The shipping industry must rise to the biggest technology challenge in 100 years in order to meet its decarbonization ambitions, a group of 34 maritime CEOs and industry leaders stressed in a call for action towards a new decarbonized future.
The CEOs support the International Maritime Organization’s (IMO) climate strategy to reduce the total greenhouse gas emissions by at least 50% by 2050.
In order to achieve this, the maritime industry needs to accelerate both technological and business model innovation, further improve operational and technical energy efficiency, and transition to zero-carbon fuels and new propulsion systems, the call for action states.
The signatory CEOs believe that a shift to a low-carbon economy by 2050 has the potential to create new opportunities for business through both technological and business model innovation. However, regulations should provide long-term certainty for financiers, builders, owners and charterers to make the required investments in low-carbon technologies. There is also a need for transparency to help drive change, the CEOs said.
“Global seaborne trade’s transition to a low-carbon future will propel both technological and business model innovation. The right incentives for accelerated investment into R&D can only come about if we get a global IMO based regulation. We invite stakeholders from the entire maritime spectrum to join us on this new journey,” says Claus Hemmingsen, Vice CEO of A.P. Moller – Maersk.
According to a joint statement released by the Global Maritime Forum, which organized the signing, emissions reduction objectives should be met at the lowest possible cost, and the acceleration to the use of low-carbon technologies and fuels will require significant funding flows for research and development. The industry should explore the use of carbon pricing and other mechanisms that can create economic value from greenhouse gas emission reductions.
There is no time to waste if the industry is to meet greenhouse gas reductions in line with the temperature goals of the Paris Agreement, research from Lloyd’s Register and University Maritime Advisory Services indicates.
“An ambitious strategy consistent with the Paris Agreement temperature goals will require zero emission vessels to be entering the fleet in 2030 and form a significant proportion of newbuilds from then on. Different solutions have different benefits for different types of ships, it is important that solutions are not only viable from a commercial perspective but are also technically feasible and can be safely adopted and operated,” says Alastair Marsh, CEO of Lloyd’s Register.
“Decarbonization of shipping means a new fuel supply chain in the medium-long term, and likely new infrastructure and onboard equipment. Current evidence is that, if properly aligned with the wider global shift to renewable energy, this should be achievable with negligible long-term impact for many end consumers and global trade. But it will need patience, cooperation and collaboration between many different stakeholders for this to happen,” Tristan Smith, Reader in Energy and Shipping at University College London, said.
“Shipping has so far been exempt from regulations to address the issues around GHG emissions from fuels for ships but the IMO has, after consultation laid a pathway, which requires a fundamental change in the way we fuel our ships. Shipping must embrace these targets so let’s take our responsibility to make sure our industry is heading towards a sustainable future for ourselves and the next generations in line with the expectations of our global stakeholders,” Paddy Rodgers, CEO Euronav, commented.
The maritime CEOs urged their peers to join them in seizing the opportunity to innovate and lead the transition to a new shipping industry for the 21st century.
The Global Maritime Forum added it was working together with financial institutions, shipowners, Rocky Mountain Institute, and University College London, on a set of principles for the inclusion of climate alignment and climate risk considerations in lending decisions.
The CEOs recommend that core principles of the “Roadmap” for transition to a new zero-emission future be:
- Ambitious: The strategy should be consistently in line with the Paris agreement’s temperature goals.
- Predictable: Regulations should provide long-term certainty for financiers, builders, owners and charterers to make the required investments in low-carbon technologies.
- Market-oriented: Emissions reduction objectives should be met at the lowest possible cost, and the industry should explore the use of carbon pricing and other mechanisms that can create economic value from GHG emission reductions.
- Technology-enabling: The strategy should accelerate the use of low-carbon technologies and fuels by encouraging significant funding flows for research and development.
- Urgent: Certain mid- and long-term measures will require work to commence prior to 2023, including the development of zero-emission fuels to enable implementation of decarbonization solutions by 2030.
- