The international shipping has set itself lofty goals in the push towards carbon-neutrality, wanting to get there by the middle of the century at the latest. Stuart Richardson asks whether these aims are feasible, and if everyone is onboard with the revolutionary changes that may be required.

The ongoing Covid-19 pandemic has left an enduring impact on global trade and distribution, with a massive drop off in air travel and freight across 2020 and 2021 leaving global businesses in a quandary. While the shipping industry took up a portion of the difference, the solution presented its own complications. The grounding of the Ever Given in the Suez Canal in March of this year highlighted some of these fragilities, and continuing supply chain issues across Europe, China, and the Americas into late 2021 speak to the overall size of the problems that must be overcome.

However, they are being overcome. Productivity in ports around the world is skyrocketing, bottlenecks are gradually phasing out, and lorry driver shortages are being addressed by a number of unique schemes to attract both new and experienced staff. As well as this, as international passenger and haulage flights slowly creep back up towards pre-Covid levels, the pressure is slowly starting to lift on international shipping.

So, what lessons can be learned from the past few years, and to what degree did it change the shipping industry’s relationship with the goals for carbon neutrality by the middle of the century set by the International Maritime Organisation (IMO)?

Across 2020, the industry was responsible for around two per cent of global energy-related CO2 emissions. It is a substantial portion of the worldwide annual CO2 quotient, and one which will potentially increase as the industry grows to meet booming post-lockdown demands. With all this in mind, what can be done today to generate positive change across the sector in line with the IMO’s net-zero mid-century goals?

“The IMO’s initial greenhouse gas (GHG) strategy was adopted in 2018, with the strategy set to be revised by 2023,” explains Natasha Brown, acting head of public information services for the IMO. “In simple terms, the short-term term measures are aimed at achieving the carbon intensity reductions of the initial greenhouse gas strategy. They do this by requiring all ships to calculate their existing energy efficiency shipping index, and establishing their annual operational carbon intensity indicators and rating. Ships then get a rating of their energy efficiency.”

It is a point that executive director for the Sustainable Shipping Initiative, Andrew Stephens, picks up while considering the changes that will need to be rolled out over time to make sure that the industry becomes an active participant in the push towards a green future.

“The transition to zero emission shipping by 2050 requires measures beyond improving energy efficiency, and while the IMO has a working plan for further reducing emissions through the implementation of mid- and long-term measures, higher levels of ambition are required in order to align shipping’s emission reduction targets with the temperature goal set up by the Paris Agreement.”

There can be little doubt that an abundance of ambition to achieve net-zero exists across all heavy industries – there is, after all, no future in anything else. But defining what form that future takes for shipping is less easy to define in exact terms.

“Options to reduce emissions from the shipping sector are likely to include technical and operational energy efficiency measures, improvements to resource use, alternative propulsion methods, and the widespread adoption of sustainable, zero and low carbon fuels and technologies,” Stephens continues.

“However, these fuels and technologies are at different levels of market readiness, with many still being prototyped, while others are currently being piloted. There is innovation in the industry, however the challenge comes from making these fuels commercially viable and scalable, reducing costs, and ensuring the port and bunkering infrastructure is in place.”

Preparation, collaboration, and ensuring a united front

If ambition and innovation are the pillars on which the green future of shipping sit, how prepared are businesses to influence, adapt to, and maintain the new modes of operation that will be needed.

Anette Maltun Koefoed, vice president of corporate communications at shipping giant Wallenius Wilhelmsen, is keen to emphasise a business environment that is ready and waiting for the challenges to come.

“The gravity of the climate crisis and the insufficient progress require a big stick, but we also see an urgent need for intergovernmental institutions such as the EU and IMO to provide global framework conditions for predictability, and a common playing field,” she explains. “These should include universally implemented, reliable, and robust carbon pricing instruments, consistent with the Paris Agreement, which facilitate incentives for cost-efficient investment into the research and development which is required to reach net zero emissions.”

What remains is the question of how a common playing field can be established to best guarantee that everyone has the opportunity to play their part. This is something that the International Maritime Organisation has gone to great pains to plan out.

“The IMO is concerned with the impacts of new measures, and the initial strategy recognises that the impact of any measure should be assessed and taken into account before its adoption,” says Brown. “Particular attention should be paid to the needs of developing countries, especially small island developing states and others among the least developed countries. Disproportionately negative impacts should be assessed and addressed, as appropriate.”

In an assessment of the industry’s overall assets, this presents a potentially serious problem. Namely, the number of ships already in circulation, being built, or soon to be built that do not fit the standards required to ensure the net-zero targets are hit. It is an issue not lost on Stephens.

“In the last two decades the numbers and the size of ships being built has increased, meaning that the tonnage due for ship recycling capacity is projected to double by 2028, and nearly quadruple by 2033,” he explains. “This, paired with the replacement of older vessels with zero emissions vessels, will lead to added pressure on today’s worldwide recycling facilities, which will likely not to be able to process the increasing demand unless facilitated with an increased capacity and a supportive regulatory landscape.”

But – as already noted – shipping productivity is on a sharp upward trend around the world, and the collaborative nature of the work behind this trend shows encouraging signs for the climate challenges to come.

“We are also seeing increased collaboration and cooperation across stakeholder groups, which can hopefully contribute to reducing disruption and ensuring alignment across the value and supply chain,” Andrew concludes.

Fuelling the push towards a green tomorrow

Fuel consumption remains, for obvious reasons, by far the major contributing factor to CO2 emissions within shipping industries, and a primary concern with regards to hitting the IMO’s targets. A number of innovative solutions are already being proposed or trialled to potentially address this, including new fuels like hydrogen or biomass fuels, and they could not be arriving at a better time.

Brown outlines how the IMO has developed a specialised web portal called NextGEN with the Maritime and Port Authority of Singapore, so that companies can keep track of what steps other stakeholders are taking to these ends, as well as updating the development of their own initiatives.

“The portal has been developed to serve as a circle of collaboration and a single portal to bring different stakeholders involved in maritime decarbonisation projects. These include ports, governments, companies, and research institutes, who share their knowledge on low- and zero-carbon fuels,” she explains.

Stephens notes that proper oversight in the push towards new technologies like low-carbon fuels must ensure that no unforeseen negative circumstances can be allowed to emerge in the process.

“It is very important to not forget about the sustainability aspects of these measures and not cause unintended impacts beyond GHG emissions and carbon intensity,” he says. “Building sustainability considerations into the discussion early, and providing assurance through standards and certification schemes, can help shipowners and operators make informed purchasing decisions, avoid unintended impacts, increase transparency, guide investment, and enable the development of new, sustainable fuel supply chains through the demand.”

As for where this will all lead in the medium- to long-term, Brown is uncompromising when putting forward the perspective of the IMO and the attitude it wants to see from the industry at large.

“Industry policy has to meet the mandatory legally binding requirements already adopted, and any further measures that may be adopted in future.”

Radical thinking for the blue economy

All of this points towards a promising, clearly envisioned intention to transition shipping to sustainable fuels, but what else can be started today to help meet – and potentially even exceed – those IMO targets?

“Ocean health and biodiversity are definitely areas where the shipping industry can get involved and have an impact. Working towards a sustainable shipping industry means looking at decarbonisation, seafarers’ rights, governance and transparency, but there is also so much that relates and connects to the oceans,” suggests Stephens. “Biofouling, ballast water management, ocean noise, plastic waste – the shipping industry has a role to play in building a resilient and sustainable blue economy, taking responsibility for the ecosystems and communities affected by their operations.”

It is a theme the IMO are keen to engage with as well, aware that promoting creativity and a desire to go the extra mile have a bleed-through effect through the growing business community.

“The IMO has adopted legally binding energy efficiency measures which are enforced by the States, who are party to the International Convention for the Prevention of Pollution from Ships (MARPOL) treaty,” says Brown. “Industry players such as ship owners and operators are therefore obligated to ensure their ships meet the legally binding requirements. They can of course go further.”

So, the ball is rolling, and there is a sense of hopefulness about the way the shipping sector will take to the changes to come. If there is a tempering factor to the hope, it is the universal concern regarding climate change that so much of what does or does not happen is reliant on all parties engaging to the best of their capacity. It is a big unknown, but climate science is dictating actions taken to date and the mood is bright. As long as this remains true, the potential for what the industry can achieve is huge.

“Understanding sustainability issues from a lifecycle perspective allows for informed decision-making concerning value chain risks and helps direct choices for investment, purchase and consumption,” Stephens concludes. “There is no ‘one-size fits all’ solution to reducing emissions in shipping. Actors in the shipping industry will decarbonise differently depending on their needs, their resources and what is available to them in the geographical locations where they operate.”

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