Shipping industry charts uncertain course to decarbonization

Shipping industry charts uncertain course to decarbonization

cargo ship shipping sustainability
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Cargo ships entering the port of Singapore.

The shipping industry is in a quandary. It sits outside of the Paris Agreement and is regulated globally by its own United Nations governing body, the International Maritime Organization (IMO). With mounting pressure on the industry to play its part in securing the "well below 2C" future set out in Paris, the IMO has pledged to have greenhouse gas (GHG) emissions regulations in place from 2023.

What these regulations might look like, however, will not be known until April at the earliest. More concerning is the IMO's language around the industry's responsibility to monitor and report its fuel consumption from January 2019. It hints at prevarication when it says that data will be used for "decision making on what further measures, if any, are needed." 

The face of future regulation and markets is uncertain. Yet shipping needs to reduce its GHG emissions by 50 percent from 2008 levels by 2050 to keep step with the rest of the world. So, what are the solutions for an industry whose GHG emissions profile is equivalent to Germany's? And how can it address the growing pressure from its customers, shareholders and supply chains?

Decarbonization, within the current context, may seem daunting. In the same way a ship sets sail to a destination with a navigation chart, the industry needs to have a pathway to decarbonization.  

A decarbonization pathway would give focus to our collective work, define clear objectives and describe what needs to be achieved to meet them. Carbon War Room is working on collaborations to help develop this decarbonization pathway and is keen to hear from anyone who would like to be involved. While key stakeholders in the shipping industry are already acting on decarbonization — for example, the Global Maritime Decarbonization Forum — we need a vision developed for the industry by the industry, rather than waiting for one to be imposed, either systemically or in a patchwork of national and local requirements.

This pathway to decarbonization requires a full industry transition, in which every sector and supplier contributes to progress. We must make the most of the full spectrum of opportunities, from digital innovation to fuel development. To decarbonize successfully, silos that stifle innovation must be torn down. Collaboration across sectors will broaden and accelerate the development of supporting tools and platforms, and industry-led forums will spur faster action towards ambitious, science-based emissions reduction targets.

These medium-to-long-term industry developments are key to achieving the ultimate aim — of a profitable, low-carbon global shipping industry by 2050.

Decarbonization is not a process that can be achieved with one simple answer. It must be built up over time through the development and application of multiple solutions. Eventually, the industry must shift from an energy-efficiency approach to transitioning off fossil fuels. A combination of effective planning, development of infrastructure, increased adoption and getting capital behind promising solutions — both for R&D and market rollout — is essential. 

In terms of action today, however, energy-efficiency still can have a significant impact. Proven physical and digital efficiency technologies are already on the market that, when used concurrently, can deliver fuel saving percentages in the double-digits. In some sectors, such as chartering and finance, simple changes in decision-making such as reassessing which ships are hired or which projects are financed can have a significant carbon-reduction impact.

It is clear that the shipping industry has a long way to go, and no clear route to get there. To profitably decarbonize within a 2 degrees Celsius context, the industry must pursue various solutions simultaneously. We must pursue the opportunities in a transparent and inclusive way. We must learn from other sectors that have embraced disruptive technologies and fuels. We must engage as many industry players as possible to work together on goals, and plot a clear and achievable course to get there.

The opportunity to optimize operations and implement proven, market-ready energy efficiency technologies at scale can and should be taken now. Only by multitasking will we be able to navigate together towards a profitable low-carbon future.

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