There’s more grey on the road ahead for North America before its energy and transportation sectors become considerably greener.
DNV’s Energy Transition Outlook 2025 for the continent extends the road to greener pastures by at least another five years, due in large part to policy changes in the United States and Canada.
The Make Oil Great Again (MOGA) White House, along with transportation electrification incentive reversals in Canada, have slowed renewable energy generation expansion and electric vehicle sales and extended hydrocarbons’ iron grip on transportation and other energy-intensive sectors.
Remi Eriksen, group president and CEO of the maritime industry risk-management company, optimistically maintains in his introduction to DNV’s report that “the overall long-term trend is that an energy transition is still underway in North America.”
But the motorcade leading that transition has pulled into one in a series of American roadside diners for coffee and pie.
According to DNV’s outlook, fossil fuels’ share of final energy demand, last seen hovering around 72% in 2024, won’t drop below 50% in North America until 2050.
DNV has also revised its forecast of oil’s predominance in North America’s transportation sector.
It previously predicted that oil’s 90% share of the transportation sector’s energy supply would drop to 67% in 2040; however, it has since revised that to 76%.
Reasons for DNV’s transportation electrification deceleration outlook include U.S. policy changes promoting the MOGA agenda and the overall slowdown in North American renewable energy generation, coupled with the downshift in EV uptake in Canada and the United States.
As Eriksen notes in his introduction, “The net effect of all of this is that at least five years will elapse before North America returns to the decarbonization trajectory we previously forecast.”
Transportation continues to be a tough decarbonization nut to crack; and no transportation nut is tougher than the global ocean carrier fleet.
The most recent evidence of that was the failed launch of the International Maritime Organization’s (IMO) Net Zero Framework (NZF), which member states were expected to approve during the IMO’s Extraordinary Session of the Marine Environment Protection Committee last month in London.
They opted instead to delay the NZF adoption vote to October 2026. That could postpone NZF implementation to 2030 or set it adrift permanently.
That might have been a surprise for IMO Secretary-General Arsenio Dominguez, who told an audience at DNV’s September 16 launch of its Energy Transition Outlook 2025 report that he was confident the NZF would win member states’ approval.
However, it would not have been a surprise for ocean carrier companies, who face an estimated US$1.6 trillion bill to reach the IMO’s 2050 zero-emission shipping destination.
Neither would the delay have been a surprise for shipping industry analysts.
Gisele Widdershoven, for example.
The energy transition and maritime energy analyst recently posted an in-depth digest of the challenges, costs and complexities of decarbonizing maritime shipping for Blue Water Insights.
As her analysis points out, the forced energy transformation of the global shipping industry “is not in reality a quiet revolution imposed by innovation, but by regulation.”
Among the many problems with that reality, according to Widdershoven, is that none of the new fuels touted as alternatives to the heavy marine oil that powers 95% of today’s fleet “exists on scale, none are cheap, and none have stable global infrastructure behind them.”
That is more than a multibillion-dollar problem.
The industry that moves close to 90% of all goods worldwide, she notes, “is caught between compliance and combustion,” and faces this fundamental issue: “the fuels that satisfy regulators are expensive; the fuels that satisfy accountants produce CO₂.”
So, how are pragmatic ocean carrier leaders wrestling with these issues?
During a November 19 panel discussion on the container shipping sector’s market outlooks and challenges, Rolf Habben Jansen acknowledged that the IMO NZF delay will slow shipping’s decarbonization, but the Hapag-Lloyd AG (ETR:HLAG) CEO added that “the industry will still need to decarbonize. And let’s also not forget that the biggest lever we have to decarbonize is to become more efficient.”
To that end, Habben Jansen said the new ships his company recently ordered “are going to be 30% to 40% more fuel efficient than the ships that they will replace.”
But transportation is not the only North American sector facing higher costs and other energy transition complications.
The DNV report estimates, for example, that average household energy costs over the next 10 years will increase by 22%.
As Eriksen advises, “Tackling energy affordability will not be easy.”
Or inexpensive.
But he argues that “policymakers, utilities, and energy companies can make important progress if they work together to get more out of the existing electricity system by pursuing flexibility options around storage and demand management, efficiency options like reconductoring and grid-enhancing technologies, as well as policy reforms to connect new generation projects to the grid more rapidly.”
All of which begs the question: What is more daunting, decarbonizing the world’s commercial shipping fleet or banking on policymakers, utilities, and energy companies working together on anything?
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