The emerging market for LCO2 carriers - Shipbuilding and Prospects

TSELES Ioannis - Owner Editor offshoreco2.com

Liquefied carbon dioxide (LCO2) shipping is a new, rapidly growing industry that is expected to play a critical role in the global effort to reduce CO2 emissions over the next decade. While the existing fleet is still very limited, orders for new ships are increasing, with Greek shipping already having a strong presence.

How many ships are being built today?

According to the confirmed orders to date and the carbon capture and storage projects that are underway, both in Europe, Asia and the United States, the number of ships built or ordered amounts to eight ( 8) ships , with many more in the design stage. In early 2025, two (02) of a capacity of 7,500 m3 were already delivered for operation to the company Northern Lights .

Current shipbuilding projects:

• Capital Gas Ship Management (Greece): The company owned by Vangelis Marinakis is a pioneer in the sector, having ordered four state-of-the-art LCO2 carriers , each with a capacity of 22,000 cubic meters. Construction of these ships began in March 2025.

• Project Northern Lights (Norway): The pioneering European carbon capture and storage (CCS) project is expecting two more ships of 7,500 cubic meters each, with their delivery expected in 2026.

• "K" Line (Japan): The Japanese shipping giant is building a CO2 transport ship, with a capacity of 7,500 cubic meters,

• Hyundai Mipo (South Korea): The Korean shipyard is developing and testing a 4,000 cubic meter prototype ship.

It is important to note that shipyards in South Korea, China and Japan are working on designs for much larger ships, up to 70,000 m3, in anticipation of demand from new CCS- CCUS projects .

At the same time, ECOLOG , owned by Mr. P. Livanos, plans to build a fleet of 60 specialized liquefied carbon dioxide (LCO2) transport ships by 2035, as announced in May 2022. These are shallow draft, low pressure and low carbon footprint ships, with a capacity of 40,000 cubic meters, with approval in principle (A i P) from the ABS classification society.

Northern Pioneer. LCO2 carrier operating for Northern Lights. source: K Line.

Market Prospects

The prospects for shipping CO2 are extremely positive and are directly linked to the development of the Carbon Capture, Utilization and Storage ( CCS -CCUS) market. Maritime transport is considered essential for connecting industrial sites (where carbon is captured) to suitable geological formations for permanent storage, especially over long distances where pipelines are economically unviable.

Key growth factors:

1. Climate Goals: The European Union and other countries are setting ambitious targets for reducing emissions. The EU aims to create a transport network for 50 million tons of CO2 per year by 2030, with shipping initially playing a leading role.

2. CCS- CCUS Project Development : Approximately 45 commercial facilities are already operating applying carbon capture, utilization and storage ( CCS -CCUS) in industrial processes, fuel transformation and power generation. The momentum for CCUS development has increased significantly in recent years, with over 700 projects in various stages of development across the CCUS value chain worldwide, according to the International Energy Agency ( IEA ). While this momentum from the announcements is positive, it still accounts for only 40% ( and 60 %, respectively) of the approximately 1 Gt CO2 per year captured and stored in the Net Zero Emissions Scenario by 2050 .

3. Investment Interest: Major investment houses and analysts, such as DNV and Clarksons, predict a huge growth in the market. DNV similarly estimates that global carbon capture capacity will quadruple by 2030, requiring a corresponding increase in transport infrastructure. Some forecasts indicate that the fleet could reach 40 ships by 2030 and potentially hundreds by 2050 to meet climate targets.

4. Technological Maturity: The technology for liquefying, transporting and storing CO2 is constantly evolving, making the process safer and more cost-effective.

Additionally, analysts predict a rapid growth of the market by the end of the decade and specifically,

• by  2030: Estimates from various bodies, including Rystad Energy and the Oxford Institute for Energy Studies (OIES), indicate that the amount of CO2 transported annually by sea could reach 40 to 90 million tonnes . This would require a fleet of around 55 specialised ships.

• by 2050: To meet the goals of the Paris Agreement, the International Energy Agency (IEA) estimates that around 6 billion tons of CO2 would need to be captured and stored annually. If 10-20% of this amount were transported by sea, the volume could reach 600 million to 1.2 billion tons of CO2 annually, requiring a fleet of hundreds or even thousands of ships.

Despite the positive outlook, the industry also faces challenges, such as the need to create a stable regulatory framework, setting standards for charters - something that BIMCO is already working on - and ensuring the commercial viability of CCS- CCUS projects , which will depend largely on the price of carbon. As announced by the body, the first CO 2 transport charterparty is planned for the end of this year, early in 2026.

Consequently, and despite the promising prospects of the emerging sector, due to the existing challenges described (institutional framework, economic viability of projects and lack of port infrastructure), any broad short - to medium-term shipbuilding investments in CO2 transport shipping are considered as a high-risk ones. With the confirmation of the sector's upward trend in the long term, and the completion of more and more projects within a five-year horizon, an investment boom is expected.

Author: TSELES Ioannis - Owner Editor of offshoreco2.com

Msc in Information Technology

Msc in Marine Science and Technology Management