Marine Parallel Hybrid Propulsion Market Size, Share & COVID-19 Impact Analysis, By Ship Type (Tugs & Barge, Offshore Vessel, Fishing Vessel, Research and Survey Vessel, Search & Rescue Vessel, Patrol Boats, Passenger Ship, Recreational Boats, & Landing Crafts), By Engine Power Rating (Upto 150 HP, 150 to 500 HP, 500 HP to 1,000 HP, and 1,000 HP to 3,000 HP), By Component (IC Engine, Generator, Power Management System, Battery, Gearbox), By Installment (Line Fit & Retro Fit), By Motor Capacity (Upto 50 KW, 50 KW to 200 KW, and 200 KW to 400 KW), and Regional Forecast, 2023-2030

The global marine parallel hybrid propulsion market size was valued at USD 0.90 billion in 2022 and is projected to grow from USD 1.03 billion in 2023 to USD 2.25 billion by 2030, exhibiting a CAGR of 11.9% during the forecast period. Asia Pacific dominated the marine parallel hybrid propulsion market with a market share of 45.56% in 2022.

Parallel hybrid propulsion systems can harness both electric and combustion engines concurrently or sequentially. These systems interconnect the combustion engine and the electric motor via a gear and a PTI (Power Take In) to the propeller through the drive shaft.

Marine parallel hybrid propulsion systems operate both electric and combustion engines continuously during a vessel's operational cycle, enhancing overall efficiency. This maximizes effectiveness in operation, utilizing the combustion engine during high-speed transportation.

Various vessels, such as leisure boats, tugs, wind energy ships, and high-speed passenger ferries, incorporate marine parallel hybrid propulsion systems. These hybrids offer a multitude of advantages compared to conventional driveline propulsion systems, notably in reducing fuel consumption and emissions. The evolving regulatory landscape aimed at curbing carbon emissions within the marine industry is poised to drive the global market for marine parallel hybrid propulsion systems.

COVID-19 IMPACT

Decreased Maritime Transport and Delay in Ship Deliveries Hampered Market during COVID-19 

The pandemic caused widespread disruptions in the global supply chain, impacting the production and transportation of essential components for marine parallel hybrid propulsion systems. Lockdowns, travel restrictions, and social distancing measures affected companies, leading to delays in crucial parts and hindering the timely manufacturing of these systems. The decrease in consumer spending and economic uncertainties resulted in a sharp decline in demand for ships and boats, impacting industries such as tourism that heavily rely on marine transportation.

This reduced demand for new vessels directly affected the adoption of marine hybrid parallel propulsion systems. However, there was a noticeable increase in retrofitting existing vessels with these systems. Industries in maritime sectors recognized the importance of environmentally friendly solutions to reduce carbon footprint, potentially driving future investments in researching and developing marine parallel hybrid propulsion systems.

LATEST TRENDS

Sustainable, Green Technologies and On-Board Plug-In Systems are Prominent Trends in the Market

Sustainable and green technologies have emerged as key trends gaining traction in the market. Major providers of marine parallel hybrid propulsion systems are directing their focus toward innovative products and new technological advancements to capture market share.

For instance, in June 2022, Saft, a subsidiary of TotalEnergies, introduced Seanergy 2.0, a novel Lithium-ion (Li-ion) battery system designed for all-electric and hybrid vessels. These marine batteries offer environmentally friendly solutions at competitive prices, enabling ship operators to reduce fuel consumption, CO2 and NOx emissions, and air pollution while maintaining high performance standards.

Marine parallel hybrid propulsion systems are adaptable to various vessel types, including ferries, work boats, tugs, offshore support vessels, cruise ships, yachts, and more. Seanergy 2.0 boasts a high energy density of 130 watt-hours per liter (Wh/l), allowing for a compact design suitable for even the most confined spaces on board. Ship integrators can utilize individual modules to construct large-scale battery systems reaching up to 1,060 volts (V), equipped with power, safety, management, and communication capabilities.

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DRIVING FACTORS

Stringent Regulations from Organizations Expected to Propel the Marine Parallel Hybrid Propulsion Market

Shipowners are facing stricter environmental regulations, with three new IMO rules aimed at reducing greenhouse gas emissions and mitigating ships' ecological impacts. These regulations have been effective since January 1^st, 2023. Notably, under the CII Regulation, approximately 40% of container ships and 80% of cargo carriers are anticipated to fall short of compliance. There are varying standards to meet depending on ship classes and sizes.

Different efficiency requirements apply to smaller ships at each stage. Policies such as the Energy Efficiency Existing Ship Index (EEXI), Carbon Intensity Indicator (CII), and Ship Energy Efficiency Management Plan (Part III) are among the international and European decarbonization policies for the shipping sector.

