Veritas AS. All rights reserved. 13 METHODOLOGY AND ASSUMPTIONS Ship owner survey – motivation and barriersCompliance and fuel efficiency are the main motivation, and cost andtechnology maturity are the main barriers Main motivation Main barriers Source: DNV survey (23 respondents)© Det Norske Veritas AS. All rights reserved. 14 7
  • 8. 27 September 2012 METHODOLOGY AND ASSUMPTIONS Ship owner survey – investment preferences Investment horizon (payback requirements) and how much of the fuel cost is paid by the ship owner impact the cost-effectiveness of many measures Source: DNV survey (23 respondents)© Det Norske Veritas AS. All rights reserved. 15 METHODOLOGY AND ASSUMPTIONS Which technologies do ship owners envisage using in the future? FIGURE 3: FAMILIARITY AND EXPERIENCE WITH TECHNOLOGIES FIGURE 4: LIKELIHOOD OF IMPLEMENTING TECHNOLOGIES Low sulphur heavy fuel oil Ballast Water Treatment System Distillate fuel Low sulphur heavy fuel oil Shaft generators System efficiency improvement (Aux) Ballast Water Treatment System Hull shape optimisation Waste heat recovery Waste heat recovery Propulsion efficiency devices Propulsion efficiency devices Hull shape optimisation Distillate fuel SOx scrubber EGR system System efficiency improvement (Aux) Low NOx tuningSmaller engine/de-rating (speed reduction) Shaft generators Low NOx tuning Smaller engine/de-rating (speed reduction) Reduction of seawater ballast capacity Reduction of seawater ballast capacity EGR system SCR system Counter-rotating propulsion SOx scrubber Dual-fuel engine Lightweight constructions SCR system Dual-fuel engine Hybrid propulsion system Water emulsification Pure LNG engine Humid air motor/ direct water injection Water emulsification Hybrid propulsion system Lightweight constructions Counter-rotating propulsion Air cushion Pure LNG engine Humid air motor/ direct water injection Air cushion Wind & solar power Wind & solar power 1 2 3 4 5 1 2 3 4 5 Low Score High Low Score High Familiarity with technology Likely to be retrofitted Tested Likely to be implemented on new builds Source: DNV survey (23 respondents)© Det Norske Veritas AS. All rights reserved. 16 8
  • 9. 27 September 2012 METHODOLOGY AND ASSUMPTIONS Time spent in ECAApproximately 40% of the world fleet enters into the North America orNorthern Europe ECA during a year Half of these vessels spend less than 5% of their time there Time spent in ECA Share of fleet Source: AIS data© Det Norske Veritas AS. All rights reserved. 17 METHODOLOGY AND ASSUMPTIONS Model illustration : simulation of individual ships Investment profile and ship Generate a characteristics representative sample of the Assign each ship a current world fleet ship owner investment profile Technology alternatives Technology cost Results decreases with more installations Annual technology and fuel type 2020 2019 2018 2017 2016 2015 2014 2013 2012 decisions per ship Fuel price and regulatory requirements Add newbuildings to the fleet each year Growth in seaborne transport Remove scrapped ships from the fleet each year© Det Norske Veritas AS. All rights reserved. 18 9
  • 10. 27 September 2012 METHODOLOGY AND ASSUMPTIONS Assumptions and information sources Parameter Distribution Scenario dependent Source Ship segment Number of ships Fixed No IHS Fairplay Age distribution Parameterized No IHS Fairplay ME power Fixed No IMO GHG Study Aux power Fixed No IMO GHG Study Nos of Aux Fixed No IMO GHG Study Ballast water capacity Fixed No IHS Fairplay Specific fuel consumption Fixed No MAN Operational profile Days in cruise Uniform No IMO GHG Study Days in ECA Parameterized No AIS ME engine cruise load Uniform No IMO GHG Study Aux engine cruise load Fixed No IMO GHG Study Ship owner Investment horizon Parameterized Partly Survey Discount rate Triangular No Internal forecast Share of fuel paid Parameterized Partly Survey Technologies CapEx Uniform No Manufacturers OpEx Fixed No Manufacturers Fuel reduction ME Fixed No Manufacturers Fuel reduction Aux Fixed No Manufacturers Learning rate Uniform No IEA/others External variables Fuel prices Stochastic Yes IEA/EIA/Clarkson Fleet growth Fixed Yes IHS/SAI CO2 prices Fixed Yes Internal forecast Regulatory requirements Deterministic Yes Internal forecast© Det Norske Veritas AS. All rights reserved. 19 METHODOLOGY AND ASSUMPTIONS Fleet used in the simulation model In total 48,400 ships in 2011 comprising the international trading fleet except passenger ships and ferries© Det Norske Veritas AS. All rights reserved. 10
  • 11. 27 September 2012 FINDINGS© Det Norske Veritas AS. All rights reserved. 21 FINDINGS Finding 1More than 1 in 10 new buildings in the next 8 years will be delivered with gasfuelled engines LNG price, sulphur limits and EEDI are the main drivers From 2012-2019 the LNG price is the main Share of LNG fuelled newbuildings contributing factor Scenario D When approaching 2020, EEDI and sulphur limits will create additional motivation for LNG as fuel - In Scenario D, 35% of newbuildings will be delivered with LNG engines In scenario D, we foresee about 1,000 newbuildings from 2012-2020 and some 6- 700 retrofits© Det Norske Veritas AS. All rights reserved. 22 11
  • 12. 27 September 2012 FINDINGS Finding 2In 2020, the demand for marine distillates could be as high as 200-250 milliontonnes annually A 0.1% limit in ECAs (2015) is expected to increase the demand to 45 million tonnes Fuel mix in 2020 - The current annual global demand for marine distillates is about 30 million tonnes With a global sulphur limit HFO demand may drop from 300-350 million tonnes to only 80-110 million tonnes in 2020 - Depends on the number of scrubbers in use - The use of LNG will not significantly impact the demand of other fuels - Energy efficiency measure will only slow the fuel demand in the short term© Det Norske Veritas AS. All rights reserved. 23 FINDINGS Finding 3Newbuildings in 2020 will emit up to 10 to 35% less CO2 than today’s ships.The EEDI will be a driver for more than half of this reduction Phase 0 of EEDI (2013) will encourage CO2 emission reduction on newbuildings cost-effective measures In Phase 1 (2015) and 2 (2020), up to half the reductions are motivated by EEDI alone - Due to short investment horizon and low fuel burden, these reductions are not cost effective for the ship owner EEDI reduction on newbuildings - But in the long-term these are cost-effective Small differences between scenarios - Fuel prices are already so high that any variation does not affect uptake Operational measures not included© Det Norske Veritas AS. All rights reserved. 24 12
  • 13. 27 September 2012 FINDINGS Finding 4Scrubbers are a significant option after 2020 Few ships spend more than 30% of their Ship owner investment profile time in and ECA justifying a scrubber before 2020 In 2020, with the global sulphur requirements, scrubbers become a significant solution - Scrubbers can be retrofitted and can take 25% SOx reduction options in 2020 of the market, 15-20,000 ship - Still, 70% of ships will run on distillates - In the short term LNG can only take a small part of the market Uncertainty about the 2020 limit will slow technology development and uptake© Det Norske Veritas AS. All rights reserved. 25 FINDINGS Finding 5Ballast water treatment systems will be installed on at least half ofthe world fleet The Ballast Water Management Convention has not yet entered into force, Annual expected ballast water but treatment installations - The schedule for mandatory treatment of BW is fixed (2019) - The US has decided to implement a similar scheme for all ships in US waters (2013) - Other countries have local requirements This will motivate a significant part of the world fleet to implement a treatment system irrespective of BWMC progress© Det Norske Veritas AS. All rights reserved. 26 13
  • 14. 27 September 2012 FINDINGS Finding 6At least 30-40% of newbuildings will be fitted with EGR or SCR by 2016 Both EGR and SCR are currently under development and need more time to NOx treatment installations mature LNG is an alternative but does not seem to replace more than 25% of EGR or SCR installations - Dependent on LNG price Will a ship owner will opt for a Tier III engine even if the ship is initially not planned for sailing in an ECA? - Lower second-hand value due to the loss of geographic flexibility© Det Norske Veritas AS. All rights reserved. 27 FINDINGS Sensitivity Relative fuel price differences have a significant influence on uptake on LNG fuelled vessels Regulatory requirements on EEDI and SOx in particular drives technology uptake Fuel prices, investment horizon and fuel burden are important drivers Uptake of LNG fuelled vessels Uptake of smaller engine/de-rating Scenario D+ is Scenario D with increased fuel burden and investment horizon© Det Norske Veritas AS. All rights reserved. 28 14
  • 15. 27 September 2012 FINDINGS How does this affect the ship owner?The next decade poses some important questions for the ship owner When should I install ballast water treatment systems? Future delivery capacity Should I meet sulphur regulations through of technologies and fuel investing in LNG fuelled engines or scrubbers, or by fuel switch? Do I need a NOx Tier III compliant vessel enabling global operation? Two-tier second-hand and charter market What is my cost-benefit of going beyond compliance on the EEDI?© Det Norske Veritas AS. All rights reserved. 29 FINDINGS Future delivery capacity of technologies and fuelBallast water and sulphur regulations set requirements on ships in operation In 2020 60,000 ships have to switch fuel or clean the exhaust - Are 20,000 scrubbers retrofitted between 2019 and 2020 possible? - Will there be enough low sulphur fuel available and at what price? - Will the availability uncertainty of LNG bunkering facilities slow uptake of gas fuelled engines? By 2020 30-60,000 ships will have to install a ballast water treatment system - How many ballast water systems can be retrofitted each year?© Det Norske Veritas AS. All rights reserved. 30 15
  • 16. 27 September 2012 FINDINGS Two-tier second-hand and charter marketWill there be a two-tier charter market, and which technologies would give aprice premium? Today’s ships will compete with increasingly more energy efficient ships Ships built after 2016 with a NOx Tier II compliant engine will not be able to enter an ECA Will a ship with a scrubber or LNG as fuel have a higher second-hand value? Will many ship owners build beyond today’s requirements and aim for 2020 standards?© Det Norske Veritas AS. All rights reserved. 31 BEYOND 2020© Det Norske Veritas AS. All rights reserved. 32 16
  • 17. 27 September 2012 BEYOND 2020 Future regulationsNumerous regulations can become important after 2020 GHG - High attention today, but little progress Black carbon and particulate matter - Increasing attention, but difficult to measure and control Hull bio-fouling (transport of alien species) - Guidelines developed, may results in regulations over the next 10-15 years Underwater noise - Raising concerns about possible impact on ocean-dwelling mammals, but science remains unclear© Det Norske Veritas AS. All rights reserved. 33 Safeguarding life, property and the environment www.dnv.com© Det Norske Veritas AS. All rights reserved. 34 17

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