5% zero-emissions fuels target in shipping by 2030 “could well be exceeded”

By Katharine Palmer, Shipping lead, Climate Champions & Johannah Christensen, CEO, Global Maritime Forum | May 11, 2022

Following the spectacular climate-related announcements relating to shipping around COP26 last year, including the far-reaching Clydebank Declaration and the drive for new green corridors, those of us close to the front line were initially concerned that we might see a loss of momentum in the months that followed.

Quite the reverse has happened. Over the last six months, the spread, scale and frequency of new pilot projects and fuel development initiatives has exceeded all expectations.

Some of the world’s largest charterers – mining giants, food companies, traders and energy firms – have pledged allegiance to the decarbonization drive. But there is much more to be done.

Global shipping is right in the spotlight. And nowhere was this more evident than at the Our Ocean Conference, held in April 2022 in the Republic of Palau, a “large ocean state” in the Pacific Ocean at potentially fatal risk from climate-related issues and rising sea levels.

US Special Presidential Envoy for Climate, John Kerry, speaking in his keynote address in Palau, noted that if shipping were a country, it would be the world’s eighth largest emitter. This had to change, he said. Meanwhile US President Biden highlighted the scale of shipping’s emissions challenge in his pre-recorded message to the Conference.

Our friend and colleague, Susan Ruffo, who is a Senior Advisor for Ocean and Climate at the UN Foundation, has attended five of the seven Our Ocean Conferences held so far and cannot remember any previous event at which shipping held such prominence. In Palau, she said, it was at centre stage.

No fewer than 24 nations have now signed up to the Clydebank Declaration, launched at COP26, on the establishment of green corridors – zero-emission ocean routes between two countries or regions. They include nations large and small. Notably, coming out of the conference, Singapore has signed up and, as one of shipping’s most important global hubs, it is a welcome new heavyweight.

Just before COP26, the so-called Quad group of countries – US, Japan, India, Australia – announced the formation of a steering group to examine the setting up of “two-to-three low-emission or zero-emission corridors by 2030”. Unfortunately, however, the countries failed to quantify targets and, critics say, this has undermined their bold strategy. Ambitions without definite targets simply don’t cut it.

We have worked together with Tristan Smith of University Maritime Advisory Services (UMAS) on a number of climate-related projects. He believes that the UN Climate Change High-Level Champions and Getting to Zero Coalition’s target of 5% of zero-carbon fuels in shipping by 2030 could well be exceeded.

Smith has revealed that UMAS analysis last year demonstrated that 10% of shipping’s energy demand could be transferable easily to scalable long-run zero-emission fuels within this decade, based on scheduled routes rather than tramp operations. This gives us confidence that the target of 5% zero-emissions fuels by 2030 is achievable and could even be surmounted.

Smith sees tremendous potential in domestic initiatives to cut emissions. Countries have immediate control over their coastal waters and many of the vessels deployed in coastal trades lend themselves to the adoption of new fuels and propulsion technologies in the short term, he points out.

We also think that the announcement of plans for the world’s first dry bulk shipping corridor – iron ore between Australia and Asia – is a major step forward for several reasons. Not only does it involve two heavyweight mining charterers, BHP and Rio Tinto, but it also demonstrates that the higher costs of zero-emissions fuel can be borne in a dry bulk Green Corridor.

The business case for green corridors based on raw material movements is not as clear as for container ships where hundreds of shippers may be prepared to foot a small price for building market share by offering products shipped with zero emissions to customers. In dry bulk, the change in cost may be a large share of the shipped product’s value, but there are greater opportunities to find value through vertical integration in companies transitioning to the new energy economy.

It’s very encouraging to see these being explored. So, what we have seen in the six months since COP26 and expect to see in the run-up to COP27 at Sharm el-Sheikh in November are more initiatives to boost shipping’s sustainability with a focus on implementation. They embrace a range of technologies from zero-carbon fuel development to new engine technologies and ship designs incorporating ‘future-proofing’ features for profitable operation over at least two decades, as well as innovative enabling commercial and regulatory frameworks from across the full value chain.

These designs will include advances in ship operational efficiency – from smart digital systems to reduce fuel consumption, to real-time sensor-based monitoring and predictive maintenance; and from new propulsion technologies such as wind power assistance, to the use of air lubrication to minimize hull resistance. These and many others show we can still bring shipping’s energy demand down much more, reducing emission this decade, reducing the cost for operating on new fuels and making it easier to supply those new fuels.

However, while it is heartening to see the frequency and scale of new initiatives, it is essential not to lose sight of ambitions further down the road. The IMO’s short-term measures were adopted last year but attention now turns to the UN agency’s Greenhouse Gas Strategy revisions in 2023. In Palau, an additional 17 Countries signed the Zero Emission Shipping by 2050 Declaration launched at COP26, giving greater confidence in the long-run intent of zero and bolstering a coalition of countries that we hope will move to make that goal a reality in the IMO’s new strategy.

This is particularly necessary because of the IMO’s lack of ambition so far – its 50% reduction target by 2050, for example – fails to match the requirement of shipping to meet Paris Agreement goals. Therefore, we must see substantially more ambitious targets next year. We’re not talking about 50% any more, we’re talking about zero.

Research by many, including UMAS, sets concrete targets for waypoints on the path to zero – 27% of zero-emission fuel by 2036; 93% by 2046; and full decarbonization by 2050.

Retrofits of existing vessels will be essential, going far beyond mere compliance with IMO regulations such as its carbon intensity indicator, due to enter force next January. Meanwhile, shipowners contracting new vessels should ensure that they are built to future-proof designs to avoid obsolescence or lack of charterer appeal in the 2030s and 2040s.

The dramatic increase in shipping industry engagement is encouraging, but achieving the goals remains a formidable challenge. There is no time to lose!

Transport

How green corridors might help us understand the socio-economic and broader environmental aspects of the transition to zero carbon shipping

Transitioning to zero and near-zero emission economies is at the core of addressing the three planetary crises outlined by the UN: climate change, biodiversity loss, and pollution currently underway. However, decarbonization cannot be treated in isolation. As recognized in the 17 UN Sustainable Development Goals, “ending poverty and other deprivations must go hand-in-hand with strategies […]

VIEW MORE