Furthermore, slower transport offers a quicker means of reducing emissions. Shipowners may consider investing in energy-saving techniques for their vessels, allowing the adoption of alternate fuels, such as liquefied natural gas, methanol, or ammonia, alongside operational modifications. However, these changes will incur higher costs and impact insurance coverage, as well as access to new investments and capital. At present, the cost of alternate fuels is between 2 and 5 times higher than that of natural gas, rendering it uneconomical for the foreseeable future.

Increasing Maritime Trade and Offshore Activities is Projected to Boost Market Growth

The shipping industry serves as the backbone of global trade. The expected expansion of international trade is poised to drive the global market growth, as the demand for vessels increases to transport goods worldwide efficiently. The pandemic has fueled a surge in e-commerce for consumer goods shipped by containers. Even as the pandemic wanes and the global economy reopens, these trends are expected to persist. Shippers, retailers, and supply chain managers are progressively adapting operations and reassessing their logistical systems.

·         For instance, in 2021, developing countries' leading global maritime trade handling centers accounted for 55% of cargo exports and 61% of cargo imports globally. Asia stood as the primary cargo handling center, contributing to 42% of exports and 64% of imports in 2021, followed by the Americas, Europe, Oceania, and Africa.

Moreover, major transportation companies have expanded their operations, branching into air freight, last-mile delivery, and e-commerce logistics. In 2021, Maersk, the world's second-largest container line, acquired various e-commerce logistics firms, including a cloud-based startup specialized in B2C warehousing technology for the fashion industry.

RESTRAINING FACTORS

Integration Challenges May Hamper the Marine Parallel Hybrid Propulsion Market Growth

The conversion of large ships into dual-fuel engines is increasingly observed as a way for the maritime industry to achieve its decarbonization goals, particularly since biofuels currently lack scalability. Converting single-fuel engines into dual-fuel engines allows ship engines to operate using a second sustainable fuel, typically as a pilot injection alongside conventional fuels.

For retrofitting two-stroke engine ships, key requirements include electronically controlled engines and a minimum bore diameter of 50 cm. The costs associated with fuel storage and supply systems typically range from USD 5 to 15 million, varying based on the type of fuel used. Regulations stipulate that this cost cannot exceed 25% of the expense of constructing a new ship to ensure economic viability. Consequently, these factors might impede the demand for marine parallel hybrid propulsion systems during the forecast period.

SEGMENTATION

By Ship Type Analysis

Tugs & Barge Segment Dominates owing to Growing Demand for Various Towing Operations

By ship type, the market is categorized into tugs & barge, offshore vessel, fishing vessel, research and survey vessel, search and rescue vessel, patrol boats, passenger ship, recreational boats, and landing crafts.

The dominant segment is tugs & barges, attributed to their increased utilization in small rivers for towing or guiding large ships. For instance, in February 2023, a memorandum of understanding was signed between Canadian maritime architect Robert Allan Limited and Turkey's shipbuilder and owner Uzmar to develop electric tugboats.

The fastest-growing segment during the forecast period from 2023 to 2030 is estimated to be patrol boats. This growth is driven by an increased demand for maritime security, including sea patrols, border control, anti-smuggling operations, counter-terrorism efforts, piracy prevention, and safeguarding fisheries.

• In February 2023, Australia's Royal Navy took delivery of a fourth advanced Cape Class patrol boat from Austal. The Commonwealth of Australia formally approved the vessel ADV Cape Capricorn.

By Engine Power Rating Analysis

1,000 HP to 3,000 HP Segment Leads with Rising Demand for Large-sized Ships for Various Maritime Transport

By engine power rating, the market is segmented into upto 150 HP, 150 to 500 HP, 500 HP to 1,000 HP, and 1,000 HP to 3,000 HP.

The 1,000 HP to 3,000 HP segment captured the largest market share in 2022. Its growth is notably driven by the rising demand for greater power consumption in large, heavy ships handling substantial cargo.

• For instance, In September 2021, MAN Engines introduced the MAN Smart Hybrid Experience for its marine diesel engines with a power rating of up to 2000 horsepower. This system integrates a diesel engine, a clutch, and an electrical motor or generator.

The 500 HP to 1,000 HP segment is expected to experience the most rapid growth during the forecast period from 2023 to 2030. This surge is due to heightened demand within the medium-sized ship category, propelling market expansion.

