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Research and Innovation, Position Paper 05 - 2010
Assessment of measures to reduce
future CO
2
emissions from shipping
Research and
Innovation in
DNV
The objective of strategic research
is to enable long term innovation
and business growth through new
knowledge and services in support
of the overall strategy of DNV. Such
research is carried out in selected
areas that are believed to be
particularly signicant for DNV in
the future. A Position Paper from
DNV Research and Innovation
is intended to highlight ndings
from our research programmes.
This is
DNV
DNV is a global provider of services
for managing risk. Established
in 1864, DNV is an independent
foundation with the purpose of
safeguarding life, property and the
environment. DNV comprises 300
ofces in 100 countries with 9,000
employees. Our vision is making
a global impact for a safe and
sustainable future.
Contact details:
Magnus Strandmyr Eide magnus.strandmyr.eide@dnv.com
yvind Endresen oyvind.endresen@dnv.com
Summary
Limiting CO
2
emissions is a great challenge being faced by society today.
Society, through the United Nations Framework Convention on Climate
Change (UNFCCC), and actors like the EU, is applying pressure on all
industries, including the shipping industry, to reduce CO
2
emissions.
Thus, rules and regulations that safeguard the interests of society, i.e. that
limit climate change, are likely to emerge in the years ahead, resulting in
the need for implementation of effective measures. Given the range of
measures available for reducing CO
2
emissions from ships, there is a need
for a consistent and rational system for decision making and selection
of measures. This applies both to individual ship owners, and also to
policymakers and regulators.
In this paper, a comprehensive overview of the available measures is
presented, and the measures are assessed from a cost-effectiveness
perspective. A new integrated modelling approach has been used,
combining eet projections with simulated implementation of CO
2

emission reduction measures towards 2030. The resulting emission
trajectories show that stabilising eet emissions at current levels is
attainable at moderate costs, in spite of the projected eet growth up
to 2030. However, signicant reductions beyond current levels seem
difcult to achieve. If an absolute reduction in shipping emissions is
the target, a signicant boost in research, development and testing is
needed to overcome barriers, to accelerate the process of bringing novel
technologies to the market, and to nd those solutions that are yet to be
imagined. This study discusses three wild card technologies, all of which
have the potential to play some part in the future pathway to low carbon
shipping.
It is important to recognise that the reduction potential, as outlined
above, cannot be realised without a robust and effective policy instrument
that ensures that steps are taken to implement the necessary measures on
a large scale in the years ahead.
4
GLOBAL TEMPERATURE increases exceeding 2C above
pre-industrial levels are likely to result in severe global
consequences. To avoid such a development, the target
of limiting temperature increases to 2C was included
in the Copenhagen Accord emerging from the COP15
meeting in December 2009, organised by the United
Nations Framework Convention on Climate Change
(UNFCCC). In order to reach this target, it has been
estimated that global greenhouse gas (GHG) emissions in
2050 need to be 50-85 % below current levels according to
the Intergovernmental Panel on Climate Change (IPCC,
2007). However, all IPCC scenarios indicate signicant
increases in GHG emissions up to 2050. This means that
achieving the necessary reductions will be very challenging.
Shipping is responsible for approximately 3 % of global
CO
2
emissions (Buhaug et al., 2009; Endresen et al., 2008;
Dalsren et al., 2009), and future scenarios indicates that
CO
2
emissions from ships will more than double by 2050
(Buhaug et al., 2009; Endresen et al., 2008, Eyring et al.,
2005b) (Figure 1). Given the expected growth, achieving
emission reductions will be difcult. The global target of
2C will affect maritime transportation, and the extent to
which the maritime sector should be expected to reduce
emissions and how this reduction might be achieved are
the subjects of an ongoing debate. The International
Maritime Organization (IMO) is currently working to
establish GHG regulations for international shipping
(IMO, 2009), and is under pressure, from bodies such as
the EU and UNFCCC, to implement regulations that will
have a substantial impact on emissions. The major policy
instruments under consideration by IMO are technical,
operational, and market-based.
Although the outcome of the IMO process is currently
unresolved, it seems clear that within a few years CO
2

