Biofuel key to maritime decarbonization, but proliferation challenged by scarce supply, says DNV

DNVs latest white paper “Biofuels in shipping” finds that the flexibility of biofuels can enable the shipping industry to accelerate its journey towards decarbonization while maintaining operational efficiency. Current limitations in production capacity, however, may impact short-term supply and create stiff competition with other sectors.

With the shipping industry getting ready to meet decarbonization requirements, the use of biofuels is on the rise. The current global production capacity of sustainable biofuels is around 11 million tonnes of oil equivalent (Mtoe) per year. DNV predicts that a sustainable and economically viable supply of biofuels, ranging from 500 to 1300 Mtoe annually, can be achieved by 2050. However, to fully decarbonize shipping using biofuels, in combination with energy efficiency measures, an annual supply of 250 Mtoe of sustainable biofuels is required by 2050. This would represent 20-50% of potential global production. 

“Biofuels are poised to play a notable role in the decarbonization of shipping. Nevertheless, existing constraints on production capacity and competition from other sectors is likely to impact short-term supply to the maritime industry,” said Eirik Ovrum, Principal Consultant in DNV Environment Advisor, “A  major build-up of sustainable production capacity is needed before biofuels can reach their full potential and thus shipping’s goal of decarbonizing will need to be achieved in combination with energy efficiency measures as well as use of other low carbon fuels alternatives.”

Regulatory developments, such as The EU Emissions Trading System (EU ETS), present a strong incentive for embracing biofuels, making both biofuels and biomass highly sought after by various sectors as they strive for decarbonization. These resources are also currently being used in cooking, water and space heating, as well as timber and pulp and paper production posing some challenges to production capacity and availability.

The white paper addresses these challenges by shedding light on the potential role of biofuels in enabling the decarbonization of shipping, while also offering practical advice on the necessary preparations before integrating biofuels onboard vessels.