Mitsubishi Heavy Industries Technical Review Vol. 61 No. 2 (June 2024)
1

GHG Reduction Strategy for International Shipping andRelated Solution Technology of Mitsubishi Shipbuilding

KOICHI SATO*1

In July 2023, the International Maritime Organization (IMO) extensively revised its GHG
Strategy and set the target for 2050 at net zero, strengthened from the previous target of 50%. The
IMO also made the interim target for 2030 more challenging. This report analyzes the impact of the2023 IMO Strategy on Reduction of GHG Emissions from Ships (2023 IMO GHG Strategy) anddescribes the tasks for its realization and evaluates the impact of the transition to zero emissions inship design. It is considered that the environment-related technologies being developed by
Mitsubishi Shipbuilding Corporation (hereinafter Our company) will be effective as measures tocomply with future environmental regulations, and that the use of our comprehensive shipbuilding
engineering technologies will be effective as well.

|1. Introduction
Shipping is a so-called "hard to abate" sector, i.e., its decarbonization is more difficult than othersectors. On the other hand, GHG emissions from shipping account for about 3% of total GHG emissions
and are therefore not negligible. In response to the actions of the IPCC, COP, etc., the shipping industry
has also set emission reduction targets. In international shipping, the International MaritimeOrganization (IMO) set in 2018 a target to reduce total carbon dioxide (CO2) emissions frominternational shipping to 50% of its 2008 level by 2050. In addition, at IMO’s July 2023 meeting, itadopted the 2023 GHG Strategy, which includes a target of net zero GHG emissions by around 2050.
Figure 1 shows the timeline of the reduction target. This report describes the content of the 2023 IMO
GHG Strategy, which will have a significant impact on the international shipping industry, anddiscusses its impact on shipbuilding design and the technologies required to deal with it.

Figure 1*1

Target and timeline for reducing GHG emissions from international shipping

Deputy Director, Ship & Ocean Engineering Department, Marine Engineering Center, Mitsubishi Shipbuilding Co., Ltd.

Mitsubishi Heavy Industries Technical Review Vol. 61 No. 2 (June 2024)2|2. Content of 2023 IMO GHG Strategy and its impact
The content of the IMO GHG Strategy revised in July 2023 is as follows:(1) GHG emissions from international shipping to reach net zero to peak GHG emissions
from international shipping as soon as possible and to reach net-zero GHG emissions byor around, i.e., close to, 2050, taking into account different national circumstances, whilst
pursuing efforts towards phasing them out as called for in the Vision consistent with thelong-term temperature goal set out in Article 2 of the Paris Agreement.
(2) Carbon intensity of international shipping to decline to reduce CO2 emissions pertransport work, as an average across international shipping, by at least 40% by 2030,compared to 2008; (tank-to-wake)(3) Uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources toincrease uptake of zero or near-zero GHG emission technologies, fuels and/or energy
sources to represent at least 5%, striving for 10%, of the energy used by international
shipping by 2030.
With the indicative checkpoints;- To reduce the total annual GHG emissions from international shipping by at least 20%,
striving for 30%, by 2030, compared to 2008; and- To reduce the total annual GHG emissions from international shipping by at least 70%,
striving for 80%, by 2040, compared to 2008.
At this point, there is no clear common understanding within the industry regarding the specificimpact of the above numerical targets and the means to achieve them, and now analyses and proposals
are being made by the classification societies and industry associations.
The above (2) is a reduction target for shipboard CO2 emissions per unit transportation volume,and is the same as the target as of 2018. This corresponds to the effectiveness of the regulations
currently being applied by the IMO for new and existing vessels (EEDI/EEXI) and corresponds tothe effect of the fuel efficiency rating in terms of operation, known as the Carbon Intensity Index(CII).
The above (1) and (3) are the targets that have been strengthened in 2023. These targets will
have a significant impact on future ship design, due to the inclusion of GHGs other than CO2 suchas methane (CH4) and nitrous oxide (N2O) as targets of the regulation, and the introduction of wellto-wake assessments, etc. First, we analyze the target for the most recent year, 2030. According toan analysis by Nippon Kaiji Kyokai (Class NK) (1), if only the conversion to zero-emission fuels is
considered as an additional measure to the current efforts including (2), it is estimated that the 10%
introduction set by (3) is insufficient to achieve the 20% reduction target for 2030, and that it isnecessary to replace 25% of fossil fuels with zero-emission fuels. The 25% of the total energy
consumption of international shipping is equivalent to about 110 million tons of ammonia per year,
which is about 60% of the current ammonia production for all sectors. Considering that the energy
consumption of shipping accounts for about 3% of current total energy use, it is predicted that thereplacement of more than 10% with zero-emission fuels, which is the target set in (3), is quite difficult
to achieve. The Maersk Mc-Kinney Moller Center for Zero Carbon Shipping (MMMCZCS) in
Denmark, a research institute established to promote the decarbonization of ships, has conducted asimilar analysis(2), and suggests that the replacement with zero-emission fuels may be limited to about
10% and that the target be achieved through further energy savings. Figure 2 shows an image of theMMMCZCS analysis. Even with a 10% zero-emission fuel substitution, 40 to 50 million tons ofammonia would be required annually, equivalent to 30% of the current total sector supply for marine
fuel. As for the remaining measures, namely energy saving, the baseline before reduction alreadyincorporates a considerable amount of the effects of the regulations currently being applied, andfurther energy savings will require low-speed operation and the introduction of new technologies.
Thus, there are issues in both zero-emission fuel substitution and further promotion of energy
conservation, and the image of the contribution ratio between the two in achieving the 20% reduction
target for FY2030 has not yet been determined.

