Decarbonizing Ship Energy Supply

How energy system optimization enables finding lowest-cost decarbonization pathways and operating strategies

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Whether you are a ship operator, owner, builder, technology supplier, regulator, or service provider — the question of how to comply with upcoming maritime emissions regulations while keeping costs under control is rapidly becoming one of the defining challenges of the industry.

With the energy system modelling framework LEC ENERsim, different scenarios and decarbonization strategies can be quickly evaluated side by side. It allows you to set up custom energy system topologies, parametrize components with both technical parameters (e.g., efficiencies, rated powers) and economic parameters (e.g., investment costs, fuel prices), automatically optimize design and operation via an integrated linear programming model, and assess the resulting operational profiles alongside detailed emission and cost breakdowns.

Figure 1: The ENERsim user interface with a simple ship energy system topology.

Let us walk through a series of demonstration examples to see how this looks like in practice.

The Model Vessel

For this study, we define a deep-sea model vessel operating between Europe and Latin America in the year 2030 — representative of a container ship, bulk carrier, or chemical tanker. While these vessel types differ in many respects, their power configurations are often quite similar: one or two large two-stroke engines for propulsion, several auxiliary generator sets (gensets) for onboard electricity, and auxiliary boilers for heat supply.

The model vessel is characterized as follows:

• Main propulsion engine: one 50 MW two-stroke diesel engine
• Auxiliary gensets: for onboard electricity production
• Auxiliary boiler: for onboard heat supply
• Primary fuel: Very Low Sulphur Fuel Oil (VLSFO)
• Voyage: approximately 66-day roundtrip, starting with a full fuel tank

High-level assumptions are taken for efficiencies, rated powers, and economic data such as fuel costs or CO₂-costs, where average market data of the last years are used.

Baseline Results

Given time-resolved operational profiles, engine fuel consumption maps, and parametrized system data such as engine sizes, fuel costs, and regulatory parameters, ENERsim calculates the corresponding energy flows throughout the voyage:

Figure 2: Energy flow Sankey diagram for the baseline configuration.

In addition to the energy balance, ENERsim provides a complete techno-environmental-economic assessment. This aggregates fuel costs, investment costs (where applicable), operating costs, Cost of Lost Cargo (the opportunity cost of cargo space occupied by onboard energy storage), and regulatory cost terms such as CO₂ costs, FuelEUMaritime penalties, and IMO Net Zero Fund (NZF) contributions:

Figure 3: Net annual cost breakdown (left), cost distribution (centre), and annual CO₂ emissions (right) for the baseline configuration.

For this model vessel, annual costs of approximately €23.9 million are computed, primarily driven by fuel costs and CO₂-related regulatory charges. Annual CO₂-equivalent emissions amount to approximately 89.4 kt CO₂e (using default emission factors for VLSFO).

A key takeaway from the baseline: regulatory costs can already constitute a dominant factor in a vessel's overall economics — and their weight will grow significantly as compliance years advance and GHG intensity targets tighten.

Regulatory Cost Framework

The maritime industry faces a multi-layered set of greenhouse gas regulations, each applying different metrics and pricing mechanisms.

Figure 4: GHG intensity target trajectories for FuelEU Maritime (blue step line, from 2025) and the IMO Net Zero Framework draft (purple, from 2028). Solid NZF lines show officially specified target values (2028–2035); dotted lines are indicative projections to 2050. The shaded band marks the Tier 1 compliance zone.

Decarbonization Options

In the following sections, we explore three distinct decarbonization options for the model vessel and compare their impact on annual costs and emissions. Each option is evaluated using ENERsim's integrated optimizer, which simultaneously determines optimal component sizing and dispatch to minimize total annual costs — including all regulatory cost terms.

Option 1: Onshore Power Supply and Battery Storage

The most immediate intervention available is onshore power supply (OPS), which allows ships at berth to draw electricity from the local grid rather than running their auxiliary engines in port. FuelEUMaritime will mandate OPS at major EU ports for container ships and passenger vessels from 2030 onwards. Shore-side electricity from qualifying renewable or low-carbon sources counts with a GHG intensity of zero.

