Net Zero Industry Tracker 2024

CapitalSHIPPING The shipping industry will need substantial capital investment to advance the production of ZEFs and development of a ZEF-compatible shipping fleet, with an estimated requirement of $2.6 trillion.198 This comes to an additional annual capital investment of around $91 billion, which is more than double the existing annual CapEx of $44 billion199 in the shipping sector. The majority of this additional investment must come from the ecosystem (and not only shipping companies) to build the enabling infrastructure. Shipping decarbonization requires a scale-up of clean hydrogen, CCUS and bunkering infrastructure. The shipping sector needs to invest in retrofitting the existing fleet with dual-fuel engines to support the use of low-emission fuels and ZEFs. It is projected that out of the total additional investment required, about $2 trillion200 is expected to go towards ZEF production infrastructure (the majority of which will be for setting up of clean hydrogen capacity) followed by bunkering and CCUS capacity. Retrofitting the existing fleet with dual-fuel engines will require approximately $0.6 trillion of the total additional investment, based on the average cost of retrofitting being between $5 million and $15 million per ship.201 The shipping industry’s return on invested capital (ROIC) is at 13%202 and its WACC is at 8.4%.203 This narrow margin means that without additional support from external factors (such as technological advancements, policy incentives and industry collaboration), the industry may struggle to afford and implement the significant changes needed for effective decarbonization. Investments required by the sector and enabled by the ecosystem FIGURE 34 Enabled by the ecosystem (around 78% of total investments)Investments by the sector (around 22% of investments)$2.6 trillion required in investment by 2050 Adopt battery-electric ships using PEM fuel cells Zero-emission fuels Low-emission fuels Propulsion technologiesAdopt new ZEFs (ammonia, methanol) Partner with fuel providers to deliver ZEFs Adopt low-emission transition fuels (LNG, biofuels) Partner with fuel providers to deliver transition fuels Develop new ZEF-compatible vessels Develop dual-fuel engines to retrofit existing shipping fleetDevelop clean hydrogen production capacity Expand production of ZEFs (ammonia, methanol) Expand production of low-emission transition fuels (LNG, biofuels) Develop bunkering infrastructure for ZEFs Develop battery charging stations at ports Source: Accenture analysis based on data from S&P and DNV. Net-Zero Industry Tracker: 2024 Edition 60