Mitsubishi Heavy Industries Technical Review Vol. 61 No. 2 (June 2024)
3Figure 2 Illustration of scenario for achieving targets of 2023 IMO GHG Reduction
StrategyThis figure shows the impact of the reduction target strengthened in 2023.

As described above, the specific solution scenarios for the 2023 IMO GHG Strategy are still
being explored even for the realization of the most recent 2030 target, the IMO is also discussing
mid-term measures to achieve net-zero emissions by 2050 with a view to post 2030, and the proposed
measures, including a system to gradually strengthen the control of annual GHG emissions of ships(GFS), a charging system based on GHG emissions (Levy), and a system combining a charge forfossil fuel ships and a refund for zero-emission fuel ships (Feebate) are to be fleshed out in the future.
The 2023 IMO GHG Strategy also stipulates the agreed schedule aiming at the adoption of a concretesystem of the mid-term measures by the end of 2025 and the entry into force of the system in 2027.
Prior to this, in Europe, where decarbonization is a major concern, the target of reducing
emissions by 55% or more compared to the 1990 level by 2030 ("Fit for 55") has been set, and forshipping, the EU Emissions Trading Scheme (EU-ETS) and FuelEU Maritime will be introduced inJanuary 2024 and January 2025, respectively. The extension of the EU-ETS to the shipping sector
will require the purchase and amortization of emissions quotas equivalent to the annual GHG
emissions of ships on EU-related voyages. Any under-amortized quota will be subject to a fine of
100 euros per ton of CO2 equivalent and must be amortized in the following year. FuelEU Maritime
is a system to promote the transition to low-carbon or zero-emission fuels, in which GHG intensity
regulations for fuels and the mandatory use of shore power at anchor (for containerships andpassenger ships) will be scheduled. In the U.S., subsidies under the Inflation-Reduction Act (IRA)
may accelerate the production of zero-emission fuels. Thus, in addition to IMO regulations, regionaland national policies and regulations are expected to have a significant impact on the future ofshipping.

|3. Impact of transition to zero emissions in ship design
Candidate technologies to promote the transition to zero-emission ships include: further
operational optimization through low-speed operation, energy savings through new technologies(e.g., wind power utilization and air lubrication), fuel conversion (e.g., LNG, methanol, ammonia,biofuel and hydrogen), shipboard CO2 capture, electrification, enlargement, weight reduction, andnuclear power.
The effects of conventional technologies such as hull shape optimization, additional sternequipment, and low-friction paints are considered to have already been partly incorporated into thetransportation efficiency target (40% of the 2008 level) of IMO GHG Strategy. For further energy
savings in addition to the above, it is expected that new technologies such as wind power assistanceand friction reduction by air lubrication will be additionally applied, in addition to the reduction ofship speed. It is also important to optimize propellers in response to lower vessel speeds andadditional stern equipment for energy savings.

Mitsubishi Heavy Industries Technical Review Vol. 61 No. 2 (June 2024)
4International shipping involves long-distance, large-volume transport and there are many
challenges to electrification. Among the above, in addition to energy-saving technologies, fuelconversion, shipboard CO2 capture, and a combination of these are considered to be candidates forthe solution to said challenges.
Whether the future application of fuel conversion and shipboard CO2 capture is promoted
depends significantly on conditions such as the improvement of onshore fuel supply, fuel prices, andthe location of the bunkering base (required range of ships). In addition, carbon taxes due toregulations, subsidies, and other factors will also have a significant impact. In future ship design, it
is important to combine new zero-emissions ship technologies with conventional technologies inconsideration of these external conditions, and to evaluate and optimize the obtained design solution
based on the Total Cost of Ownership (TCO), which is the sum of capital expenditure (ship cost),
operating expenditure, and fuel cost.
Figure 3 shows an example case study of estimating and comparing the change in total costs
for a medium-sized oil tanker with the transition to zero-emission (i.e., the conversion to ammonia
fuel and the application of a shipboard CO2 capture system). The estimation results show that thetotal cost of an ammonia-fueled ship and a ship with a shipboard CO2 capture system are comparable
to that of a conventional oil-fueled ship when CO2 is charged at about 250 USD/ton. This suggeststhat strong regulations, such as carbon charges or subsidies, are necessary to promote the transition
to zero-emission. Furthermore, there is no clear preference among the means of the transition to zeroemission at this point, and the choice of means will be influenced by the development progress ofrelated technologies, the progress of the onshore supply chain, regulatory changes, and the progressof safety measures for new fuels. Therefore, it is considered that being prepared to respond to theseconditions is necessary at this time, and that accumulating general-purpose zero-emission
technologies is important.

