Charting a course to zero emissions: the challenge for global shipping

On the sidelines at the COP26 climate summit in Glasgow, the conference billed as the world’s ‘last best chance’ to avoid catastrophic climate change above 1.5°C of global heating, the shipping industry was rallying.

For decades the sector and its regulator, the International Maritime Organisation (IMO), had dilly-dallied about who should be held responsible for emissions from international shipping – which, if it were a country, would rank on par with Germany as the world’s seventh-largest emitter.

Now, pressure is mounting on the shipping industry to chart a course to zero emissions.

“There seemed to be an awful lot of action going on [at COP26] by different countries and by different parts of the shipping sector, to decarbonise and to act more quickly than they have done in the past,” says shipping sector analyst Simon Bullock of the University of Manchester, who attended the conference.

But, Bullock says, there are also a lot of nations resisting heavily – so getting the whole shipping industry on board to net zero will be a mammoth task.

Shipping’s slippery history

As far back as the 1997 Kyoto Protocol, and even under the 2015 Paris Agreement, greenhouse gas emissions from international shipping were delegated to the IMO and not counted in national tallies.

Countries argued: how could they be? When a single ship can be registered, fuelled, loaded and landed in different countries; built, owned, operated and crewed by a chorus of other companies – who do you hit up for the emissions?

“It’s a really complex matter,” says Peter Van Duijn, a marine logistics expert at Deakin University and former master mariner. But, he says, countries have long shirked responsibility for shipping emissions by hiding behind the complexity of international operations and effectively “kicked the can down the road”.

Some countries are now pushing for tougher targets than the IMO’s initial goal, set in 2018, of cutting the sector’s emissions at least in half by 2050, which has been widely criticised as too little, too late. Industry heavyweights, including the world’s largest container ship company, Maersk, are instead forging ahead with their own plans to reach net zero by 2050.

When a single ship can be registered, fuelled, loaded and landed in different countries – who do you hit up for the emissions?

“The general consensus [of the industry] is that we can’t stick to the 2050 target of only 50 per cent [emissions] reduction,” Van Duijn says. “It’s just not tenable in this current climate.”

That’s because international shipping is fast running out of its fair share of the global carbon budget, as Bullock’s recent research shows.

To do its part to limit global heating to 1.5°C, the sector needs to start reducing emissions no later than 2023 – which is incidentally when the IMO is set to revise its strategy and emissions reduction targets – slash total emissions by a third relative to 2008 levels by 2030, and reach zero emissions before 2050.

And that’s being generous, Bullock says. Another analysis, by policy analyst Bryan Comer of the International Council on Clean Transportation, suggests the global shipping sector needs to go further still and halve its emissions by the end of the decade.

Regardless, both analyses show the longer action is delayed, the steeper the trajectory to zero emissions becomes and the sooner the shipping sector has to get there. Which is a problem, particularly for shipping.

“In some sectors, really fast decarbonisation might be possible,” explains Bullock. “But in shipping it’s extremely difficult.”

Ships have an average lifespan of 25 years or more, the turnover of shipping fleets is slow, and retrofitting existing vessels isn’t easy. Building port infrastructure to supply future ships with alternative zero-carbon fuels, such as hydrogen and ammonia, will also be an enormous task given the size of the industry.

“For all those reasons, it’s not really feasible to see extremely rapid transitions in shipping,” continues Bullock. “So therefore, to stay within the carbon budget [of the Paris Agreement] we’ve really got to go now. It’s this decade that matters more than anything else.”

So what can be done?

There are plenty of ways shipping can curb its emissions, starting with existing fleets.

Ships can plug into grid electricity while docked at port instead of burning more fuel. Similarly, ships with hybrid engines can switch to electric batteries to conserve fuel over short distances. Both would reduce emissions, assuming renewable energy is used.

Another promising strategy is harnessing wind power with kites and sails to reduce fuel use. Only a couple of years ago, the industry shrugged off the potential of wind-assist technologies but now, Bullock says, there is a “growing understanding that they can make big savings across a large number of different ship classes.”

If ships, for example, used a satellite navigation system that integrates weather data to follow the most fuel-efficient route through the windiest past of the oceans, they could reduce emissions by up to 30%.

But the industry needs to design ships that no longer run on fossil fuels, and build them sooner than you might think. Given the decades-long lifetime of cargo vessels, the ships that will be sailing carbon-free in 2050 have to be built by the end of this decade.

Green hydrogen is touted as the zero-emission fuel of the future.

