Emerging battery vessel fleets and synthetic fuels accelerate maritime decarbonisation

Shipping remains a cornerstone of global trade, responsible for moving about 90% of goods worldwide, but it also accounts for nearly 3% of global carbon emissions. The sector’s decarbonisation has been notoriously difficult, primarily because container ships rely heavily on cheap, energy-dense heavy fuel oil allowing them to travel long distances without refuelling. International efforts to push shipping towards net zero have faced setbacks, notably when the United States opposed cleaner fuel mandates earlier this year, complicating consensus within the International Maritime Organization (IMO). However, emerging technologies and innovative strategies may offer new pathways for reducing emissions without disrupting the industry’s critical trade functions.

A particularly promising avenue lies in the partial electrification of cargo vessels through battery technology, despite the challenges presented by the vast distances ocean-going container ships cover. Unlike short-haul ferries or harbour tugs where full electrification is feasible, large container ships cannot practically replace all fuel with batteries due to weight, cost, and energy density constraints. Recent academic research has modelled two potential roles for batteries: one involves installing large battery packs onboard ships to supplement fuel use, and the other imagines a fleet of dedicated auxiliary battery vessels that could deliver power to container ships while underway, a concept likened to a maritime “submarine hug” where power is transferred between vessels.

The onboard battery packs would be massive and expensive. For instance, equipping a large New Panamax container ship with 600 megawatt-hours of marine-grade batteries could cost close to A$150 million, storing enough energy for roughly 700 kilometres of travel, only about 24 hours of propulsion. The reliance on frequent charging at ports or in transit poses logistical issues, especially along routes with long stretches of open ocean. In contrast, the auxiliary battery vessel model offers greater flexibility and a phased approach to electrification. Battery ships could operate along high-traffic corridors powered by abundant renewable electricity, such as between Chinese ports and Singapore, before container ships revert to conventional or alternative fuels for parts of longer routes. This model relies heavily on falling battery prices, ideally below A$100 per kilowatt-hour, and the expansion of coastal renewable energy sources.

From an economic perspective, the hybrid electrification with auxiliary battery vessels could begin to be viable even at current battery costs, especially in the context of tightening carbon pricing globally. Fuel costs remain a significant operational expense for shipowners, with container vessels burning over 100 tonnes of fuel daily, and fuel prices nearly A$800 per tonne. Electricity is comparatively cheaper on a power equivalent basis. Consequently, using electric propulsion intermittently could not only reduce emissions but also increase shipping speeds by up to 50%, making electrification attractive even before full battery cost reductions.

While batteries present interesting possibilities, other fuel-based decarbonisation technologies are moving ahead rapidly. The Danish shipping giant Maersk is actively trialling novel fuel blends, such as a mix of Brazilian ethanol, methanol, and marine diesel, aiming to deploy these at scale by late 2025. Such biofuel blends could create significant new market demand, potentially doubling Brazil’s current ethanol production to supply the maritime sector. Meanwhile, Denmark has opened the world’s first commercial-scale plant producing e-methanol, a synthetic fuel generated from renewable energy and captured carbon dioxide. This development, which Maersk plans to support by refuelling its dual-fuel vessel near the plant, marks progress towards the industry’s target of net zero emissions by 2050. However, e-methanol and other synthetic fuels remain costly due to limited production scale, necessitating sustained investment and regulatory support.

Regulation is moving towards incentivising cleaner shipping fuels and penalising high emissions, although political challenges persist. The IMO has agreed on a new emissions standard with significant penalties for ships exceeding CO2 limits, starting in 2028, with escalating reductions required through 2035. Despite resistance, notably from the United States, the European Commission and the UK have welcomed these steps. The scheme is expected to generate around $40 billion in fees to support the transition towards zero-emission fuels. Yet critics warn of potential overreliance on liquefied natural gas (LNG), which while cleaner than heavy fuel oil, remains a fossil fuel with a substantial carbon footprint.

Indeed, LNG is currently the leading alternative marine fuel, supported by expanding global supply from the U.S. and Qatar and growing infrastructure in major bunkering hubs like Singapore, China, and the Netherlands. Demand for LNG-powered ships is projected to double by 2030, driven by regulatory frameworks such as the EU’s FuelEU Maritime initiative and forthcoming IMO rules. Major shipping companies are investing heavily in LNG vessels for near-term decarbonisation, although high prices may slow adoption outside regulated regions. Industry experts believe LNG will dominate until alternative fuels like methanol, ammonia, and batteries become more economically and logistically feasible.

On the retrofit front, companies like Drydocks World in Dubai are developing hybrid battery solutions targeting smaller vessels such as harbour tugs and leisure craft. These retrofits aim to reduce fuel consumption and emissions, improve reliability, and leverage shore-based renewable energy for charging. While traditionally focused on large ships, moving hybrid and electric power to smaller marine vessels represents an important sectoral step aligned with the IMO’s targets for 40% emission reductions by 2030 and 70% by 2050 relative to 2008 levels.

In summary, the complex challenge of decarbonising global shipping will require a portfolio of solutions rather than a single technology. While full battery-electric container ships crossing oceans are not economically or technically viable today, the concept of auxiliary battery vessel fleets represents an innovative compromise worthy of serious further research and development. Concurrently, the industry is advancing new low- and zero-carbon fuels, supported by emerging production facilities and regulatory frameworks. As battery costs continue to fall and carbon pricing expands, electrification alongside cleaner fuels, hybrid propulsion, and improved efficiency will together drive shipping’s progress towards a sustainable, net zero future.