All aboard the shipping industry's climate change agreement

  1. Shipping accounts for an estimated 2.5 percent of global CO2 emissions
  2. Shippers will have to collect data on their fuels
  3. Industry has just emerged from the 'shipping economic crisis'

The International Maritime Organization (IMO) has created the first-ever global shipping agreement, which aims to halve the industry’s 2008 carbon emissions levels by 2050. Some observers are calling ita watershed moment” although others say it is just a “compromise“. But the industry will have to undergo rigorous self-examination and overhaul to toe the line.

International shipping produces emissions said to be higher than Germany’s entire economy, ranking it as the world’s sixth largest emitter, with an estimated 2.5 percent of total carbon dioxide emissions worldwide (BBC).

With shipping currently accounting for 80 percent of global trade, and with its emissions forecast to increase between 50 and 250 percent by 2050 depending on the global economy, the agreement was welcomed by environmental campaigners (The Guardian).

Carleen Lyden-Walker, the co-founder and executive of North American Maritime Environmental Protection Agency (NAMEPA) and an ambassador for the IMO, told WikiTribune that she was proud of her industry’s developments. “The shipping industry is committed to being responsible stewards of the environment. One of the things that is often lost in discussions of this nature is that people in shipping are citizens too. They want clean air and they want clean water. We are global citizens and these are values that we embrace, but we have to figure out the next step: how. We’ve already identified the what, what needs to be done. And now, we have to identify the how,” she said.

The complex international operations run by the shipping and aviation industries exempted them both from the 2015 Paris Climate Agreement. Since the aviation sector reached an emissions plan a couple of years ago, the shipping industry’s commitment to reducing emissions was put under scrutiny.

A step in the right direction

The Paris Agreement’s 195 United Nations Framework Convention on Climate Change (UNFCCC) signatories have committed to trying to keep global average temperature increase to below 2 degrees Celsius above pre-industrial levels. The recent IMO’s Maritime Environmental Protection Committee (MEPC) energy-efficiency strategy revolves around the same target.

From January 2019, ships will be required to collect data on each type of fuel they use. The Ship Energy Efficiency Management Plan (SEEMP) will outline the exact methodology that bigger, 5,000 gross tonnage, ships will need to use to collect and report the data. According to the organization, these ships account for approximately 85 percent of the industry’s total CO2 emissions. This should allow member states to draw up effective regulations by which the shipping industry will need to operate to ensure they will reach the agreed upon target of 50 percent reductions (IMO).

While the United States, Saudi Arabia and Brazil and some other countries did not want to set a target at all, the European Union, Britain and many small islands had hoped for a even bigger reduction of between 70 to 100 percent (BBC).

Diane Gilpin, CEO of the Smart Green Shipping Alliance, a collaborative initiative that aims to find commercially viable and environmentally-friendly shipping solutions, told WikiTribune that she believes the 50 percent reduction is a compromise but, nonetheless, a good first step. She said: “It’s an evolutionary process. It’s a signal to the industry that it’s got to change, it’s not stringent enough. It’s not clear enough how it will be measured or implemented … but it’s a step in the right direction and it does give the impetus to lower carbon.”

The IMO’s energy-efficient regulations expects existing ships to quickly adopt management plans to introduce technical measures such as improved voyage planning, waste heat recovery systems or fitting in new propellers, for example. According to a statement made by the IMO: “By 2025, all news ships will be a massive 30 percent more energy efficient than those built in 2014.”

New fuel, new ships, new thinking

The industry will now also have to revise the fuel on which it operates, that is, bunker fuel. The world’s dirtiest fuel oil is a residual oil left over from crude oil during the refining process. It tends to be used by large cargo ships because it is cheap (The Guardian). One option is to consider alternatives. This could includes hydrogen or ammonia fuels as well as batteries, but none of these have been used on a large scale (Financial Times). Consequently, new engines will need to be implemented or maybe even entirely new ships will have to be considered to ensure compliance.

John Kornerup, head of sustainability for Maersk, a Danish shipping company, said: “… the technologies are there but they are far too expensive, we don’t have them at scale” (Financial Times).

The European Commission has contributed €10 million ($12.2m) to the IMO’s energy-efficiency project. The four-year project aims to develop Maritime Technology Cooperation Centres in Africa, Asia, the Caribbean, Latin America and the Pacific. According to the IMO, these centres will support implementation of the new rules while also encouraging less developed countries to invest in low-carbon shipping operations.

People in shipping are citizens too.

But first things first: the industry needs to prepare itself for the global sulphur cap coming into force in 2020. The main source of propulsion for cargo vessels — fuel oil — can contain up to 3.5 percent of sulphur content. This regulation slashes the sulphur limit down to 0.5 percent, which means vessels will either have to source new fuel or invest in scrubbers that remove any excess sulphur content before it reaches the seas (Financial Times). According to Maersk, this new regulation will cost the container shipping industry an extra $5-30 billion, annually.

These moves send a clear message that a transformation is required. Both Lyden-Walker and Gilpin recognise that the industry has just emerged out of the so-called “shipping economic crisis” which succeeded the slump of 2008; therefore shipowners may not have the finances to invest in new, green shipping technologies. Before any data is collected or regulations outlined, it is hard to gauge a realistic timeline for this industry’s overhaul.

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