According to the latest report by Lloyd’s Register –GLOBAL MARITIME TRENDS 2050– the triple planetary crisis, characterized by climate change such as nature, biodiversity loss, and pollution, will be the defining challenge that shapes the decades ahead.
In particular, the report which is authored by ECONOMIST IMPACT is part of a new joint multi-year Global Maritime Trends program between Lloyd’s Register and Lloyd’s Register Foundation. It highlights:
- Some of the world’s largest ports are becoming unusable due to sea level rises.
- The IPCC estimates that sea levels are expected to rise by 0.29m to 0.51m by 2100 in a business-as-usual scenario.
- The report shows that a 40cm rise by 2050 could possibly render the ports of Houston (US), Shanghai (China), and Lázaro Cárdenas (Mexico) unusable.
- African nations becoming dominant sources of labour supply to the industry.
- The IMF has forecasted that Africa will have the world’s youngest median age by 2050, at just 25.
- While other regions face increasingly ageing populations, Africa will buck the trend. For shipping, this means that new recruits may increasingly come from African countries, potentially supplanting traditional strongholds in Asia.
- Women making up 25% of seafaring workforce by 2050 due to technological advancements. In 2021, women accounted for less than 2% of the global seafaring workforce according to BIMCO/ICS Seafarer Workforce Report.
- By 2030 McKinsey estimates the developing world excluding China may account for 35% of global consumption, led by India, Indonesia, Thailand, Malaysia, and the Philippines.
- More than half of the projected increases in global population up to 2050 will concentrate in Asia and Africa.
- A technology-driven energy transition could see this rapidly increase by mid-century.
- By 2050, the need for more tech-savvy ship managers could enable more women to take on managing positions on land and at sea, as increasingly autonomous ships and systems call for oversight and monitoring rather than intensive manual labour.
The report further analyzed 4 “what if” future scenarios for the maritime sector in 2050, based on the speed of technology adoption and the level of global collaboration, to help the industry forecast risks, opportunities, and required investment.
Nick Brown, CEO of Lloyd’s Register, said the report and the wider program which will help benchmark some of the findings, represented an excellent opportunity to prepare for change and take action. He commented that other industries are much better at forecasting. The financial sector, for example, has a deep understanding of potential future scenarios and how to prepare for them, but shipping lags behind.
“Shipping is deeply intertwined with geopolitical and macroeconomic challenges. Ships deliver 80% of the world’s trade and disruptions are felt acutely across the globe. Amidst global supply chain uncertainties, the urgent need to decarbonize, the integration of new technologies, the concerns about human rights, safety at sea, and the future of labour supplies, it is crucial that those in the shipping industry do everything in their power to anticipate, mitigate, and overcome these challenges without causing harm elsewhere.”
Ruth Boumphrey, CEO, Lloyd’s Register Foundation
Lloyd’s Register
“From tackling the energy transition to sourcing the next generation of seafarers, we’ve allowed uncertainty to delay action for too long. Now we’ve created a way for the industry to get a much better idea of the future. It’s time for them to get on board.”
Nick Brown, CEO, Lloyd’s Register
#1 GEOPOLITICAL and MACROECONOMIC TRENDS
Growing populations across Asia and Africa: More than half of the projected increases in global population numbers up to 2050 will be concentrated in Asia and Africa across 8 countries, according to the UN. These include the Democratic Republic of the Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines, and Tanzania, making them home to the world’s largest labor pools, and the world’s future seafarers.
Deglobalization and fragmentation are more entrenched: As the emerging trends become more entrenched, 2050 will be characterized by deglobalization and fragmentation, which places greater emphasis on regional links, near- and friend-shoring, economic blocs for regional free trade, and protectionist policies for sensitive, strategic sectors.
The dominance of Asian economies: The coming decades will show dominance of Asian economies, driven by population, new resource demands, and technological innovations. Estimates suggest that, in 2050, Asian countries, namely India, Indonesia, South Korea and Japan, will make up half of the world’s top ten economies. In 2022, they accounted for 3 of the 10. This trend will be accompanied by de-dollarization. As economic and political influence of Asian economies increase, maritime trade in the region will continue to expand. As of 2021, Asian economies accounted for 43% of maritime exports and 64% of imports, and 4 of the top 5 countries supplying seafarers were in Asia, with the Philippines holding the top spot.