To complement OPS, we additionally introduce a battery storage unit (modelled without explicit power converters for simplicity). The battery can be charged from shore power during port calls and can supply onboard electricity demand at sea, reducing engine running hours.

Figure 5: System topology including onshore power supply (OPS) and battery storage.

For this scenario, the battery capacity is not fixed in advance — instead, ENERsim optimizes the size based on a linear investment cost of 400 EUR/kWh, together with operating costs and a defined component lifetime. Shore power is limited in maximum supply power and priced at a flat rate of 0.12 EUR/kWh, with zero GHG intensity (in line with FuelEUMaritime assumptions for compliant shore-side electricity). ENERsim then optimizes battery sizing and dispatch to achieve the lowest possible total annual costs.

The resulting energy flows are shown below:

Figure 6: Energy flow Sankey diagram for the OPS + battery configuration.

Both shore power and battery storage are utilized by the optimized system. As expected, their combined energy contribution remains modest relative to total voyage energy demand.

Figure 7: Net annual cost breakdown, cost distribution, and CO₂ emissions for the OPS + battery configuration.

Annual costs fall to approximately €22.1 million, and CO₂-equivalent emissions drop to approximately 83.1 kt — improvements in both dimensions compared to the baseline. ENERsim sized the battery at 50 MWh and would not have committed to this investment had it not produced a net cost reduction.

Examining the cost breakdown in detail: FuelEUMaritime and IMO NZF charges are noticeably reduced, while new cost terms emerge — battery investment, battery operating costs, and an increased Cost of Lost Cargo, as the 50 MWh battery occupies cargo space onboard.

Next step: This configuration restricts battery operation to onboard electricity supply only. A natural extension would be to introduce a hybrid powertrain using a shaft generator, or a fully electric propulsion system based on larger gensets and electric drive motors.

Option 2: Biofuel Blending

A second option is fuel switching — specifically, the introduction of biofuel (FAME, HVO) as a drop-in fuel alongside conventional VLSFO. Both fuels can be used interchangeably by the ship's engines and boiler, so no modifications to the propulsion system are required. An additional fuel tank is added to the system topology to hold the biofuel separately.

Figure 8: System topology with an additional biofuel tank.

The biofuel in this scenario is characterized by:

• GHG intensity: approximately 26 g CO₂e/MJ, representing palm oil biodiesel per FuelEUMaritime lifecycle methodology
• Fuel cost: 1,600 EUR/t (compared to 600 EUR/t for VLSFO)

ENERsim autonomously determines if, when, and how much biofuel to use — again driven solely by the objective of minimizing total annual costs:

Figure 9: Energy flow Sankey diagram for the biofuel blending configuration.

A significant share of biofuel is consumed, as shown in the Sankey diagram. Despite the higher fuel cost, the avoided regulatory penalties make blending economically attractive.

Figure 10: Net annual cost breakdown, cost distribution, and CO₂ emissions for the biofuel blending configuration.

Annual costs amount to approximately €22.6 million, with CO₂-equivalent emissions of approximately 84.7 kt. As with the OPS scenario, savings arise from avoided FuelEUMaritime penalties and reduced IMO NZF charges. The optimizer blends precisely as much buiofuel as required to meet the FuelEUMaritime GHG intensity limit for the 2030 compliance year — no more, since the higher fuel cost would otherwise outweigh further regulatory savings.

Note: This scenario assumes both fuels are available at all times. To model emission control areas (ECAs), a fuel distributor component can be configured to enforce the use of a specific fuel during designated time windows — for example, marine gas oil (MGO) within ECA zones.

Option 3: Onboard Carbon Capture and Storage (OCCS)

The most structurally complex option is onboard carbon capture and storage (OCCS), which scraps CO₂ in the ship's exhaust stream before it is released to the atmosphere and stores it as liquid CO₂ for subsequent offloading at port. This approach introduces the most significant changes to the system topology, as it requires explicit CO₂ flows to be captured, stored, and off-loaded.

Figure 11: System topology including onboard carbon capture and CO₂ storage.

The updated system incorporates:

• A CO₂ grid (exhaust gas collector) aggregating CO₂ flows from all fuel consumers — both main engines and the auxiliary boiler
• An OCCS module based on chemical absorption (e.g., monoethanolamine/MEA process), consuming onboard heat and electricity
• A liquid CO₂ (LCO₂) storage tank, sized by the optimizer and subject to a Cost of Lost Cargo term
• A CO₂ pipeline grid representing offloading to shore-side CO₂ infrastructure during port calls; sequestered CO₂ is deducted from the vessel's net GHG emissions in all regulatory calculations

Key parameters include a maximum capture efficiency of 85 % at full load and an assumed sequestration cost of 50 EUR/t CO₂.

Figure 12: Energy flow Sankey diagram for the OCCS configuration, including CO₂ mass flows.

The Sankey diagram now visualizes both energy and CO₂ mass flows simultaneously. The OCCS module is actively deployed: it draws heat — partly sourced from exhaust heat recovery — and electricity from the onboard systems, liquefies the captured CO₂, and stores it in the onboard tank for offloading at port. The relatively low additional fuel penalty in this example reflects efficient integration with available waste heat.

Figure 13: Net annual cost breakdown, cost distribution, and CO₂ emissions for the OCCS configuration.

Annual costs amount to approximately €21.1 million, with CO₂-equivalent emissions of approximately 85.3 kt. The FuelEUMaritime penalty is eliminated entirely, as the optimizer calibrates OCCS operation to achieve exactly the required GHG intensity for 2030. Additional cost terms include the Cost of Lost Cargo for the LCO₂ tank and the sequestration cost for permanent CO₂ storage — though both remain comparatively modest at the targeted capture rate.

Summary and Outlook

The three decarbonization scenarios illustrate how ENERsim enables systematic comparison of maritime decarbonization pathways under realistic regulatory and economic frameworks:

All three decarbonization options reduce total annual costs relative to the unmodified baseline — even after accounting for investment and operating costs of the added components. Savings arise primarily from avoided regulatory penalties under FuelEUMaritime and the IMO Net Zero Fund. As compliance years advance and GHG intensity targets tighten, these savings will grow in significance.

ENERsim's optimization framework makes it straightforward to combine and extend these options — for instance, a hybrid OPS + biofuel + OCCS configuration — or to perform parameter sweeps across fuel prices, CO₂ prices, compliance years, and operational profiles in order to identify robust strategies under uncertainty.

Further Technology Options

The three options demonstrated here represent only examples. ENERsim's modular component library and flexible topology make it equally well-suited to investigate a broad range of additional technologies and configurations, including:

• Renewable and low-carbon fuels (RFNBOs): green methanol, green ammonia, synthetic LNG (e-methane), or liquefied hydrogen — each with their respective fuel supply chains, storage requirements, engine compatibility, and lifecycle GHG intensities under FuelEUMaritime
• Hybrid propulsion architectures: shaft generators coupled to the main engine for flexible power-to-propulsion conversion, power take-off/take-in (PTO/PTI) configurations, or fully electric propulsion systems driven by diesel gensets
• Fuel cells: solid oxide fuel cells (SOFCs) or proton exchange membrane fuel cells (PEMFCs) as low-emission power generation units, with their specific efficiency curves and heat co-generation potential
• Onboard heat pumps: recovering low-grade waste heat from exhaust gases or sea water to reduce boiler fuel consumption
• Multi-fuel strategies: simultaneous optimization across three or more fuel options (e.g., VLSFO + MGO + biofuel + methanol) with time- and zone-dependent availability constraints
• Wind-assisted propulsion: Flettner rotors or rigid sails modelled as variable power offset on the propulsion demand profile
• Combined decarbonization pathways: full system-level optimization across any combination of the above, allowing ENERsim to identify the configuration with the lowest total annual cost under the applicable scenario