Testing fleet strategies against an uncertain energy transition
Balancing transition risk and cost is central to developing robust fuel and technology strategies for the journey towards 2050. This year’s Maritime Forecast to 2050 outlines DNV’s framework for evaluating these trade-offs across both short- and long-term horizons and demonstrates its use through a case study of very large crude carriers.
The scenario-based framework supports the assessment of transition risk and the identification of fuel and technology pathways that balance cost and risk at fleet level. The analysis shows that fleet strategies can perform very differently depending on how the energy transition unfolds, with markedly different outcomes across the defined slow- and rapid-transition scenarios.
"The case study also highlights how the cost and risk assessment outputs can be combined into an overall strategy score for more robust decision-making,” says Øyvind Sekkesæter, Senior Consultant at DNV and lead author of this year’s Maritime Forecast report.
Updating the framework for managing energy transition risk
The case study involves an updated version of DNV’s three-step framework for integrating qualitative, non-monetary risks with financial modelling.
Step 1 defines potential fleet strategies, including outlining fuel choices, retrofits, and fleet renewal.
Step 2 defines scenarios and involves modelling regulatory timelines, fuel availability, and pricing.
Step 3 conducts robustness checks by stress-testing strategies against scenarios with respect to both risk and cost.
Case study: A VLCC fleet for renewal
The fleet consists of conventional, scrubber-fitted vessels without shore power capability: two built in 2010, one in 2015, and two in 2020. A structured fleet renewal programme replaces each vessel at 20 years of age, starting in 2030.
Defining the strategies
The case study compares two potential fleet strategies from 2026 to 2050.
Strategy A: HSHFO + scrubber (illustrated below) – here, the owner continues ordering conventional-fuel newbuilds with open-loop scrubbers to exploit cheap high sulphur heavy fuel oil (HSHFO). The existing fleet utilizes basic operational measures (hull cleaning, weather routing) without physical retrofits.
Strategy B: Phase-in of dual-fuel LNG ships – here, the owner transitions to LNG dual-fuel newbuilds designed with advanced energy efficiency (shaft generators) and shore power. In 2026, the three newest existing ships undergo retrofits. These install pre- and post-swirl energy-saving devices, variable-frequency drives on seawater pumps, and low-friction silicone hull coatings.
Two potential transition scenarios are defined for stress-testing the strategies.
Assessing costs by strategy and scenario
The cost assessment in the study signals a widening gap between the two scenarios when it comes to break-even daily rates up to 2049. Cost performance, reflecting capital, operations, fuel, and compliance expenses, determines the average break-even daily rate per ship. Both strategies start with break-even rates of approximately USD 52,000/day in 2026.
In the slow transition scenario, Strategy A remains the lower-cost choice, rising to approximately USD 61,000/day by 2049. Strategy B is penalized by the higher capital cost of dual-fuel LNG newbuilds, reaching approximately USD 67,000/day.
In the rapid transition scenario, the economic balance is reversed. Strategy A’s break-even rate soars to approximately USD 167,000/day by 2049 due to high compliance penalties and expensive low-GHG diesel. Strategy B’s break-even rate rises to a lower rate of approximately USD 144,000/day, benefiting from lower fuel consumption and cheaper low-GHG methane.
Risk assessment and scoring
The risk assessment, structured as a Hazard Identification (HAZID), maps events across a 1–3 probability and consequence scale. In the rapid transition scenario, Strategy A faces high-risk events (represented by higher scores), such as the inability to bunker sufficient low-GHG diesel, or encountering localized port bans on open-loop scrubbers. Full tables of the HAZID assessment are provided in the paper.
“To mitigate risks such as insufficient access to low-GHG diesel, shipowners can implement compliance pooling, enter into long-term fuel offtake agreements, or contractually transfer compliance liabilities to charterers,” Sekkesæter comments.
In the slow transition scenario, both strategies share similar risk scores, but Strategy B has a cost score. Under the rapid transition scenario, Strategy A performs significantly worse on both dimensions, while Strategy B proves more resilient across cost and risk metrics.
Cost and risk assessment outputs can also be combined into an overall strategy score in several ways that allow direct comparison of alternative fuel and technology pathways.
Scenario likelihoods can be weighted in the framework to reflect different views on the future. For example, if rapid transition is judged more likely than slow transition, the overall score would give more weight to the rapid scenario scores.
“The case study shows how this framework supports the structured comparison of fleet strategies and makes explicit the trade-offs between cost efficiency and exposure to transition risk. The overall score provides a relative measure of a strategy’s robustness across different transition scenarios,” Sekkesæter concludes.
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