emissions from shipping will be regulated. This, along
with an expectation of high fuel prices in the long run, will
provide incentives for the shipping industry to focus on
new ways to achieve greater cost- and energy-effectiveness,
and better environmental performance (Figure 2).
Over the years, DNV has been actively involved in
developing the scientic foundation for understanding
emissions from shipping. In collaboration with leading
experts on atmospheric transport and chemistry (University
of Oslo and CICERO), DNV has investigated past, present,
and future emissions and their impacts. DNV has recently
contributed to international assessments on shipping
Introduction
Figure 1: Projected CO
2
emissions from the future eet from various
studies; Purple Buhaug et al. 2009 (high-low). Blue Endresen et
al. 2008 (high low). Green Eyring et al. 2005b (high low). Black
This study (Baseline see section 5 and 6). Note that the respective
studies have published point values, and the lines have been tted for
the purpose of this article. Also, differences in modelling approach
between studies and between the assumptions made, means that direct
comparison of the presented studies is difcult and not advisable.
5
emissions including the IMO GHG study (Buhaug et al.,
2009), the European Assessment of Transport Impacts
on Climate Change and Ozone Depletion (ATTICA)
(Eyring et al., 2010), and an OECD study on international
transport (Endresen et al., 2008). DNV has also contributed
signicantly to the scientic literature on the topic with
several peer-reviewed publications (Endresen et al., 2003;
2004; 2005; 2007; Dalsren et al., 2007; 2009; 2010; Eide et
al., 2009a; 2009b; 2010a; Longva et al., 2010). Two studies
considering Pathways to low carbon shipping have also
been published recently (DNV, 2009a; 2009b).
In this paper, an overview of the available measures for
CO
2
reduction is presented, and these measures are
assessed from a cost-effectiveness perspective. Using a
model developed by DNV, CO
2
trajectories for different
reduction cost levels are derived. Furthermore, new
technologies, wild cards, that have not yet been assessed
for costs-effectiveness are identied, and the reasons why
such technologies are still needed are described. The
results presented build primarily on Eide et al. (2010a),
but also on the Pathways studies (DNV, 2009a; 2009b), and
Eide et al. (2009b).
This position paper is divided into ten sections. Section
1 is comprised of this introduction. Section 2 presents
a mapping of available measures for CO
2
reduction in
shipping towards 2030, while Sections 3 and 4 detail a
selection of measures. In Section 5, an approach to rating
and prioritising CO
2
reduction measures from a cost-
effectiveness perspective is provided. Section 6 presents
trajectories for future CO
2
emissions from ships and
evaluates the achievable emission reduction potential
at different cost levels. Section 7 discusses limitations to
the presented results, and presents a set of wild card
technologies for further reducing emissions. Section 8
provides an overview of policy instruments for enforcing
reduction in CO
2
emissions, through the application of
the measures discussed. Section 9 discusses the challenges
of considering CO
2
in isolation, and reminds the reader
of the climate effect of other emissions. Finally Section 10
concludes, and presents recommendations.
Figure 2: Illustration of some factors that will drive technology
development in shipping.
6
A NUMBER OF MEASURES to reduce CO
2
emissions
are available to the shipping industry (see Figure 3). The
emission reduction measures can be divided into four
main categories:
Technical measures generally aim at either reducing
the power requirement to the engines or improving
fuel efciency. These measures are linked to the design
and building of ships (e.g. hull design), to optimisation
of the propulsion system, to the control and efcient
operation of the main and auxiliary engines, and to
retrots on existing ships. These measures generally
have a substantial investment cost and potentially very
signicant emission reduction effects. Many technical
measures are limited to application on new ships, due
to the difculties or high costs of retrotting existing
ships.
Alternative fuels and power sources form another
set of technical measures. The alternatives range
from supplementary measures (e.g. wind & solar) to
a complete switch of fuel (e.g. to gas, bio-diesel, or
nuclear), and generally require signicant investments
upfront, both onboard and in new infrastructure.
Operational measures relate to the way in which
the ship is maintained and operated, and include
measures such as optimised trim and ballasting, hull
and propeller cleaning, better engine maintenance,
and optimised weather routing and scheduling.
Operational measures do not require signicant
investment in hardware and equipment. The measures
generally have low investment needs and moderate
operating costs. Implementation of many of these
measures requires execution of programmes involving
changes in management and training. Many of these
measures are attractive for purely economic reasons.

Structural measures impose changes that are
characterised by two or more counterparts in shipping
working together to increase efciency and reduce
emissions by altering the way in which they interact.
Structural changes are believed to have a signicant
potential to reduce emissions beyond that which is
achievable with the above measures, but are generally
hard to develop and implement. For instance, Alvarez
et al. (2010) suggest CO
2
reduction potentials in the
order of 6-10 % from adopting tailored port berthing
policies, instead of using a rst-come, rst-served
approach.
Although not the main topic of this paper, it is noted
that measures intended for reduction of NO
x
and SO
x

emissions may interact with the CO
2
reduction measures
and sometimes limit their applicability or potential. For
instance, NO
x
reduction measures typically have a negative
effect on fuel consumption. Upcoming regulation of
NO
x
and SO
x
emissions from shipping will result in the
introduction of measures to decrease these emissions.
In the following section, some of the available solutions for
CO
2
reduction are discussed in greater detail.
Abatement technologies
7
Figure 3: Overview of CO
2
abatement measures available in shipping.
8
THE TECHNICAL MEASURES and alternative fuels
categories include measures that typically require
signicant upfront investments, but usually have a
signicant potential for emission reductions. In the
following paragraphs, natural gas, wind propulsion and
marine fuel cells are presented as examples of such
measures.
NATURAL GAS AS MAIN FUEL SOURCE
Natural gas consists mainly of methane (CH
4
), and is
naturally abundant, with rich reserves worldwide. Natural
gas as fuel produces more energy per unit of carbon
released than traditional bunker oil. Therefore, a switch
to natural gas potentially yields a reduction in the CO
2

