Sustainable Shipping Fuels to Match Fossil Fuel Costs by 2035: Wärtsilä Report

Outlined in the report titled ‘Sustainable fuels for shipping by 2050 – the 3 key elements of success’, projections indicate that fossil fuel costs are poised to more than double by 2030, ultimately converging with sustainable fuel prices by 2035. This development is deemed crucial for the global shipping industry, which, despite serving as the cornerstone of global trade, currently contributes 2% of global emissions.

Addressing the imperative for action, particularly in light of the International Maritime Organization’s (IMO) target of achieving net-zero emissions by 2050, the report underscores the role of sustainable fuels in reducing emissions. However, it highlights the pressing need for radical measures to scale up production, given the inherent challenges such as high costs and limited availability.

Wärtsilä’s analysis offers a strategic roadmap for the widespread adoption of sustainable fuels, emphasizing the importance of decisive policy implementation, industry collaboration, and individual operator initiatives.

Roger Holm, President of Wärtsilä Marine & Executive Vice President at Wärtsilä Corporation, emphasizes the significance of policy coherence, exemplified by the European initiatives, in bridging the cost gap between conventional and low-carbon fuels.

“Achieving net zero in shipping by 2050 will require all the tools in the toolbox, including sustainable fuels. As an industry, we must focus on coordinating action across policymakers, industry and individual operators to bring about the broad system change required to quickly and affordably produce a mix of sustainable fuels. Policy in Europe is showing just how impactful action at the international level can be, closing the cost gap between fossil- and low-carbon fuels for the first time.”

Key policy recommendations include setting science-based pathways for phasing out fossil fuels, adopting standardized carbon pricing mechanisms, and fostering global collaboration to scale up sustainable fuel production.

Moreover, the report underscores the importance of industry collaboration, urging stakeholders to pool buying power, engage with adjacent sectors, and establish knowledge-sharing platforms to accelerate the transition.

Individual actions are also encouraged, with potential fuel cost savings estimated to be 3-5 times higher by 2030. Holm emphasizes the role of smaller operators in driving change, advocating for swift action to improve fuel efficiency and invest in fuel flexibility.

Highlighting the financial viability of investing in fuel flexibility, Wärtsilä has been at the forefront of developing alternative fuel options. Notably, the company recently introduced the first commercially available 4-stroke engine for ammonia fuel, promising significant emission reductions compared to diesel. In essence, Wärtsilä’s analysis presents a comprehensive blueprint for closing the price gap between sustainable and fossil fuels in the maritime sector, emphasizing the urgency of collective action to achieve a sustainable future for shipping.