The regionalization or localization of conflicts: Remaining conflicts are likely to be concentrated within regions as global wars become more costly. According to a 2012 statistical model developed by University of Oslo, the countries facing internal armed conflicts will decline from 15% in 2009 to 7% in 2050.
Security-first spending, strategies and policies: Persistent geopolitical tensions and new technologies will heighten the importance of energy security, defense, maritime security, health and food security. Cybersecurity will become an increasingly important concern for infrastructure and sensitive consumer and government data. Block-chain technology will later become the rescue system for efficiency and traceability.
#2 ENVIRONMENTAL TRENDS
Mainstream use of climate technology and carbon removal solutions: Climate technologies, including carbon removal solutions, will become a mainstream and necessary component in net zero scenarios for 2050. The maritime sector will increasingly see the use of nature-based solutions including blue carbon sources such as mangroves, tidal marshes and seagrass meadows—all of which have the capacity to capture and store C02 from the atmosphere at a rate of two to four times faster than terrestrial ecosystems.
A chronic shortfall in environmental financing: Debates on environmental finance (green and climate finance) will continue through 2050, as it is unlikely that discussions on the volume, direction, and pace of finance will be resolved. The Poseidon Principles was launched in 2019 and developed by global banks and shipping industry players. its principles can provide a framework to integrate climate issues into lending decisions for the maritime industry.
Standardized environmental reporting and disclosure norms: Environmental reporting will be standardized. It will become a requirement for businesses and governments to monitor, collect, assess, and disclose regular, comparable data on a number of environmental challenges across sectors
Adapting to impacts of climate change and biodiversity loss: Societies will ramp up efforts to adapt to and manage the real impacts of climate change and biodiversity loss through increased investments, the development of new technologies, and migration of people and economic activities. The impacts of climate change and biodiversity loss will result in a new wave of climate migrants fleeing increasingly uninhabitable areas: the World Bank estimates 216 million people across 6 world regions will have to move within their countries by 2050.
#3 NATURAL RESOURCE TRENDS
The widespread deployment of food technology and the primacy of alternative proteins: Food technology will come in different forms, and will be deployed as more resource-efficient solutions are required to meet demand for nutritious and sustainable food. At sea, 85% of global fish stocks are over-exploited, depleted, or recovering from exploitation.
Dominance of renewable energy: Renewable energy will become the dominant source of energy as pressures to decarbonize mount, investments continue to increase, and technologies advance. Between now and 2050 the IEA expects wind and solar capacity to grow 4 to 5 times faster than any other source of energy. Offshore wind is now one of the fastest growing energy technologies, and floating wind power may soon follow suit. Last year saw 50 floating offshore wind turbines commissioned, and global stock is set to exceed 5 GW by 2030 and 25 GW by 2035. The decades beyond will see the growth of other sources of ocean-based renewable energy, such as wave and tidal energy, which are in mature phases of development.
The use of alternative fuel sources gains momentum: Outside of renewables, growing demand for cleaner and more sustainable energy sources will lead to the use of hydrogen, methanol, ammonia, biomass, or nuclear fusion. Green ammonia and methanol are already in the development phase. Maersk, a shipping and logistics company, has plans to develop Europe’s first green ammonia facility by 2026, expecting the first large methanol-powered ships to be ready by 2024, and small ammonia vessels by 2026. Some countries are already laying the foundations for hydrogen as a potential transport fuel.
The battle for critical minerals and resources: Growing demand for renewable energy and new sensor- or chip-based technologies will increase the economic and geopolitical influence of countries that house minerals, rare earth sand large sources of renewable energy. The growth of renewable energy will also see critical minerals—such as lithium, nickel, cobalt, manganese and graphite—become the basis of economic growth, geopolitical competition and strategic trade alliances.
Lloyds Register’s report on the Maritime Decarbonization Hub highlights that e-ammonia might become the most widely used marine fuel among hydrogen-based fuels, while liquefied bio-methane is expected to lead among biofuels. The maritime sector prepares to decarbonize its activities and supply chains, while navigating an increasingly uncertain geopolitical, economic, and social landscape.
In the coming 3 decades, low-lying countries in Asia like Vietnam, Indonesia, the Philippines, and Thailand will be severely impacted, putting an estimated 300 million people at risk of floods in 2050. Humanity is forced to adapt to this planetary and climate crisis.
Exclusive economic zone boundaries may become more contentious because of rising sea levels, and large numbers of coastal communities will inevitably be forced to relocate as their lands become uninhabitable.
Download the full report: Global Maritime Trends.