emissions of more than 20% from a combustion engine.
However, emission of non-combusted methane (a potent
GHG) is a problem when operating outside the optimised
load-spectra. This means that the effective reduction
in CO
2
equivalent units is lower then 20%, and engine
builders are working to improve this. A switch to natural
gas also eliminates SO
x
and particulate matter emissions,
as well as signicantly reducing NO
x
emissions. In recent
years, natural gas in the form of Liqueed Natural Gas
(LNG) has been used in some smaller vessels, mainly in
Norwegian waters. At present, approximately 20 LNG-
powered ships are in operation in Norwegian waters, the
majority of which are supply ships and coastal ferries.
One major drawback to installing an engine system that
runs on natural gas is the price; at present it costs 10 20
% more than a similar diesel system. One of the main cost
drivers is the storage tank for natural gas, as pressurised or
insulated tanks are generally more expensive than diesel
oil tanks.
The standard LNG storage tanks currently used are
spherical and insulated. These occupy more space than
traditional bunker tanks, which t easily into a steel ship
structure. LNG storage requires additional space since
natural gas, both pressurised and liqueed, takes up
roughly twice the space occupied by diesel oil and various
safety constraints also have to be fullled.
Bunkering locations and infrastructure are further
concerns. With few ships currently running on natural gas,
the incentives for developing the necessary infrastructure
are limited. However, experiences from Norway show that
as ships fuelled by natural gas are built, the bunkering
infrastructure is also developed, demonstrating that when
the need arises then the suppliers will meet it. The price
difference between natural gas and diesel oil is expected
to increase in the years to come (favouring gas). This,
together with new, stricter requirements for emissions to
air, will result in natural gas becoming a more appealing
option for use by ships. The introduction is expected to
start in short sea shipping , and in emission control areas
(ECA)dened by IMO.
An emerging option is retrotting vessels to run on LNG.
By modifying the engine, auxiliary machinery, piping
networks, and tank conguration, existing vessels can be
adapted to use LNG.
WIND ASSISTED PROPULSION
Wind assisted propulsion involves using rigid or soft sails,
kites, or Flettner rotors to convert energy from the wind
to thrust forces. Of these options, kites are currently the
most advanced wind propulsion concept. Wind energy
has experienced a recent revival due to increased fuel
prices and environmental concerns. A number of different
arrangements have been tested over the years, and presently
four commercial ships have kites installed for testing.
Some forms of wind assisted propulsion, e.g. kites, can
Technical measures
& alternative fuels
9
be installed on standard ship designs and this might
lower the threshold for widespread use of wind assisted
propulsion. However, in order to optimise the effect,
it will be necessary to adapt current designs, both
technically and operationally. As the effectiveness of wind
assisted propulsion is directly linked to the prevailing
wind conditions (strength and direction), there is some
uncertainty regarding the efciency of the equipment.
Additionally, wind assisted propulsion equipment is often
relatively complicated to operate and adjust for changing
wind conditions, and therefore many ship owners may be
reluctant to install wind assisted propulsion.
Other concerns include the inuence on cargo capacity,
and problems with accessibility to ports due to the
installation of wind assisted propulsion equipment, such
as Flettner rotors and sails on masts. These installations
can potentially come into conict with bridges and cargo
handling equipment. However, new material technologies
will enable installation of designs and ideas that used to
be regarded as ction. This might lead to wind assisted
propulsion being introduced into new shipping segments.
MARINE FUEL CELLS
A fuel cell converts the chemical energy of the fuel
directly to electricity, through electrochemical reactions.
The process requires supply of a suitable fuel such as
LNG, tomorrows renewable biofuels, or hydrogen, and a
suitable oxidiser such as air (oxygen). CO
2
emissions from
fuel cells are signicantly lower than those from diesel
fuels, and there are no particulate or SO
x
emissions, and
negligble NO
x
emissions.
However, signicant barriers associated with the
commercial use of fuel cells onboard ships remain to be
overcome. At present, fuel cells must be operated in fairly
constant loads, accepting only very slow load changes,
in order to avoid overheating. Further obstacles are the
relatively high installation and maintenance costs, and
the requirement for crew expertise. Additionally, the
initial investment cost is 2-3 times higher than for that of
a comparable diesel engine. As a result of these barriers
and current size of installations, the rst marine-related
market for fuel cells is expected to be within auxiliary
power. In the longer term, fuel cells might become a part
of a hybrid powering solution for ships.
DNV has coordinated the FellowSHIP project, run in
partnership with Eidesvik and Wrtsil and supported by
the Norwegian Research Council and Innovation Norway.
This project is the rst to test large-scale marine fuel cells
onboard a merchant vessel (see Figure 4).
Figure 4: Fuel cell equipment being installed on Eidesviks Viking Lady.
10
OPERATIONAL MEASURES often amount to relatively
small changes in the operation and maintenance of the
vessel. The implementation of many of these measures
requires execution of programmes involving changes in
management and training, but also computerized decision
support tools and reliance on external information
sources.
SPEED REDUCTION
Speed reduction has been increasingly common in the
shipping market in recent years. Speed reduction or slow
steaming has yielded signicant reductions in operational
expenses, especially in the container segment. The main
principle that makes speed reduction interesting, is that
hull resistance increases exponentially with speed. Thus,
even a modest speed reduction can substantially decrease
required propulsion thrust. Less required thrust means
lower fuel consumption and reduced emissions to air.
However, speed reductions may come at a cost, when
the volume of cargo to be transported within a given
time frame (say 1 year) remains unchanged. One way of
implementing speed reduction is to decrease the speed on
all ships, which, in turn, will increase the number of ships
required to freight the same volume of cargo. Another way
is to improve efciency in port, and utilise the time saved
to decrease the speed of the ships. In the present market
conditions, the rst option is obtainable, given the decline
in world economy and the resulting availability of excess
tonnage.
Either way, a speed reduction will increase the transit time
between ports, and thus is likely to increase the total cargo
delivery time. Therefore, speed reduction is dependent
on customer acceptance and on the additional cost to the
cargo owner. The prot for the ship owner must balance
the cost for the cargo owner.
The high potential for fuel saving will make speed
reduction an interesting option for many ship owners.
Market differentiation, into high and low speed service for
some segments (e.g. container), will probably emerge. It
can be envisioned that cargo owners with high value cargo
would be willing to pay a premium for shorter transit times.
Operational measures
Figure 8: Operational measures greatly impact on emissions.
11
Most ships are optimised for a certain speed, and steaming
at lower speeds might have unforeseen consequences
in terms of engine maintenance and fuel consumption.
Future ships will probably be designed for an optimal
speed range, allowing for a wider variation in speed than
today. This will lead to both more exible engine system
solutions and better optimised hulls.
The cost of this measure is difcult to quantify, as it depends
on volatile factors, such as market conditions and fuel
prices. However, in many cases this measure has proven to
be attractive purely from an economic perspective.
ADJUSTING TRIM AND DRAFT
The trim and/or draft of a ship inuence hull resistance
and therefore the fuel consumption. In general, trim and
draft are not routinely optimised when loading a ship and
therefore the design conditions will frequently not be
achieved. By actively planning cargo loading to optimise
trim and draft, fuel savings can be made and emissions
reduced accordingly. Optimising trim and draft has been
estimated to be able to reduce fuel consumption by 0.52
% for most ship types. However, for ships that often trade
in partial load conditions (e.g. container, Ro-Ro, and
passenger), the effect can be up to 5 %. These numbers
are based on full-scale tests and on detailed calculations
performed on a number of different ships in different
trades.
Full-body ships, in which the resistance from viscous
friction is higher than wave resistance (e.g. tank and bulk),
will achieve a smaller fuel consumption reduction by
optimising trim and draft, and this will be similar for ships
with limited ballast exibility (e.g. cruise). In order to be
able to optimise trim and draft, additional equipment is
required (such as a better loading computer) and the crew
must be trained in the use of such equipment. The very
low cost of this measure makes it an appealing option,
despite the relatively low efciency gains.
WEATHER ROUTING
Weather conditions (wind and waves), together with
ocean currents, inuence the propulsion power demand
of a ship at a given speed. Therefore, it is important that
these factors are considered when planning a voyage, and
attempts should be made to minimise the negative effects.
The longer a ship voyage, the greater the route choice
exibility for avoiding adverse weather conditions. In
addition, longer voyages usually include time spent in
unsheltered waters, where the inuences from the weather
are more important. Therefore, the greatest potential
from weather routing could be realised in intercontinental
trades.
All ships have the potential for installing weather routing
systems, which will include subscriptions to observed and
forecasted data on weather, waves, and currents. Some
ship segments (e.g. large container and Ro-Ro) have
Figure 9: Avoiding adverse weather can save fuel and emissions.
12
already implemented weather routing to some extent,
and, therefore, the potential for emission reduction for
these ships is lower. This is also assumed to be the case for
new ships coming into service. Weather routing potential
has been assessed to between 05 %, depending on ship
size and type, and the typical trade of the different ship
segments.
In addition, weather routing might provide benets by
decreasing fatigue and weather damages, but these have
not been included in this study. The cost of implementing
this measure is relatively low. However, depending on the
nature of the trade, and parameters such as ship size, the
investment may not always repay itself.
The high potential for
fuel saving will make
speed reduction an
interesting option for
many ship owners.
13
THE WIDE RANGE OF SOLUTIONS available for CO
2

