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While the shipping industry has made a commitment to implement the International Maritime Organisation’s (IMO) ambition of reducing CO2 emissions by at least 70% by 2050, the sector is encountering obstacles in meeting this target. The capital-intensive industry is plagued by thin margins, limited technology and a high dependency on energy-dense fuels. While it already moves approximately 90% of world trade volumes, this volume is expected to almost double by 2030, making meeting these decarbonisation targets all the more important. As the global economy grows, exemplified by the expansion of trading capabilities of the Panama Canal and the Belt and Road Initiative, so too will carbon emissions from the shipping industry and therefore, pressure to accelerate decarbonisation. 

To reach this goal, commercially viable zero-emission vessels need to be introduced into the global fleet by 2030, and the fuel supply chain must be reexamined. This can only be achieved through existing coalitions and greater collaboration between the major players in the maritime industry, energy sector and governments, but are such commitments possible to reach these decarbonisation targets?

Shipping’s Complex Road Map to Decarbonisation

The shipping industry is large and ever-expanding, with shipping emissions having increased by 70% since 1990. It currently represents 2.7% of global emissions, with 85% of these emissions coming from bulk carriers, oil tankers and container ships. There are 53 732 seagoing vessels that run on highly polluting fuel with most using heavy fuel oil (HFO) or marine gas oil (MGO) which are both major sources of harmful emissions, such as nitrogen oxides (NOx), sulphur oxides (SOx), black carbon (BC) and particulate matter (PM), which cause substantial damage to human health and local ecosystems.

Some of the barriers to making the shipping industry more sustainable is that existing cleaner fuels are costly, and the feasibility of energy-efficient solutions, such as liquefied petroleum, remain limited. The industry is exploring several alternative clean fuels, including ammonia, hydrogen, methanol and biofuels, but major shipping players are concerned about not only their costs, but also their lower energy density and extensive storage needs.

Furthermore, given the 20 to 30-year lifespan of ships, those in operation today will still make up most of the global fleet in 2030. To meet the IMO decarbonisation targets, the industry will need to invest substantially in net-zero vessels. However, there remains reluctance due to a lack of clarity regarding future fuels and regulation that has exacerbated unwillingness to invest in new ships.

According to the University Maritime Advisory Services, it is estimated that for the shipping industry to meet the IMO carbon neutrality targets by 2050, the sector will need to invest at least $1.65 trillion, of which 87% will need to be dedicated to creating fuel supply infrastructure. 

Decarbonisation decision-making across the industry is complex due to the fragmentation of the global shipping fleet; 20% of the total shipping capacity is owned by 10 ship owners while the remaining 80% of the global fleet is owned by thousands of smaller ship owners, alongside different forms of company ownership. This makes it difficult to get consensus in the industry. However, this collaboration is vital to stimulate the development of viable technologies, cross-sector research and systemic change across the shipping supply chain.

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Coordination Orchestration: The Zero Carbon Research Centre

To deal with coordination efforts for the transition of shipping from ideas to action, orchestration of the industry stakeholders is vital. An example of this is the creation of a non-profit research centre, the Maersk Mc-Kinney Møller Centre in Copenhagen, Denmark, has a specific mandate to drive zero shipping emissions by stimulating greater collaboration across all segments of the shipping sector.

The centre is being guided by the shipping giant Maersk who themselves have managed to reduce their emissions by 41% relative to cargo moved by the end of 2017 with a reduction target of 60% by 2030 and carbon neutral by 2050, leading the decarbonisation agenda for the entire shipping industry.

Asides from Maersk, the centre was co-founded by several other leading global maritime industry organisations, including ABS, Cargill, MAN Energy Solutions, Mitsubishi Heavy Industries, Nippon Yusen Kaisha and Siemens Energy.

Brian Østergaard Sørensen, vice president at MAN Energy Solutions, says, “No technology or company can do this alone which is why we need to join forces across the supply chain to meet this challenge.”

The centre’s team will focus on collaboration in order to create solutions towards accelerating the development of selected decarbonising fuels, decarbonisation pathways and assist in the establishment of a legal, financial and commercial framework to drive the transformation across the entire shipping industry by working with industry, academia and authorities.

All Hands on Deck: Coordinated Industry Commitments

Much like the research centre in Copenhagen, new industry alliances are being created, such as The Net Zero Asset Owner Alliance and the Clean Cargo Working Group. However, there needs to be greater and more diverse collaborative efforts across the industry due to the complexity of the problems to reach the targets.

These stakeholders vary from across the maritime spectrum, including engine manufacturers, port authorities, ship builders and energy companies that need to share knowledge bases, define their R&D roadmaps, build on existing initiatives and develop new ideas to proactively support and utilise pilot projects necessary to mature new technologies and unlock fuel options.

While maritime organisations might compete with one another, there’s an opportunity to work together and build on the existing momentum to drive practical change towards reaching the decarbonisation objectives and create fundamental systemic change. 

Our post-industrial civilisation was founded on over a hundred years of large-scale fossil fuel exploitation. The exploding human population, combined with improvements in quality of life, has led to resource depletion and environmental pollution. We have seen temporarily lower greenhouse gas emissions this year as a result of COVID-19, but it is likely that emissions will increase beyond pre-pandemic levels in the years to come under business-as-usual scenarios. The disruption caused by the coronavirus to the global economy is, however, an invaluable opportunity for change. Deep decarbonisation offers one such way to do this.