• For instance, in January 2023, Purus Wind's HST Marine ordered four parallel hybrid StratCat 27 (SC27) Crew Transfer Vessels (CTVs) from Strategic Marine, a Singapore-based shipbuilder. The needs of a rapidly expanding ocean wind energy industry are very well suited to the SC27 concept developed by BMT.

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By Component Analysis

IC Engine Segment Steers Growth Due to Increasing Usage of IC Engines in the Existing Fleet of Vessels

By component, the market is categorized into IC engine, generator, power management system, battery, gearbox, and others.

The IC engine (internal combustion engine) segment dominated the market in 2022. Globally, the existing vessel fleet relies on IC engines powered by various fuels such as diesel, LNG, and Methane. The growing utilization of IC engines with environmentally friendly fuels is driving market growth.  

• For instance, in September 2020, a shipyard in Turkey started constructing an ASD tug for Denmark's port. With around 65 tons of bollard pull, it was going to be a RAmpart 3000 ASD tug named Hermes. With a bollard pull of 20 tons, it will replace an older tug named Hermes that has been operating in the port.

The battery segment is projected to be the fastest-growing from 2023 to 2030. This growth is propelled by the rising demand for electrical energy to power parallel hybrid propulsion systems.

• For instance, in March 2023, P&O Ferries was entrusted with providing the most extensive ferry service between Dover and Calais. Double-ender P&O Pioneer has electric-hybrid propulsion and was delivered by Guangzhou Shipyard International (GSI) of China and designed by OSK-ShipTech of Denmark.

By Installment Analysis

Increasing Installation of Parallel Propulsion System over Existing Fleet Propelled the Retro Fit Segmental Growth

By installment, the market is split into line fit and retro fit.

The retro fit segment was the dominant segment in 2022. The existing fleet of vessels aids in new technological advancement through retrofitting.

• For instance, in April 2019, the first PSV to be converted into an LNG hybrid retrofit in the Americas will be Harvey Energy, the first platform supply vessel to be powered by liquefied natural gas. The Wartsila 1450 kW battery hybrid system will be able to reduce vessel exhaust emissions, fuel consumption, and noise. The overall saving for fuel is expected to be between 10 % and 20 %.

The line fit segment will be the fastest-growing market during the forecast period of 2023-2030. The growth is attributed to the growing demand for newly built ships by public and private entities, bolstering market growth.

• For instance, in August 2023, BOS Power was awarded a contract to supply electric/hybrid propulsion systems for a new aquaculture construction vessel for an end customer, Norwegian marine contractor AQS. Skagen Ship Consulting was responsible for delivering the design and equipment of the 18.5m hybrid service vessel in collaboration with Macduff Ship Design.

By Motor Capacity Analysis

200 KW to 400 KW Segment Helms due to Rising Demand across Heavy Maritime Transport Ships

By motor capacity, the market is categorized into upto 50 KW, 50 KW to 200 KW, and 200 KW to 400 KW.

The 200 KW to 400 KW segment dominated the market in 2022 and is expected to be the fastest-growing segment during the forecast period. This growth is driven by the increasing demand for technological advancements in motor capacity, which have become more manageable and compatible with load-handling capacity.

• For instance, in March 2023, a U.K. consortium is set to equip the University of Bangor's research vessel, Prince Madog, with a Hydrogen Electric Hybrid Propulsion System. As part of the Tranship II project, a hydrogen storage system will be installed alongside the Madog's existing diesel engine. This will enable the ship to operate with zero emissions on short trips, such as day tours facilitated by Bangor University marine science students.

The 50 KW to 200 KW segment is projected to be the second fastest-growing segment from 2023 to 2030. The increasing demand for medium fishing vessels, large patrol boats, passenger ships, research and survey vessels, and similar applications fuels the growth.

• For instance, in October 2022, Turkey's Cemsre delivered a Norwegian fishing vessel powered by LNG. Designed by Salt Ship Design and classed by DNV, the 86.5-meter-long purse seiner/pelagic trawler is the second in the world to feature LNG-powered propulsion and a battery pack, following Cemre's claim after Libas.

REGIONAL INSIGHTS

In terms of geography, the market is categorized into North America, Europe, Asia Pacific, the Middle East, Africa, and Latin America.

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Asia Pacific region accounted for the largest marine parallel hybrid propulsion market share in 2022 and is expected to maintain the highest CAGR throughout the forecast period. The region's market growth is attributed to the surge in international trade and increased shipbuilding activities in China, India, Japan, and others. Notably, in March 2022, the Indian government approved financial assistance of USD 110.39 million for the construction of 47 vessels under the Shipbuilding Financial Assistance Policy (SBFA).