reduction means that comparing solutions and prioritising
among them provides a challenge, and requires a
consistent and exible methodology. One such approach
is marginal abatement cost comparison.
The marginal abatement cost of a specic measure (e.g.
weather routing) is the monetary cost of avoiding 1 tonne
of CO
2
emissions through application of that measure,
considering any other measures previously applied. It is
the cost of reducing the next unit of emission, and can
be dened by the CATCH parameter (Cost of Averting
a Tonne of CO
2
-eq Heating) [USD/tonne] as suggested
by Skjong (2009) and described by Eide et al. (2009b).
The costs of each measure (including installation and
operation) and the expected economic benets (including
fuel saving) are aggregated over the expected operational
lifetime of a vessel or measure (whichever is shortest), and
discounted to a present value. The net cost is then divided
by the expected volume of emission reduction; CATCH =
(cost-benet)/emission reduction.
Measures that achieve CATCH levels below a given
threshold are termed cost-effective. This means that they
deliver a sufciently large emission reduction relative to
their cost.
A model has been developed that can be used to assess
the marginal cost of all available measures applied to the
world eet. This model has been applied in the previous
Pathways publications from DNV (2009a; 2009b) and is
described by Eide et al. (2010a). The overall modelling
approach is to develop the world eet iteratively, by
adding and removing ships from the eet. Moderate
growth rates have been assumed, based on the current
order book and long-term trends for each ship type.
A baseline CO
2
emission level for the eet is determined
by an activity-based approach using 59 separate ship
segments to represent the eet. Then, for a given year, the
cost, benets, and potential emission reduction effect are
calculated for all available emission reduction measures for
the entire eet, thus giving the marginal abatement cost.
This is achieved by applying a comprehensive database
of emission reducing measures (including the measures
described in the previous section).