Figure 3

Example of estimation of change in total cost due to transition to zero-emissions|4. Solution technology of Our company
As described above, the transition to zero-emission ships is greatly influenced by trends in fuelsupply and regulations, and thus it is important to develop related equipment and elementaltechnologies, and to prepare a design capability that enables responses to these trends in a versatilemanner. Necessary technologies to combine these factors and establish zero-emission ships include
the following.
(1) Elemental technologies for hull design- Hull form development technology- Arrangement design technology and structural design technology (advanced structuralanalysis technology)- Tank design technology (structural design, material development, thermal protection
design, and construction method)(2) Equipment system design technology- Gas handling technology- Propulsion plant design technology- Electrical system design technology

Mitsubishi Heavy Industries Technical Review Vol. 61 No. 2 (June 2024)
5A ship with alternative fuel requires a dual fuel (DF) engine and a related fuel gas supply
system (FGSS)(3). The development of ammonia DF engines is proceeding as planned, with the target
being for a ship to be delivered in 2026; the number of ammonia-fueled ships in service is expected
to gradually increase after 2026. Figure 4 shows a conceptual view of the design procedure to convert
conventional ships to zero-emission ships using these elemental technologies. The transition to zeroemission ships will be achieved by adding new technologies such as ammonia main engines,
ammonia handling, and onboard CO2 capture, based on general shipbuilding engineering
technologies and gas handling technologies (liquefied gas-related technologies) that have been
accumulated over the years.

Figure 4

Conceptual view of zero-emission ship design

As specific examples, Figure 5 shows the elemental technologies required for the transition tozero-emission ships and the corresponding products and services of Our company. The gas handlingtechnology, based on our long-cultivated technologies for designing and building liquefied gascarriers, is a package of zero emission-related technologies consisting of extracted core technologies
for gas carriers. The energy-saving hull form development technology, which is as important as fuelconversion, incorporates the abundant experience in hull shape development and technologies fortank testing and CFD analysis we and Mitsubishi Heavy Industries Co., Ltd Research & Innovation
Center have cultivated to enable the evaluation of hull forms and the design of propellers according
to operating conditions, such as lower speeds, and is applied to the ships we build and engineering
services we provide.
The advanced structural analysis technology contributes to securing the structural reliabilityof liquefied gas tanks on gas carriers and is indispensable for ensuring the safety of large-capacity
ammonia fuel tanks, in particular. The 3D design technology, which is a general ship designtechnology, is also an elemental technology necessary for zero-emission ships with complicatedequipment arrangements.

Figure 5

GHG reduction-related technologies of Mitsubishi ShipbuildingMitsubishi Heavy Industries Technical Review Vol. 61 No. 2 (June 2024)
6In this Technical Review Vol. 61 No. 2 (2024), the reports providing details of the gas handlingtechnology and introduction of related newbuilding ships, follow.

|5. Summary
The IMO has extensively revised its GHG Strategy and set the target for 2050 at net zero,strengthened from the previous target of 50%. Our analysis of the impact of the 2023 GHG Strategy
showed that achieving the target of international shipping requires a strong promotion of fuelconversion and further energy savings. In conjunction with the necessary development of regulatory
and the infrastructure of the onshore fuel supply, there are many uncertainties in ship design
conditions. So, general-purpose zero-emission technologies are required. We believe that ourenvironment-related technologies and comprehensive shipbuilding engineering technologies cancontribute to the zero emission of ship.
The reduction of GHG emissions is a major issue, and we promote it not only by ourselves but
also in cooperation within the Mitsubishi Heavy Industry Group and with external organizations.
Examples of the cooperation within the Group include a joint project "Project MaTIS: Marine
Technology, Integration & Solutions" with Mitsubishi Heavy Industries Marine Machinery &Equipment Co., Ltd. in addition to cooperation with the MHI Research & Innovation Center. We
participate in the Planning and Design Center for Greener Ships (GSC), a core organization that
continuously plans and disseminates cutting-edge ships for the transition to zero-emissioninternational shipping, in order to promote the commercialization of next-generation eco-friendlyships. In terms of research and development, we, as a member of the Mitsubishi Heavy Industry
Group, are participating in and contributing to the aforementioned Maersk Mc-Kinney Moller Center
for Zero Carbon Shipping as a founding partner. MODE, which is a joint industry-academia research
program for shipbuilding and shipping at the University of Tokyo, and in which we are participating,also considers the transition to zero-emission shipping to be a major issue.
We will continue developing our technologies to contribute the transition to zero-emission of
the international shipping.

References
(1)
(2)
(3)

ClassNK, Pathway to Zero-Emission in International Shipping – Understanding the 2023 IMO GHG
Strategy – (2023), https://www.classnk.or.jp/hp/en/index.html
Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, Implications of the 2023 IMO GHG Strategy
for the Shipping Industry, (2023), https://www.zerocarbonshipping.com/
Shin Ueda et al., "LNG as fuel" to "Ammonia as fuel" (Ship's fuel transition to achieve carbon neutrality)
Mitsubishi Heavy Industries Technical Review Vol. 59 No. 2 (2022)