New report identifies onboard carbon capture as a viable CO₂ emissions reduction solution for global fleet, but warns that offloading infrastructure  and regulatory certainty will determine uptake.

Onboard carbon capture and storage systems could play a significant role in helping shipping reduce CO₂ emissions, while alternative fuel supply chains continue to develop, according to a new Lloyd’s Register (LR) report.

The report, Applying Onboard Carbon Capture & Storage to Existing Ships, comes as shipowners face increasing pressure to decarbonise and reduce CO₂ emissions. Only around 4% of the near-zero GHG emission fuel production capacity needed by 2030 has reached final investment decision. Alternative fuel-capable vessel orders have also fallen from 45% of contracted tonnage in 2024 to 37% in 2025.

Against this backdrop, the report argues that much of the fleet on order or in service today will continue to rely on conventional petroleum fuels well into the 2030s. For these vessels, oCCS offers an additional route to reducing CO₂ emissions alongside alternative fuels and energy efficiency technologies.

The research finds that specific oCCS technologies have moved beyond the concept stage and are entering commercial deployment. Current full-scale installations are capturing 30-40% of CO₂ emissions, while larger pilots are targeting capture rates of around 70%.

LR’s analysis identifies oCCS as a viable retrofit for a specific fleet segment: vessels with more than ten years of trading life remaining, significant exposure to carbon pricing, access to a credible CO₂ offloading chain and sufficient onboard space for capture equipment without unacceptable commercial penalties. For these ships, the technology could help extend commercial competitiveness as environmental regulations tighten and carbon costs increase.

The report identifies three market segments as the strongest near-term candidates for oCCS deployment: MR and chemical tankers trading on EEA routes, LNG-fuelled vessels able to harness the cryogenic cold energy released during the vaporisation of LNG to cool and liquefy CO₂ captured from exhaust gases, and short-sea or feeder vessels with frequent access to EEA ports and carbon pricing exposure.

Panos Mitrou, Senior Vice President of Shipping Strategy, Lloyd’s Register said: “The reality is that much of the fleet on order or in service  today will still be operating well into the 2030s and beyond. While alternative fuels remain central to shipping’s long-term decarbonisation strategy, shipowners also need practical options for reducing CO₂ emissions from existing vessels.

“Onboard carbon capture has the potential to become an important part of shipping’s decarbonisation toolkit. For the right vessel types and trades, it offers a realistic pathway to reducing CO₂ emissions and managing carbon costs while fuel supply chains, infrastructure and regulations continue to evolve.”

While the report highlights significant opportunities, it also cautions that the technology is not a universal solution. Current oCCS systems can impose fuel consumption penalties of between 15% and 30% in many current applications and can require significant onboard space for capture equipment and CO₂ storage. Retrofit decisions must be assessed on a vessel-by-vessel basis, taking account of trading patterns, remaining asset life, carbon pricing exposure and access to CO₂ offloading infrastructure.

The main barrier to wider deployment remains the limited availability of ports and infrastructure capable of receiving captured CO₂. While major carbon storage projects are progressing in north-west Europe, including North Sea storage networks, the report identifies port reception facilities as the weakest link in the emerging carbon value chain.

The report also highlights the need for greater regulatory clarity. While EU ETS allows captured and permanently stored CO₂ to reduce compliance obligations, other frameworks, including FuelEU Maritime and future IMO regulations, are still evolving.

Looking ahead, broader deployment will depend on three key developments progressing in parallel: the outcome of FuelEU Maritime’s Article 30 review, IMO recognition of captured CO₂ within a global pricing framework, and expansion of CO₂ offloading infrastructure.

The report, which forms part of LR’s Retrofit Research Programme, was launched today at SMM in Hamburg. It is available from Lloyd’s Register at: Applying Onboard Carbon Capture and Storage to Ships | LR