Rystad Energy Research: Carbon Shipping Surges as Global Demand for Emission Solutions Grows


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In a rapidly evolving landscape of climate solutions, the transportation of carbon dioxide (CO2) is making waves, quite literally, as a surge in carbon shipping emerges as a crucial component in the global fight against emissions. The driving force behind this wave is the increasing need for flexible and efficient ways to transport captured carbon to offshore storage projects. Recent research by Rystad Energy predicts a dramatic rise in the demand for carbon shipping, with a fleet of 55 carriers required by the year 2030 to meet this growing need. As part of the report, Rystad Energy forecasts that by the end of the decade, more than 90 million tonnes per annum of CO2 will be shipped globally. This staggering volume will necessitate the operation of 48 specialized terminals designed to facilitate the import and export of carbon dioxide.

The carbon capture, utilization, and storage (CCUS) market is expanding on a global scale, with numerous projects in the pipeline. However, one significant hurdle faced by these projects is the absence of comprehensive transportation and storage networks. Currently, onshore pipelines represent the dominant mode of CO2 transport, with an estimated 330 pipelines expected to be operational by 2030. These pipelines primarily serve the purpose of transporting substantial quantities of CO2 to onshore storage sites or coastal terminals. Another emerging solution is offshore pipelines, which are larger in scale and transport captured carbon to underwater storage sites, expected to play a pivotal role in the CCUS supply chain in the near future. Nevertheless, CO2 shipping remains the most flexible option for carrying carbon emissions over long distances at a relatively low cost.

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However, the environmental impact of CO2 shipping has raised concerns. The shipping industry traditionally relies on emissions-heavy conventional fuels like maritime diesel or low-sulfur fuel oil (LSFO), casting doubt on the overall sustainability of the process. While greenhouse gas (GHG) emissions for shorter shipping distances may be relatively modest, they increase significantly on longer journeys. According to the Rystad Energy research, ships traversing extended distances in 2030 could emit as much as 5% of the total CO2 they transport. Transitioning to liquified natural gas (LNG) as a shipping fuel could reduce emissions by 18% while utilizing blue methanol would result in a 20% reduction. The most significant emissions reduction would be achieved with the use of blue ammonia, potentially slashing emissions associated with the shipping process by up to 80%.

Emission calculations for marine fuels consider the entire production cycle, from upstream production to refining and end-use emissions, for a vessel with a 25,000 cubic meter capacity.

Lein Mann Bergsmark, Vice President of Supply Chain Research at Rystad Energy, commented, “Carbon dioxide shipping is a nascent market now, but it’s set to play a significant role in the global climate solution in the coming years. However, questions remain about the environmental impact of the process. In an ideal world, CO2 tankers would use renewable fuels with no associated emissions. However, these fuels are too expensive now to be economically viable.” 

The complex challenges and uncertainties inherent in the CCUS value chain often deter plant owners from exploring carbon capture opportunities. Nevertheless, promising initiatives, including the development of open-source CO2 storage infrastructure and the expansion and diversification of transportation networks, are expected to alleviate some of these constraints and simplify the implementation of CCUS projects.

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The North Sea is poised to become a focal point of the CO2 shipping surge due to its proximity to major populated areas in Northern Europe. Norway is expected to account for approximately 30% of all shipped carbon dioxide globally in 2030, with an estimated 26 million tpa, based on announced projects and memoranda of understanding (MOUs). However, the realization of this forecast hinges on the rapid development of storage sites. Following Norway, the Netherlands is expected to ship 23 million tpa, while the UK is projected to contribute about 20 million tpa of carbon shipping volumes. These totals encompass both domestically captured CO2 and imports from other countries. Notably, the UK, with substantial subsurface storage potential and ambitious CO2 storage targets, is likely to prioritize storing its emissions rather than shipping them to North Sea neighbors.

France is anticipated to ship 17 million tpa of CO2 in 2030, with Belgium following at 13 million tpa. These nations lack ample opportunities for domestic CO2 storage, making the ability to ship CO2 to neighboring European countries a critical driver for advancing CCUS developments.

The Northern Lights Project in Norway is set to be the first open-source CO2 transport and storage network, scheduled to open its doors in early 2025. The project will receive domestically shipped CO2 and volumes from northwest Europe at its onshore terminal before transporting and storing the gas beneath the seabed. Phase one of the project is designed to store up to 1.5 million tpa of CO2, paving the way for similar initiatives in the future, each with its unique features but all focused on receiving shipped CO2 for underground storage.

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Australia is poised to become a significant global player in the CO2 shipping market, with plans to ship and store CO2 from domestic projects and neighboring Asia-Pacific countries, including Japan. Although most proposed shipping routes, particularly those in Europe and around Australia, are relatively short, spanning no more than 2,500 kilometers, longer journeys are on the horizon. For instance, planned routes between Japan, Malaysia, and Australia would involve voyages of over 5,000 kilometers. The longest announced journey to date would span from South Korea to Saudi Arabia, covering a one-way distance of at least 12,000 kilometers.

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