“Engine manufacturers are scrambling at the moment to work out how” to engineer ships that run on zero-emissions fuels instead of diesel oils, also called bunker fuels, says Van Duijn. “Hydrogen seems to be the frontrunner; they’re also looking at methanol and ammonia as fuels for ship engines.”

Shipping giant Maersk has announced its first carbon-neutral methanol-powered container ship will hit the water by 2023, seven years ahead of schedule. But there are serious doubts whether methanol, like biofuels, can be produced at scale in a sustainable way, Bullock says.

Green hydrogen, which is produced from fresh water using nothing but wind and solar energy, is touted as the zero-emission fuel of the future. However, hydrogen faces its own obstacles, so the shipping industry is also reimagining ammonia as a fuel, which is easier to contain than liquid hydrogen, but toxic.

In the meantime, shipping lines have switched to using liquid natural gas, which produces up to 25% fewer emissions than marine bunker fuels.

Except gas is still a dirty fossil fuel and LNG-fuelled ships run at low pressures can leak methane, a more potent greenhouse gas than carbon dioxide, which completely cancels out any reductions in CO₂ emissions, says Comer.

Who pays for emissions?

What’s needed to incentivise the transition to alternative fuels is a price on carbon, Bullock says. Making ship owner-operators pay for emissions would make cleaner fuels cost-competitive with diesel fuels, which are untaxed and dirt cheap.

Yet taxing carbon is hotly debated, says Beatriz Garcia, an international law expert at Western Sydney University, not least because developing countries who have contributed the least to climate change (and typically operate older, inefficient vessels) are being asked to pay for the emissions of an industry which underpins global trade.

Nevertheless, the low-lying Marshall Islands, one of the biggest ship registries in the world, is leading the charge for a flat-rate fuel levy of US$100 per tonne of CO₂ equivalent emitted, which is many times more than what the industry is proposing to charge itself.

Making ship owner-operators pay for emissions would make cleaner fuels cost-competitive with diesel fuels, which are untaxed and dirt cheap.

Aside from bankrolling investments into zero-emission technologies, the funds raised would help developing countries decarbonise their shipping fleets and revamp port infrastructure.

“The ultimate goal of zero emissions can only be delivered with genuine zero-carbon fuels,” says Garcia. “Assisting [developing] countries to make that transition is something quite essential.”

Relying on market forces alone, however, is not going to result in a fast enough transition to zero emission vessels, says Comer. “The global shipping industry isn’t going to change unless it makes economic sense or unless they’re required to do so,” he says.

That’s why the industry, through the IMO, also needs to set more ambitious emissions reduction targets for 2030, commit to a ‘zero date’ for when the sector will reach zero emissions, and ratchet up regulations on the energy efficiency of new and old ships, to force the transition to occur, Comer says.

No silver bullet

The biggest ships are speeding up and emitting more to keep up with demands of global trade. Without greater action, emissions from shipping are expected to grow anywhere between 50% to 250% by 2050.

“Time is increasingly what we don’t have so I think there’s a strong need for actions outside of the IMO,” says Bullock. “We need to see regional, national, and industry actions at all levels to try and make this transition happen faster.”

He points to big industry alliances between, for example, shipping companies like Maersk and giant retailers Amazon and IKEA, who are among the biggest polluters and have pledged to ship their cargo using zero-carbon fuels by 2040.

Comer agrees that the shipping sector cannot wait for the IMO. As we speak, the IMO’s 175 member states are continuing discussions about revising the organisation’s climate strategy ahead of its self-imposed deadline of 2023.

“We need to see regional, national, and industry actions at all level to try and make this transition happen faster.”

Simon Bullock, University of Manchester

The current energy-efficient regulations designed to reduce ships’ carbon intensity – by 40% by 2030 – are so weak, Comer says, they won’t cut emissions, they’ll only keep pace with the industry’s next decade of growth.

“We need regions like the EU, North America, Asia and other countries to step up to be first movers on regulations that require the ships that call on their ports to start cleaning up their act, require the use of zero-emissions electricity when they’re in port, and start establishing zero-emissions corridors,” he says.

Talk of zero-emissions corridors, which would see carbon-free shipping between ports equipped with alternative fuels, was one of the faint ‘silver linings’ of COP26. A band of 22 countries agreed in Glasgow to set up six decarbonised shipping corridors by the middle of this decade and many more by 2030, under the now-named Clydebank Declaration.

Although details are scant at this stage, establishing green shipping corridors would help build industry confidence that zero-emissions technologies can be deployed at scale, across major trade routes, Comer says.

“That’s probably where things will start to move,” adds Van Duijn. “It’ll push engine manufacturers and ship builders to sharpen their pencils.”