With roughly 90% of global trade transported by sea, the industry emits more carbon annually as Germany and the Netherlands combined. And if shipping were a country, it would be the world’s sixth-biggest greenhouse-gas emitter, according to the World Economic Forum.
The World Shipping Council, whose members operate 90% of global container-carrying capacity, wants the International Maritime Organization it’s a United Nations oversight body to revisit its greenhouse-gas-emission regulations. The WSC, whose members include A.P. Moller-Maersk A/S, Cosco Shipping Holdings Co. and MSC Mediterranean Shipping Co., is asking for “global, enforceable multilateral regulation to avoid the race to the bottom,” said Jan Hoffmann, head of trade logistics at the UN Conference on Trade and Development. “They don’t really mind that level of regulation as long as it’s the same for everybody.”
Billions Needed
The Global Maritime Forum estimates that fully decarbonizing the shipping sector by 2050 will require as much as $95 billion of investment per year starting in the next decade. That compares with $25 billion climate change could cost the industry every year by the end of the century, according to an Environmental Defense Fund report. The container port industry’s global net earnings in 2019 totaled about that amount.
Companies investing in alternative energies “probably are going to get ahead in efficiencies that will bring huge reductions in costs,” said Josue Velazquez Martinez, a lecturer at the Massachusetts Institute of Technology Center for Transportation and Logistics. “There is a keen interest.”
The IMO’s marine environmental protection committee will meet in June to discuss the advancement of its greenhouse-gas emission strategy. The current framework establishes a 50% cut in emissions by 2050, well short of what’s required to align the sector with the Paris Agreement’s ambitions on limiting temperature increases. To address that, the committee recommended all member states fully decarbonize by then, but a majority including Saudi Arabia and China voted against it last year.
Getting the IMO’s 175 member states to reach consensus is far from easy. At the last IMO session in November, they failed to pass a tiny CO2-based charge on vessels’ fuel consumption, with many countries raising concerns about the levy. In the European Union, there are plans to include ocean shipping in the bloc’s Emissions Trading System, which aims to boost uptake of sustainable fuels. The ETS rules would apply to 100% of emissions for ships sailing to and from EU member states, and 50% of the discharges for ships traveling between the bloc and non-member states.
Achieving the green transition is “both technically and politically very difficult,” said WSC President John Butler. “It’s a bit of a fool’s errand, frankly, to say ‘this is going to happen by this date’ or ‘this is going to happen by that date.’ What we need to do is keep moving forward”. Cargo ships typically run on oil that produces particularly high carbon-dioxide emissions, but efforts to innovate are growing. The number of zero-carbon shipping projects has almost doubled in the past year, according to the Getting to Zero Coalition, constituted of more than 150 firms within the sector.
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