Decarbonize shipping – why is the time to act?
- The shipping industry must achieve zero emissions by 2050, and to get there, zero emission ships must become the dominant and competitive choice by 2030.
- A zero-emission fleet is only viable if zero-emission energy sources are competitive with traditional fuels, but there is a competitiveness gap that the market cannot resolve on its own.
- It is essential for the long-term success of shipping that the International Maritime Organization and member states move forward in adopting regulations that allow shipping to decarbonize in accordance with the Paris Agreement.
A conversation with a six-year-old will end any doubts you might have about the importance of tackling climate change. Environmental awareness is the hallmark of our time. As older generations ponder the ‘what’ and ‘hows’, younger generations wonder why so much time is spent debating rather than doing.
The call to tackle climate change is growing among citizens, investors, businesses and countries around the world. US Climate Envoy John Kerry recently announced that the US is joining international efforts to achieve zero emissions from international shipping by 2050. And the shipping industry wants to play its part. Since 2019, the Getting to Zero Coalition has worked to make zero-emission ships commercially viable by 2030 from a technology, business model, growth opportunity and policy perspective.
For the world to decarbonize, shipping must decarbonize
Shipping connects the world by providing essential goods that society needs to thrive. Although this is done with the lowest carbon footprint of any mode of transport per tonne transported, shipping still emits significant amounts of greenhouse gases. With a large carbon footprint showing only signs of growth and an investment horizon of several decades, shipping cannot afford to wait. For the world to decarbonize, maritime transport must decarbonise it.
To stay in tune with the needs of society – and thus stay relevant as an industry – now is the time to act. The shipping industry must reach zero emissions by 2050, and to get there zero emission ships must become the dominant and competitive choice by 2030, when we must achieve 5% zero emission energy sources in international shipping.
But this is an enigma. A zero-emission fleet is only commercially viable if the zero-emission energy sources are competitive with traditional fuels. However, fossil fuels remain readily available, reliable and cheap – and compatible with existing ships and engines – creating a competitive gap that the market cannot resolve on its own.
New policies are needed, regulating and pushing ship owners, operators and fuel suppliers in a direction that stimulates investment in new fuels and new technologies to enable a zero emission fleet. And we have to move the needle now.
3 priorities for the IMO
In the field of maritime transport, we are fortunate to have the International Maritime Organization (IMO) as an international body regulating our activities, ensuring a level playing field and an efficient global maritime transport system. However, it is essential for the reputation and long-term success of our industry that the IMO and its Member States make progress in adopting regulations that allow maritime transport to decarbonise in accordance with the Paris Agreement and expectations. public.
We call on IMO and Member States to urgently address three priorities:
1. IMO should align international shipping with the Paris Agreement temperature target by adopting a goal of fully decarbonizing international shipping by 2050, when IMO’s initial GHG strategy will be. revised in 2021 and 2022. This would set a clear direction for the industry – a direction that has already been set for domestic emissions by many countries around the world including China, EU, Japan, South Korea, the United Kingdom and the United States.
2. IMO is due to make progress this year at MEPC 76 and 77 on meaningful measures to close the competitiveness gap between carbon-based fuels and zero-carbon energy sources. This includes market-based measures setting an adequate price for GHG emissions based on a full life cycle analysis of energy sources. Progress this year is needed to build confidence throughout the maritime value chain that such measures will come into effect in 2025 and make the transition to zero-emission maritime transport investable at scale.
The required price on international shipping GHG emissions needed to achieve 5% zero-emission fuels by 2030 can be significantly reduced if the revenues generated by a market-based measure are used to support the large-scale deployment of ships and zero emission fuels. It would also help reduce risks for early arrivals and make investments in zero emission ships and fuel production possible.
3. The IMO must ensure an effective and fair global transition to emission-free shipping. This could be achieved if part of the funds raised through a market-based measure were used to support climate-vulnerable countries as well as to support the development and deployment of economically viable, zero-emission fuels and technologies in the country. developing countries, especially small island developing states. and the least developed countries.
Recent World Bank reports show that meeting future demand for zero-emission fuels will create new opportunities for growth and jobs around the world, especially in developing countries and emerging economies. This demonstrates that the transition to zero-emission shipping can go hand in hand with sustainable economic growth.
Decarbonizing maritime transport is possible, but it will require urgent and sustained action from the private sector as well as from governments. Let’s move forward together to make shipping a zero emissions industry, so we can be proud of the response we give a six year old when they ask, “What are you doing to fight the change?” climate? “
The signatories of this editorial are all active in the Getting to Zero Coalition.
Switching to clean energy is essential to tackle climate change, but over the past five years, the energy transition has stagnated.
Energy consumption and production contributes two-thirds of global emissions, and 81% of the world’s energy system still relies on fossil fuels, the same percentage as 30 years ago. In addition, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018, energy intensity improved 1.2%, the slowest rate since 2010.
Effective policies, private sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential for a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing the energy transition is the lack of preparedness of the world’s largest emitters, including the United States and China. , India and Russia. The 10 countries with the highest preparedness scores represent only 2.6% of global annual emissions.
To sustain the global energy system, the Forum’s Shaping the Future of Energy and Materials platform is working on initiatives such as systemic efficiency, innovation and clean energy and the Global Battery Alliance to encourage and enable investments, technologies and innovative energy solutions.
In addition, the Mission Possible Platform (MPP) works to bring together public and private partners to support industry transition to put heavy industry and mobility sectors on the emissions path. net zero. MPP is an initiative created by the World Economic Forum and the Commission on Energy Transitions.
Does your organization want to work with the World Economic Forum? Learn more here.