Is Green Shipping the New Gold?

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There are some positive signs but slashing shipping emissions requires much more innovation, carbon taxation and political will, says an article published on china dialogue ocean website. 

Challenges 

When the coronavirus pandemic struck in early 2020, international shipping was dealt a harsh blow. The container shipping industry was left scrambling as businesses around the world were forced to close, causing major supply chain issues.

Then quickly they were dealing with another challenge: unprecedented global demand for goods. Prices for container shipping have skyrocketed in response to rising demand and supply chain bottlenecks. 

The stranding of a huge container ship in the Suez canal in March this year also drove up shipping costs, said Diane Gilpin, CEO of the Smart Green Shipping Alliance, which develops technological solutions to help the shipping industry decarbonise.

Cleaning up shipping

There is an urgent need for the shipping industry to clean up its act. Ships emit around one billion tonnes of greenhouse gases every year, or 3% of global emissions. 

According to the World Economic Forum, if shipping were a country it would be the sixth largest polluter in the world. Without further action, shipping emissions are expected to reach 90-130% of their 2008 levels by 2050.

The shipping debate has “languished” since the Kyoto Protocol in 1997, which set targets for countries to reduce their carbon emissions, said Tristan Smith, an expert in shipping and energy at University College London’s Energy Institute.

Shipping emissions were excluded from the Paris Agreement in 2015 because they are difficult to allocate to individual countries. This leaves regulating shipping emissions in the hands of the International Maritime Organization (IMO), the UN body responsible for shipping.

Stalling shipping negotiations

Under pressure from small island states threatened by rising sea levels, the IMO set a goal in 2018 of bringing emissions down by at least 50% by 2050, compared to 2008 levels.

But since then campaigners have accused the organisation of kicking the can down the road with ineffectual short-term measures. At the latest IMO meeting in June, member states agreed to reduce carbon intensity from ships by 2% every year between 2023 and 2026.

Bryan Comer, senior marine researcher at the International Council on Clean Transportation (ICCT), said the measure “doesn’t bend the emissions curve” and is equivalent to business as usual. 

According to ICCT analysis, a 6–7% annual reduction in carbon intensity is needed to be compatible with a 1.5C global warming limit.

The pandemic also hindered negotiations and temporarily slowed down decision-making. “We lost eight months of progress,” said Comer.

At the June meeting, Pacific Island nations, which are particularly threatened by rising seas and other climate impacts, called for a carbon price of $100 per tonne on bunker fuels. 

Emerging economies, such as South Africa and India, opposed the measure, while EU countries have called for carbon pricing in some form but did not endorse the Pacific Islands’ proposal.

Meanwhile, the International Chamber of Shipping, which represents shipowners, has put forward a proposal for a tax of $2 per tonne of bunker fuel, which works out at just $0.7 per tonne of CO2 emitted. The tax would be used to fund research and development projects worth $5 billion over the next decade.

Maersk has called for a levy of $150 per tonne of CO2 to help the industry shift away from fossil fuels.

Green technology

Slashing shipping emissions requires new technology, vessels and fuels. Replacing fossil fuels with hydrogen, which does not produce any carbon dioxide or sulfur oxides when burned, is one of the most promising solutions.

“International shipping needs hydrogen fuels. They have scalable production, no shortage of renewable electricity capacity [to produce them] and are cost competitive. But we are a couple of years away from the technology being available,” said Smith.

The sustainability push within capital markets that drove the vehicle industry to innovate and produce electric cars is missing for ship owners, Kartsonas said. “In shipping, most of the push came through regulations, the IMO regulations.”

Rather than making the giant leap to building low-carbon ships, owners should focus on retrofitting their bulkers and tankers with sails to help them slash emissions, she said.

A pilot project carried out by Smart Green Shipping found that a cargo ship could save 20% in fuel every year when fitted with automated, retractable steel and aluminium sails, on a voyage from Baton Rouge to Liverpool.

Clean shipping on the horizon?

The UK, which is hosting the COP26 climate talks in November, said it would include emissions from international aviation and shipping for the first time in its sixth carbon budget, which sets out legal five-year targets under the Climate Change Act.

Meanwhile the EU has pledged to crack down on polluting ships by voting to include maritime CO2 emissions in its emissions trading scheme from 2022.

From the start of next year, shipowners will be forced to buy carbon permits to cover emissions during voyages in Europe and international voyages that start or finish at a European port.

“We continue to see the EU making faster progress than the IMO and now the US is starting to show climate leadership,” said Comer.  

And when President Joe Biden brought together world leaders for a climate summit, also in April, he announced a zero-emissions shipping mission, in collaboration with Denmark and Norway. The goal is for zero-emission ships to make up at least 5% of the global fleet by 2030.

“With the EU and US pushing for higher ambition, the IMO might be dragged along in the process,” said Comer.

Summary 

  • There are some positive signs but slashing shipping emissions requires much more innovation, carbon taxation and political will.
  • When the coronavirus pandemic struck in early 2020, international shipping was dealt a harsh blow.
  • There is an urgent need for the shipping industry to clean up its act. Ships emit around one billion tonnes of greenhouse gases every year, or 3% of global emissions. 
  • The sustainability push within capital markets that drove the vehicle industry to innovate and produce electric cars is missing for ship owners.

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Source: china dialogue Ocean 

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