By gathering data on the measures described above, and
many more, and by applying them in the eet model
combining the eet development and the technology
development towards 2030 (Figure 7), an overview of the
reduction potential in the eet can be obtained, along
with the associated cost levels.
Cost effectiveness How to
navigate between measures?
Figure 7: Expected developments in the price and reduction effects for
CO
2
abatement measures are combined with expected eet development.
14
In Figure 8, the marginal cost shown is the average cost
for all ship segments. The curve summarizes the technical
and operational opportunities to reduce emissions from
the shipping eet sailing in 2030. The width of each bar
represents the potential of that measure to reduce CO
2

emissions from shipping, relative to the baseline scenario
for 2030. The height of each bar represents the average
marginal cost of avoiding 1 tonne of CO
2
emission through
that measure, assuming that all measures to the left are
already applied. The graph is arranged from left to right
with increasing cost per tonne CO
2
averted. Where the
bars cross the x-axis, the measures start to give a net cost
increase, instead of a net cost reduction.
The methodology, applied here for policy considerations
on a eet level, is also applicable as a tool for ship owners
when applied to smaller eets or individual vessels. It
must be stressed that, on a eet level, these values hide
signicant differences in the performance of the various
measures from one ship segment to another. Measures
that do not have low marginal costs on average may still
perform very well for certain ship segments (e.g. waste
heat recovery). Caution should thus be applied when using
these results to make statements about the effectiveness
of specic measures, or for prioritising among them.
However, when tailored to a single ship, or to a limited
eet, such gures are extremely useful to ship owners who
wish to prioritise among the potential measures for their
own ships. Specialised tools have been developed by DNV
for this specic purpose.
Figure 8: Average marginal
abatement cost per reduction
measure for the eet in 2030.
The marginal abatement cost of a
specic measure is the monetary
cost of avoiding 1 tonne of CO
2

emissions through the application
of that measure, considering any
other measures previously applied
(DNV, 2009b; Eide et al., 2010a).
15
By producing marginal cost curves (such as in the previous
section) for a sequence of years, emission trajectories can
be derived that show by how much the eet CO
2
emissions
can be reduced into the future, and the associated cost
levels. Thus, a series of snapshots for successive years, as
shown in Figure 8, can be used to produce scenarios for
future development. This links the marginal abatement
cost curves to the emissions trajectories shown in Figure 9.
Figure 9 shows the resulting cost scenarios for CO
2