Europe held the second-largest market share in 2022 and is projected to grow steadily during the forecast period. The region's expansion is driven by stricter emission control regulations and escalating concerns regarding maritime trade, compelling Original Equipment Manufacturers (OEMs) to innovate and comply with regulatory standards.

In North America, the market is on the rise due to the growing number of maritime vessels. An important factor driving this growth is the increased focus of various original equipment manufacturers on R&D to deploy parallel hybrid propulsion systems. Moreover, in April 2022, the federal and provincial governments of Canada invested USD 3 million in adapting efficient hybrid and electric engines for fishing vessels, enabling fishermen to invest in hybrid systems at reduced costs.

The Middle East & Africa are witnessing an increasing demand for investment in the oil and gas sector, creating opportunities for growth in offshore vessels, container ships, and bulk carriers. In November 2021, Dubai launched a new patrol vessel, Ribcraft, equipped with a unique hybrid electric system provided by Transfluid and Elcome International.

Latin America is expected to experience moderate growth during the forecast period, largely driven by increased orders for marine hybrid engines in Brazil and Argentina. For instance, in November 2020, CBO, a Brazilian offshore support hybrid propulsion vessel operator, signed a contract with Wärtsilä to convert the CBO Flamengo into a hybrid propulsion vessel.

KEY INDUSTRY PLAYERS

Key Players Adopt Continuous Product Innovation and Strategic Procurement, Acquisitions, and Partnerships to Sustain Market Growth

The global market is relatively consolidated, hosting several key players such as ABB Ltd. (Switzerland), Rolls-Royce Holdings plc (U.K.), Caterpillar Inc. (U.S.), General Electric Company (U.S.), Nidec Industrial Solutions (Italy), MAN Energy Solutions (Germany), Siemens AG (Germany), and others. The primary competitive metric for companies lies in deploying a marine parallel hybrid propulsion system across various types of ships.

List of Key Companies Profiled:

• ABB Ltd. (Switzerland)


• Rolls-Royce Holdings plc (U.K.)


• Caterpillar Inc. (U.S.)


• General Electric Company (U.S.)


• Nidec Industrial Solutions (Italy)


• MAN Energy Solutions (Germany)


• Siemens AG (Germany)


• Mitsubishi Heavy Industries, Ltd. (Japan)


• Wärtsilä Oyj Abp (Finland)


• Cummins Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• July 2023: With the emergence of a number of carriers that plan to invest in Methanol dual fuel, Evergreen becomes another primary carrier. They are waiting to protect their investments in new capacity rather than commercializing the technology for other alternative fuels. Carriers are looking to use methanol as an off-the-shelf technology that can meet low emissions requirements. The total value of the contract was around USD 5 billion.


• March 2023: Cummins Inc. and Leclanche S.A. announced the signing of a Memorandum of Understanding (MOU). In accordance with the MOU signed between Leclanché and Cummins, a broad range of hybrids, battery-only, or fuel cell package solutions are available to customers in maritime applications, taking advantage of different energy sources, such as engines, hydrogen fuel cells, battery packs, and racking as well as additional components.


• October 2022: ABB and Incat Tasmania signed an agreement to design an electric ship with hybrid propulsion, which could be adapted to battery energy utilization due to the availability of shore charging. This collaboration paves the way for ABB to deliver a breakthrough zero-emissions propulsion system and power solutions. The agreement also consists of the future evaluation of the procurement of 148-meter ferries and similar vessels.


• April 2022: A total of six energy-efficient hybrid electric vessels from Chowgule and Company Pvt. Ltd. have been ordered by AtoB@C Shipping AB, the Swedish subsidiary of Finnish company ESL Shipping Ltd., for USD 86.43 million. As the global shipping industry increasingly focuses on efforts to decarbonize the sector to combat climate change, this is a groundbreaking order for the Indian shipyard.


• March 2022: Cummins announced the launch of B4.5 with a marine generator and propulsion module, extending its hybrid compatibility package to other models such as QSB6.7 and QSL9. The B4.5 engine and generator set are two of Cummins' most diminutive yet most powerful marine products, available separately or as a combination package. The B4.5 is suitable for both commercial and recreational uses without further treatment, meeting the regulations of IMO II, ST V, and ECD 2.

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The global marine parallel hybrid propulsion market research report provides a detailed industry analysis. It covers all major aspects, such as key developments, emerging trends, and competitive landscape. Moreover, the report offers insights into the global market dynamics, market share, regional analysis, Porter’s five forces analysis, and competitive landscape of various companies profiled with market competition and highlights key industry developments. In addition to the above-mentioned factors, it mainly focuses on several factors that have contributed to the growth of the global market in recent years.

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