Economic activity is the main driver of maritime transport. DNV GL has developed a model to forecast future volumes of cargo to be transported by sea, with a focus on crude oil, petroleum products, gas, bulk and containerized freight.
The Energy Transition Outlook (ETO) model was developed by DNV GL to forecast the energy transition and its consequences in ten regions of the world on an annual basis. This approach reflects dynamics such as the growth and decline of the fossil fuel trade over the coming decades. The main influencing factors include decarbonization and electrification to stimulate the energy transition, new methods of fossil fuel production such as hydraulic fracturing, increased liquefaction of natural gas (LNG), regional changes in demand and supply of fossil fuels and geopolitical changes.
In DNV GL’s demand-driven model, energy demand depends primarily on energy efficiency, population and GDP. Major energy users such as buildings, raw materials, manufacturing and transportation are analyzed in detail.
The future energy supply will be largely influenced by the decarbonization push, aided by regional energy policies favoring certain energy sources over others. Technology and corresponding cost trends are driving down the costs of all energy sources, while resource availability constraints can drive up costs. The differences between these cost trends help determine the future mix of energy sources. The ETO model takes into account the adoption of a variety of technologies. It also examines non-energy trade relevant to ship segments such as bulk carriers and container ships.
DNV GL sees global final energy demand peak in 2033 at a level 16% higher than today, then slowly decline. The energy supply will peak at around the same time and the consumption of thermal fuels will decrease, which will have an impact on the shipping of coal and oil. Figure 1 illustrates the global forecast for primary energy supply from fossil sources.
Maritime transport needs
Trade in crude oil is determined by the differences between regional production and regional demand. On the supply side, DV GL modeled production capacity as cost-driven global competition between regions. The balance between a region’s crude oil production and refinery inputs determines either the surplus available for export or a deficit to be covered by imports. The destinations of crude oil imports by sea are based on the most recent oil tanker automatic identification system (AIS) data, adjusted for ballast movements. A similar approach has been taken for petroleum product shipments, with demand for petroleum products and refinery output being the determinants of regional trade.
To forecast maritime trade in LNG and liquefied petroleum gas (LPG), the current share of gas transported by pipelines is deducted from the total trade volume. DNV GL first determined the share of gas demand covered by the own resources of each region. Any supply shortfall is attributed to exporting regions based on their current shares as gas trading partners.
The use of coal is derived from parameters such as buildings, manufacturing and power generation. Each region’s coal supply reflects its extraction capacity, which increases as demand increases, and is constrained by locally available reserves. As in the case of natural gas, the study assumes a mix and stable shares of trading partners for coal. Domestic deficit regions import coal from surplus regions.
With respect to non-energy trade, the ETO model incorporates regional manufacturing of finished products (e.g. construction equipment, electronics, food, machinery and textiles) and the use of raw materials (e.g. chemicals, iron and steel, other metals, paper, pulp and wood) to produce them. Figure 2 shows global manufacturing demand forecast around 2050.
The iron ore trade is partly driven by the production of raw materials. The global minor bulk trade is correlated with the global production of basic materials such as metals, paper, steel and timber. The ETO study assumes that the dynamics of cereal production will follow the growth of the population and GDP per capita of existing and potential cereal importing regions. Likewise, the study defines a relationship between container trade and the global supply of manufactured goods. A similar relationship exists between manufactured goods, production and other trades, including dry cargo not counted in other categories.
Future trade will be influenced by emerging technologies, and digitization will impact trade volumes and distances. Robotization will reduce the cost of labor, making it less attractive to outsource manufacturing activities from countries with high labor costs to emerging economies. This will reduce transaction volumes, as more of the manufacturing activity takes place close to the market. Likewise, regional trade will increase and average travel distances will decrease.
Trade around 2050
DNV GL forecasts a 39% increase in maritime trade measured in tonnes over the period 2016-2030, and an increase of 2% for 2030-2050. Shipping is expected to increase in all business segments except crude oil and petroleum products, which are expected to peak around 2030.
In summary, the tonnes traded and the associated marine tonne-mile demand will both peak slightly within two to three decades. This could better be termed a plateau as the combined need for trade and ocean freight will stabilize as oil and coal trade declines, while the growth of other cargoes slows along with the deceleration in global population growth. and GDP.
The ETO study distinguishes energy commodities from other commodities. Bulk other than coal, which includes grains, iron ore and minor bulk, dominates the picture, with growth of 2.8% / year through 2030, and 0.7% / year per year. following. Growth in iron ore and the minor bulk trade will be strong during the first decades and then slow. For iron ore, this growth will decline after 2030 due to slower growth in feedstock production. The grain trade will continue to grow, although the pace of growth slows down around 2050.
The biggest consumer of oil is transportation, and demand for oil is expected to peak in the 2020s and then decline as vehicle electrification picks up. The manufacturing sector is the second largest consumer of oil. Use as a raw material will peak at the end of the 2020s. Trade in crude oil by sea will reach about 21% more than today over the next decade and will tend to decline after 2027 to around 6.5 trillion ton-miles in 2050. Trade in petroleum products will first stabilize and eventually decline.
While gas consumption will peak in 2033 according to the DNV GL model, its use in manufacturing will increase throughout the forecast period until 2050. China will become the largest importer of gas by 2021 and will remain so for the remainder of the forecast period. Europe will remain a major importer of gas, and the Indian subcontinent and sub-Saharan Africa will see their imports increase. LNG and LPG trade will continue to increase. DNV GL predicts that the share of natural gas pipeline trade between countries will decline to less than 50% by mid-century.
The trend towards containerization of goods is likely to continue. Container trade tonnage will largely mimic manufactured goods, increasing 3.4% / year through 2030, and 1.4% / year thereafter. Growth in container trade will be highest in regions with the highest growth in manufacturing output. China will dominate growth for another decade. Subsequently, the Indian subcontinent will take over as the main growth region. Asian and African regions will play a larger role as economic growth moves south and east.
Other freight and offshore shipping
As some of the other types of cargo, such as general cargo and most chemicals, move to containers, the segment will experience lower annual growth rates around 2050. A slow move east in line with growth in Asia’s share of the global economy is likely. Deep-sea shipping is expected to undergo significant changes in the decades to come. While the decline in offshore oil and gas production will reduce the need for associated shipping, this will be offset, in part, by the growth of other offshore segments such as wind power.