emissions. The baseline is shown as the highest stippled
line, and the resulting emission levels at increasing
marginal cost thresholds are plotted below. Note that
the baseline is the same as that shown in Figure 1, and
represents the growing emission levels for the eet, under
the assumption of moderate eet growth and without
implementation of any of the reduction measures. The
bottom line illustrates the resulting emission level, provided
that all the measures analysed in this study are applied to
the eet, irrespective of cost. These results show that 19 %
of the baseline emissions in 2010 can be reduced in a cost-
effective manner. For 2020 and 2030 the corresponding
numbers are 24 % and 33 %, respectively. By increasing
the marginal costs level to USD 100/tonne results in a
reduction potential of 27 % in 2010, 35 % in 2020, and 49
% in 2030. Additionally, it is evident that further increases
in the cost level yields very little in terms of increased
emission reduction. Note that the term cost-effective
potential is used here to mean emission reduction potential
with marginal costs below zero (0). The term is relative
and is used in relation to a predened threshold, which
then will vary depending on the viewpoint of the decision
maker. For a ship owner, the threshold will naturally be
zero. For a regulator, acting on behalf of society at large,
the threshold should reect the adverse effects of these
emissions, and therefore the threshold should be higher
(e.g. USD 50/tonne as suggested by Eide et al. (2009b)).
In principle, the thresholds could be equivalent, provided
that external costs are internalised (i.e. damage costs from
global warming caused by CO
2
emissions are charged to
the polluter). Figure 9 indicates that stabilising emissions
at current levels is possible at moderate costs, thereby
compensating for the predicted eet growth. However,
signicant reductions beyond current levels seem difcult
to achieve.
By considering alternative input data to the model,
a sensitivity analysis shows that fuel price is the main
driving parameter on the cost per tonne CO
2
. The above
conclusions are based on a low fuel price estimate. As
the sensitivity analysis shows that higher fuel prices will
signicantly increase the cost-effective reduction potential,
the conclusions appear to be robust. The same analysis
shows that the results are more sensitive to changes in the
emission reduction effect of these measures, than to the
costs of the measures. Changes to the costs alone result in
only small impacts.
CO abatement cost:
How low can you go?
2
16
Figure 9: CO
2
emission scenarios for the world eet resulting from applying all emission reduction options below a given marginal cost level (CATCH) ,
USD/tonne. From Eide et al. (2010a).
17
THE PRECEDING ANALYSES show that, in absolute terms,
it will be difcult for shipping to reduce emissions below
current levels. Hence, it will be difcult to contribute to
absolute reductions and to the temperature stabilisation
target of 2C above pre-industrial levels. However,
although the current study contains more measures
than any previous study, it should be noted that not all
conceivable abatement measures have been included in
the analyses. Those measures that were included in the
current study were limited to those that were judged to be
mature (or very close to mature) at the present time, and
therefore feasible for installation onboard. The measures
omitted in the analysis of the 2030 potential include
some presently known technologies, but other solutions,
currently undiscovered, could also emerge, that may well
have a signicant impact in 20 years.
If the aim is to achieve an absolute reduction in
shipping emissions, then a signicant boost in research,
development and testing is needed to overcome barriers
and to accelerate the process of bringing novel, promising
technologies to the market, and to nd other solutions, yet
to be imagined. It is also noted that stronger eet growth
than assumed herein will exacerbate the difculty in
reducing emissions in absolute terms, such that the need
for new options becomes even more pressing (Eide et al.,
2009a).
In the following paragraphs, three wild card technologies
are presented, all of which have the potential to play some
part in the future pathway to low carbon shipping.
NUCLEAR POWERED SHIPS
Nuclear powered ships use the heat created from a
nuclear reactor to generate steam, which in turn drives
a steam turbine. The turbine can be either coupled
directly to a propeller or can generate electricity in an
electric propulsion concept. Nuclear power is an enticing
technology as, during operation, nuclear powered ships
will have no emissions to air. The rst nuclear powered
merchant ship was launched in the 1960s, and there are
currently about 150 nuclear powered ships in operation,
most of which are military vessels.
There are currently several new designs for nuclear
powered merchant ships in progress. The land-based
revival of nuclear power has led to the development of
many small reactors. These reactors are more suited in
size to merchant ships, and it is therefore predicted that
nuclear powered ships will emerge. The lengthy process
of obtaining appropriate permissions and conducting tests
means that next generation nuclear powered ships can
only become a reality by 2020-2030, at the earliest.
The main barrier for nuclear powered ships is related to
the risks from radioactive waste and the proliferation of
nuclear material. Public concerns also have the potential
to limit the number of ports at which these ships can call.
Another issue is the decommissioning and storage of
radioactive material, as well as the need for specialized
infrastructure for serving the ships. This infrastructure
is virtually nonexistent at present and would have to be
developed. Another signicant barrier is the high upfront
investment costs.
A feasibility study of nuclear powered ships conducted by
DNV indicated that, at todays fuel prices, nuclear power
is economically feasible for large container ships and bulk
carriers (DNV, 2010).
Wild cards
18
CARBON CAPTURE AND STORAGE ON SHIPS
In general, Carbon Capture and Storage (CCS) is the
process of capturing CO
2
from large point sources, such as
fossil fuel power plants, and storing it in such a way that it
does not enter the atmosphere. Storing CO
2
in geological
formations is currently considered the most promising
approach.
Today, there are several ongoing CCS pilot projects
worldwide, but a full-scale, end-to-end CCS chain does
not yet exist. There are various key challenges associated
with CCS in general. One is the cost, which is currently
very high, although expected to drop in the future as the
technology matures. Another issue is whether leakage
of stored CO
2
will compromise CCS as a climate change
mitigation option. Hence, there is a requirement to ll
knowledge gaps and to investigate the issues involved in
the development of a fully integrated CCS system.
While the main sources of CO
2
are expected to be fossil
fuel power plants and large-scale process industry, CCS
is, in principle, also applicable to smaller sources of
emissions, such as commercial ships. In order for CCS to
be a suitable technology for the maritime industry, novel
designs are needed for onboard capture and temporary
storage of CO
2
emissions for ships in transit. The ships can
then store the CO
2
until discharge into CO
2
transmission
and storage infrastructures at the next suitable port, or
to a specialised discharge facility. The CO
2
can then be
stored in a common storage reservoir shared with other
CO
2
sources.
In addition to the challenges related to CCS in general,
there are challenges that are specic to its use in maritime
applications. These include the space limitations onboard,
the marine environment, and the fact that this will be
small-scale facilities. As CCS technology is not yet mature,
implementation of such systems onboard ships remains a
possibility of the future that requires considerable further
investigation. However, the technology might be an option
for some of the larger ocean going ships.
DNV currently participates in a research consortium that
is developing and screening alternative CCS processes
in order to derive a front-end design for a CCS solution
onboard ships.
Figure 10: CO
2
capture
19
RADICAL SHIP DESIGNS
The conventional designs of the major ship types, e.g. bulk
carriers and oil tankers, have remained largely unaltered
for many years. Notable exceptions are the ever larger and
faster container ships and cruise ships, as well as special
purpose vessels serving in niche markets. There are well-
proven concepts for all these ship types, and as these have
performed well there has been little interest and incentive
for radical changes in design.
However, due to consistently high fuel costs and the
cross-industrial emphasis on environmentally friendly
technologies, this is no longer the case. The increased
focus on operational exibility in design, speed, and
cargo, energy efciency and reduction in emissions,
creates a potent driver for creating radical designs.
New technologies within drag reduction, propulsion,
and materials are entering the market, enabling novel
designs to become reality. Innovative designs replacing
conventional ballast tank systems are being developed,
and hybrid power systems are emerging. A new mix of
technological, operational, and regulatory triggers results
in an entirely new specication framework, in which
radical designs can provide satisfactory solutions.
Many shipyards have been organised for the production of
fairly standardised ships, in assembly line style production
facilities. Thus, having a new design built will almost always
be more expensive than a standard design. Radical designs
will emerge rst in the specialised ship segments, before
more traditional ship segments can follow. The X-BOW
hull design by Ulstein that emerged in the offshore supply
eet a few years ago is an example of a radical, fully
operational design with the potential to be used in other
segments as well.
With new designs comes the necessity for new construction
methods, as well as for rules and regulations. Today, these
are focused on traditional designs and methods, and
new developments are needed in order to facilitate novel
radical designs (Papanikolaou, 2009; Denmark, 2009;
DNV, 2001). The move towards a holistic, multi-objective,
and multi-constrained ship design will require greater
utilisation of computational modelling tools and formal
optimisation methods. A collective lift in the shipping
industry will be necessary in order to facilitate this process,
and the participation of some rst-mover ship owners is
critical.
In recent years DNV has explored new radical designs in
several internal projects, such as Containerships of the
Future (see picture) and Project Momentum both of
which aim at improving the energy efciency of standard
designs.
Figure 11: Radical ship concepts;
DNVs Containership of the Future.
20
OTHER IMPACTING FACTORS
The eet size, or rather the eet growth rate, has been
identied as a factor that will impact on the baseline
emissions of the eet, and hence on the achievable
emission levels. However, there are numerous other factors
with the potential to affect emission levels. Some of these
could be considered as emission reduction measures in
their own right, while others are more naturally labelled as
framework conditions. Such factors include the opening
of new sea routes, e.g. in the Arctic. The diversion of
trafc from southern routes to shorter Arctic routes has
the potential to reduce global shipping emissions (Eide et
al., 2010b). The expansion of the Panama Canal is another
example of how trafc ows may be altered by removing
physical obstructions to trade.
This is also linked to the increase in ship size due to
economy of scale. As larger vessels have less emissions per
unit of transport work, a signicant shift in size from the
current average could make a considerable contribution
to reducing emissions.
A very different factor is related to new business models
in shipping. Alvarez et al. (2010) have shown that CO
2