Decarbonisation: Definition

The term ‘deep decarbonisation’ refers to the phasing out of carbon-emitting fuels in favour of more sustainable alternatives. Deep decarbonisation is more than just a temporary measure to combat the climate crisis: it is a long-term strategy that could offer us a longer lease upon this Earth. 

In 2007, the European Union committed to their 20/20/20 targets: a 20% reduction in CO2 emissions, a 20% increase in energy efficiency and a 20% increase in contribution to total energy from renewable sources by 2020. EU member states collectively increased their share of renewable energy from 8.5% to 17.5% between 2004 and 2017 and are set to attain their 2020 goal, aided by the drop in energy demand due to the coronavirus epidemic. Many states, such as Finland, Sweden, Estonia and Croatia, have already reached their 2020 target and many others are on track to reach theirs later this year.

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Meanwhile, the Deep Decarbonization Pathways Project is an international collaboration of energy researchers that focuses on sharing practical solutions for reducing GHG emissions in line with a 2°C increase limit by 2050. It comprises research teams from 16 of the biggest GHG-emitting countries including USA, China, India, Brazil, Germany and Japan. The energy sector is the worst offender when it comes to carbon emissions, being responsible for 72% of global emissions. It therefore stands to reason that deep decarbonisation in the energy sector should be a key climate goal.

Production of energy from renewable sources is rising, continually increasing its cost-effectiveness, and is already out-competing coal in terms of profitability. According to the International Renewable Energy Agency (IRENA), solar photovoltaic- and onshore wind-generated power is often cheaper to produce, and cheaper for consumers, than using fossil fuels, even without government subsidies.

There is also a veritable treasure trove of untapped potential from geothermal energy. Unlike wind and solar, geothermal energy is always available. For heating especially, geothermal is ideal as it does not need to be converted into an intermediate form of energy such as electrical. Iceland has been diverting geothermally heated water to heat pavements for over a decade, keeping them clear of ice and snow and reducing the need for salt which harms the environment. 

Conscience alone, will not be enough to mobilise the large-scale change needed to reduce emissions sufficiently; deep decarbonisation would require the creation of incentives for major contributing countries and industries. The top 5 CO2 emitting countries are China (27%), USA (15%), EU-28 (10%), India (7%) and Russia (5%), with international industries such as shipping and aviation contributing a further 1.15 billion tonnes of CO2 annually, or the same as all of South America combined. 

Simple measures such as reducing cruising speed and varnishing hulls to reduce friction could have a huge impact on reducing GHG emissions. A tax on fuel consumption for members of the International Maritime Organisation (IMO) would provide an incentive to reduce speeds and increase energy efficiency, thus decreasing GHG emissions and improving environmental conditions for marine life.

Large ships are also responsible for huge amounts of air pollution in docks throughout the Mediterranean region, causing health and environmental issues for passengers and locals alike.

Faig Abbasov, shipping policy manager for the non-profit Transport & Environment (T&E), says,T&E’s analysis of air pollution caused by luxury passenger cruise ships in European waters shows that the brands owned by Carnival Corporation emitted in 2017 in European seas alone 10 times more disease-causing sulphur dioxide than all of Europe’s 260+ million passenger vehicles.”

Dan Hubbell, shipping emissions campaign manager at Ocean Conservancy agreed, stating that “the IMO must follow the science and aim for full decarbonisation of the shipping sector by 2050 at the latest”.

Introducing a carbon tax would be an easy way to discourage and penalise the biggest emitters, regardless of whether they are net CO2 importers or exporters. Carbon tax encourages households and companies to seek lower-carbon alternatives such as green energy or biofuels, and to consume less energy in general. GHG emissions include CO2, but also methane, nitrous oxide and fluorinated gases, the latter of which is emitted by refrigerators and air-conditioning systems and trap heat 1 000 times more effectively than CO2. Some jurisdictions, such as the EU, already have legislations in place for the gradual phasing out of f-gases where possible, such as prohibiting its use in newly manufactured appliances, stricter checks and servicing procedures to prevent leakages, and restrictions on their sale within the EU.  

A barrier to the phasing out of carbon fuels is the concern that it would interfere with economic growth. However, a reduction in emissions does not necessarily coincide with economic loss; 2019 saw an increase in global GDP while maintaining the emissions levels of the previous year. According to BP statistics, 21 countries increased their GDP between 2000 and 2014, while reducing emissions. Among them, Ukraine and Slovakia decreased emissions by 29% and 22% respectively, while growing GDP by 49% and 75%.

Ways in which governments could stimulate their economies while transitioning to a cleaner and more responsible future include offering cash incentives to replace old vehicles and appliances for more energy-efficient models; expanding electricity networks to accommodate vehicles and infrastructure that run on electricity; and through government-investments in wind and solar power that would lead to the creation of new jobs down the supply chain.

The weeks following the declaration of a global state of emergency due the Covid-19 outbreak have already shown the positive potential that substantial reductions in fossil-fuel consumption could hold for the environment. Amid this humanitarian and economic crisis, the rest of life on Earth is flourishing: air pollution has cleared to reveal the Himalayas for the first time in decades; cormorants have been spotted fishing in the still waters of the Venice canals; and mountain goats are roaming the streets of Llandudno, Wales. Despite the tragic circumstances surrounding these events, perhaps this is a reminder that we can and do have an enormous impact on the quality of our environment. 

Featured image by: Daniel Parks

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