How the Maritime Industry Must Evolve for the Energy Transition

As the world transitions to clean energy, the shipping industry plays a critical yet often overlooked role in transporting critical minerals such as copper, nickel, cobalt, and lithium—essential for renewable energy technologies. But a pressing question remains: Will there be enough ships to support the energy transition?

The Energy Transition and Shipping’s Role

The global push towards renewable energy is accelerating, driven by the need to reduce reliance on fossil fuels and mitigate climate change. U.N. Secretary-General António Guterres has emphasized the urgency of ditching hydrocarbons, urging immediate action to shift towards renewable energy sources. Likewise, the International Energy Agency (IEA) predicts that oil consumption will peak by 2030, with an oil supply glut following soon after, threatening the economic viability of oil and gas companies.

However, despite these forecasts, data from the Energy Institute Statistical Review of World Energy reveals that hydrocarbon consumption is still outpacing renewable energy growth. This is partly because renewable energy projects often rely on government subsidies to compensate for lower financial returns compared to hydrocarbon investments.

Critical Minerals and the Supply Chain Challenge

The energy transition will require a massive increase in the production of critical minerals, which are vital for the development of solar panels, wind turbines, electric vehicles (EVs), and battery storage systems. According to the IEA, the demand for these minerals is set to increase fourfold to sixfold by 2040.

However, a major challenge remains: How will we build the supply chain to meet this demand? The transportation of these critical minerals will heavily depend on the maritime shipping industry. Moving minerals from mines to refineries, and eventually to manufacturers, will require an expansion of the bulk carrier fleet.

Maritime’s Growing Role in the Energy Transition

Historically, the maritime industry has focused on expanding the container vessel fleet to accommodate global trade. But with the rising demand for critical minerals, the need for dry bulk carriers—which transport raw materials—has surged.

From 2011 to 2024, the global bulk carrier fleet grew by 65%, with over 1,600 new vessels added since 2020. Yet, with the projected increase in critical mineral demand, the world may need between 2,300 to 3,500 new bulk carriers annually until 2040. This doesn't account for losses due to accidents or retirements. The current shipbuilding industry, which delivers around 400-500 bulk carriers annually, will need to scale up dramatically to meet these demands.

Challenges for Shipbuilders

Building the number of ships required for the energy transition presents significant challenges. The global shipbuilding industry—concentrated in China, South Korea, and Japan—will need to dramatically ramp up production. However, the shift to decarbonizing shipping adds complexity, as shipowners are hesitant to invest heavily in fleet expansion when the future of vessel power remains uncertain. A wrong choice in engine technology could result in significant financial losses if the ships become obsolete before their expected lifespan.

Additionally, the cost of building new ships is likely to rise as clean energy technologies for powering vessels remain more expensive than traditional bunker fuels. This could further complicate the economics of shipping and the energy transition.

Will There Be Enough Ships?

As the IEA forecasts a four- to sixfold increase in the volume of critical minerals needed for clean energy by 2040, the shipping industry must prepare for a rapid expansion. But can shipbuilders ramp up production fast enough to meet the demand? With 93% of new ships built in China, South Korea, and Japan, the shipbuilding industry will need to expand its capacity to meet the world’s growing energy needs.

Moreover, additional factors such as the distances traveled by bulk carriers, the time spent in ports loading and unloading, and the speed at which these vessels operate will all impact the number of ships required. The uncertainty surrounding the future of vessel power further complicates fleet expansion.

Conclusion

As the world works towards a clean energy future, the shipping industry will play a pivotal role in transporting the critical minerals needed for renewable technologies. While the global bulk carrier fleet will need to expand significantly, challenges such as shipbuilding capacity, decarbonization, and the economic viability of clean energy must be addressed to ensure there are enough ships to meet the rising demand.

Without a well-planned and robust shipping infrastructure, the energy transition could face significant delays, slowing down progress towards a sustainable energy future.