emissions can be reduced by adopting tailored port
berthing policies, instead of using the rst-come, rst-
served approach. Although perhaps limited in themselves,
combinations of such factors could make a substantial
contribution to reducing emissions from shipping beyond
that which has been indicated in this publication.
The diversion of trafc
from southern routes
to shorter Arctic routes
has the potential to
reduce global shipping
emissions
21
THE RESULTS OF THIS STUDY indicate that economics is
of limited effect as a driving factor for emission reduction.
The indication that there is a substantial potential for
cost-effective reduction in the present eet (see Figure
9), demonstrates that potentially protable measures
for emissions and fuel reductions are currently not fully
exploited. Thus, regulatory means are necessary to ensure
that there is full implementation of the available measures.
The lack of response to economic incentives can, to some
extent, be explained by the division between ship owners
and ship charterers. Whilst a ship owner typically pays
for the investment in a new ship, the charterer pays for
the fuel. The contract between charterer and owner will
usually result in the prot from fuel saving being gained
by the charterer, while the bill for the more expensive ship
must be met by the owner. Further studies are warranted
to investigate this issue in more detail. When designing
regulations and incentives aimed at reducing the emissions,
it is essential that the barriers to implementation (e.g.
non technical, training) are understood. Regulations
should assist in overcoming barriers, and care should be
taken to ensure that new barriers are not unintentionally
constructed by the introduction of new regulations.
The IMO is working to establish GHG regulations for
international shipping (see e.g. IMO, 2008). While the
form of regulations is still under debate, it seems clear
that some form of CO
2
regulations in shipping will be
implemented in the near future.
In the second IMO GHG study (Buhaug et al., 2009),
the most relevant policy options have been assessed with
regard to environmental effectiveness, cost-effectiveness,
incentive for technological change, and practical feasibility
of implementation. Technical policy options, operational
policy options, and market-based instruments have also
been assessed.
Specically, the technical option is limited to a mandatory
limit on the energy efciency design index (EEDI) for
new ships. The main drawbacks of this option are the
environmental effectiveness (not all ships covered) and
also the cost-effectiveness (only technical measures are
allowed). The operational policy options evaluated are
mandatory limits on the energy efciency operational
indicator (EEOI) and the adoption of a mandatory or
voluntary ship efciency management plan (SEMP). The
SEMP scores poorly on environmental effectiveness, while
the EEOI has a low rating regarding the practical feasibility
of its implementation, due to the challenges in establishing
an appropriate baseline. The market-based mechanisms
include the maritime emission trading system (METS) and
an international GHG fund sustained by a fuel levy. The
main drawback to market-based mechanisms seems to be
related to the practical feasibility of implementation, due
to the need for extensive administration.
Regardless of the regulatory mechanism, there is a need
to determine the required emission reductions from
shipping, i.e. the target level. As a rational and transparent
approach to determining such a target, Skjong (2009)
and Eide et al. (2009b) suggested using a cost-effectiveness
criterion as a link between global reduction targets and
shipping reduction targets. This approach can be pursued
regardless of regulatory mechanism. Longva et al. (2010)
provide examples of how this can be done.
Regulation of
CO emissions
2
22
While debating how the shipping industry can reduce its
CO
2
emissions, it is important to recognise that CO
2
is
not the only emission of relevance from a climate change
perspective. Other emissions from shipping, such as NO
x

and SO
x
, not only impact on health and environmental
issues, but also have an effect on the climate. While CO
2

