To reach net zero, the shipping sector needs political support

Maritime shipping carries around 80% of the goods that the global economy moves around the world. Shipping is the lowest carbon form of transport per tonne of goods moved, but it still accounts for around 3% of global emissions. Almost no corporate or national net-zero emissions target will be achievable unless shipping is decarbonised.

The industry took a big step towards this objective with the pledge in 2018 by the International Maritime Organization (IMO) – the UN body that regulates the shipping sector – to reduce the sector’s absolute emissions by 50% from 2008 levels by 2050. However, given the urgency of the climate crisis, and advances in technology and policy since 2018, we believe the industry can and must move faster, with a goal of reaching zero-emissions shipping by 2050.

Much of the industry agrees. On 22 September 2021, more than 150 industry leaders and organisations representing the entire maritime value chain signed the Call to Action for Shipping Decarbonization. These signatories, which include some of the biggest names in the maritime export economy, are calling on world leaders to:

Commit to decarbonizing international shipping by 2050, and deliver a plan to do so when adopting the IMO’s greenhouse gas emissions strategy in 2023;

Support industrial-scale zero-emission shipping projects through national action, with, for instance, domestic shipping emissions targets and incentives and support for first-movers;

Deliver policy measures to make zero-emission shipping the default choice by 2030. The 2050 decarbonization goal is an ambitious target; one that calls for intermediate goals and actions. The Getting to Zero Coalition, convened by the Global Maritime Forum, World Economic Forum and the Friends of Ocean Action, has also set a target of having commercially viable zero-emissions vessels operating along deep-sea trade routes by 2030.

Steps to zero emissions

Two elements of this pledge are important. The first is zero emissions: improvements in operational efficiency, or lower-carbon fuels, will not be sufficient to meet the IMO’s goal, let alone more ambitious ones, given expected growth in shipping volumes.

The second is 2030. Given the 20-year plus lifetimes of cargo ships, those entering into service in 2030 will still be operational in 2050. The lifetime of refuelling infrastructure is even longer, meaning that proposals to use liquified natural gas (LNG) as a less-carbon intensive ‘transition’ fuel make no economic sense: these investments would have to be decommissioned well before they had paid for themselves.

Instead, leading actors within the industry are mobilising behind developing new vessels that can use fuels that can be produced without carbon emissions: ammonia and methanol, produced using green or blue hydrogen, for example.

To create viable zero-emission vessels, the entire value chain will need to be involved, from ship-builders, fuel suppliers, operators of refuelling infrastructure to customers. Policymakers will need to provide supportive regulatory environments to ensure that zero-emissions shipping can become competitive with unsustainable modes. It will have to help reduce or underwrite the risks involved, supporting pilot projects, research and development. Investors and insurers will have to become comfortable with new technologies and revenue models.

Getting onto the ‘S’ curve

Modelling undertaken by consultancy UMAS for the Getting to Zero Coalition has found that a target of 5% of zero-emission fuels in the international shipping fuel mix by 2030 would mean the sector was on track for decarbonisation in line with the goals of the Paris Agreement. Following the ‘S curve’ progression that industrial transformations have tended to follow, 5% would represent the tipping point at which zero-emission fuels could become cost-competitive and from which their adoption would accelerate.

To meet this goal, the sector will need to collaborate on a large scale. However, even ahead of such collaboration, critical actors in the shipping value chain are already taking action, demonstrating how the sector could ultimately decarbonize. For example:

These examples provide real-world evidence of what is possible – but, to make this action mainstream and propagate these solutions throughout the shipping value chain, a range of actors will need to move together.

Working along the value chain

Bringing the value chain together is a key objective of the Mission Possible Partnership, which supports the Getting to Zero Coalition. We are working with the most ambitious industry leaders, their customers, suppliers, capital providers and key governments to define and take actions over the next 10 years that will enable drastic emissions reductions in the 2030s and 2040s.

We are building coalitions within each of our seven 'hard-to-abate' sectors to draw up industry transition goals that will set the direction of travel, support the intergovernmental climate negotiations, and ensure that, after COP26, each sector has a clear roadmap to follow.

As we embark on this journey towards zero-carbon shipping, we invite companies throughout the shipping value chain, from ship-builders to end-users, to work with us and play their part in decarbonizing this fundamental element of our global economy.