emissions result in climate warming, emissions of sulphur
dioxide (SO
2
) cause cooling through effects on atmospheric
particles and clouds, while nitrogen oxides (NO
x
) increase
the levels of the GHG ozone (O
3
) and reduce methane
(CH
4
) levels, causing warming and cooling, respectively
(Fuglestvedt et al., 2009). The result is a net global mean
radiative forcing from the shipping sector that is strongly
negative (Eyring et al., 2010; Fuglestvedt et al., 2008),
leading to a global cooling effect today (Berntsen et al.,
2008). However, this is about to change. New regulations
on shipping emissions of SO
2
and NO
x
have been agreed
(IMO, 2009), and these will, as an unintended side-effect,
reduce the cooling effects due to emissions from the
shipping sector (Skeie et al., 2009).
Nevertheless, the warming effect of CO
2
emissions is
undisputed. Lower levels of SO
x
and NO
x
emissions
mean that future shipping emissions will have a more
pronounced warming effect on the Earths climate, adding
to the urgency of addressing this problem.
Warming or cooling
from shipping emissions?
Figure 13: Global mean temperature changes due to emissions from
shipping of CO
2
and SO
2
, and NO
x
-induced changes in O
3
, CH
4
, and
O
3
PM, and the total temperature change (T TOT). Plots show (a) the
response to a scenario with all emissions kept constant at year 2000
levels, and (b) the responses to a scenario with SO
2
emissions reduced by
90 % with all other emissions kept at year 2000 levels. From Fuglestvedt
et al. (2009).
23
CONCLUSIONS
The shipping industry is under pressure to reduce CO
2

emissions. Maritime rules and regulations that safeguard
the interests of society in this respect, i.e. that limit climate
change effects of emissions, are likely to emerge in the
years to come. As a result, individual ship owners and
operators will face pressures, both from the anticipated
environmental regulations and also from high fuel prices,
to reduce their fuel consumption and thus their CO
2

emissions. Their main concern will be to comply with
the new rules and to outperform competition. Thus,
two issues arise in parallel regarding the climate impacts
from shipping. These are: 1) technical and operational
solutions for cutting emissions on individual ships, and
2) designing appropriate regulations that safeguard the
interests of society as a whole.
The range of technologies and solutions that are available
for reducing GHG emissions from ships creates the need
for a consistent and rational system for selecting the most
appropriate measures. This applies to individual ship
owners, policymakers, and regulators. Cost-effectiveness is
one such rational system for decision making. In this study,
an overview of the available solutions has been presented,
along with tools and methods for assessing the solutions
from a cost-effectiveness perspective.
In addition, this study has assessed the cost and reduction
potential for a range of abatement measures. The model
used in the assessment captures the world eet up to
2030, and the analyses include references to 25 separate
measures. A new integrated modelling approach has been
used, that combines eet projections with activity-based
CO
2
emission modelling and projected development of
measures for CO
2
emission reduction. The world eet
projections up to 2030 are constructed using a eet growth
model that takes into account assumed ship-type specic
scrapping and building rates. A baseline trajectory for CO
2

emission is then established. The reduction potential from
the baseline trajectory and the associated marginal cost
levels are presented.
The results demonstrate that a scenario in which CO
2

emissions are reduced by 33 % from baseline in 2030 is
achievable at a marginal cost of USD zero (0) per tonne
reduced. At this cost level, emissions in 2010 can be
reduced by 19 %, and by 24 % in 2020. A scenario with 49
% reduction from baseline in 2030 can be achieved at a
marginal cost of USD 100/tonne CO
2
(27 % in 2010 and
35 % in 2020).
The results also indicate that stabilising eet emissions
at current levels can be attained at moderate costs,
compensating for the projected eet growth up to 2030.
However, signicant reductions beyond current levels seem
difcult to achieve. If an absolute reduction in shipping
emissions is the target, then a signicant boost in research,
development and testing is necessary in order to overcome
barriers and to accelerate the process of bringing novel
technologies to the market, and also to discover solutions
that are yet to be imagined. This position paper has
discussed three such wild card technologies, all of which
have the potential to play some part in the future pathway
to low carbon shipping.
In addition to developing technical and operational
measures that will enable ships to reduce emissions, work
to establish international regulation of CO
2
emissions
from shipping is also in progress. Regardless of the
regulatory mechanism selected, there is a need for rational
determination of the required emission target level. A cost-
effectiveness criterion, as a link between global reduction
Conclusions and
recommendations
24
targets and shipping reduction targets, has been suggested
for this purpose.
Finally, it is recognised that CO
2
is not the only signicant
pollutant from shipping that is of relevance from a climate
impact perspective. Whilst the warming effect of CO
2

emissions is undisputed, a reduction in the levels of SO
x

and NO
x
emissions will exacerbate the warming effect of
shipping emissions on the Earths climate, adding to the
urgency of addressing this issue.
RECOMMENDATIONS
The results of this study indicate that economics is
insufcient as a driving factor for addressing this issue,
and that change and enforcement through regulatory
means are necessary to ensure full implementation of the
measures. For designing regulations and incentives aimed
at reducing emissions, further studies are warranted
to understand the barriers to implementation (e.g.
non-technical, training). Regulations should assist in
overcoming barriers, and care should be taken to ensure
that new barriers are not unintentionally constructed by
the introduction of new regulations.
For these reductions to occur, a concerted effort from all
parties of the ship transportation value chain is necessary,
including yards, technology suppliers, owners, operators,
cargo owners, and charterers. New ways of collaborating in
the operational and commercial phase must be developed,
with clear incentives for all parties to improve operations
towards overall emission reduction (new contract types
between parties, focussed environmental management,
accurate monitoring systems, etc.).
In order to develop innovative solutions and to implement
them in a rather conservative industry such as shipping,
large-scale demonstration projects are necessary.
Development of tools and methods for assessing radical
and novel designs, along with the complex ship systems,
should be kept in focus. Improved tools for evaluating the
performance of new solutions will ease their introduction
into the shipping industry.
25
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27
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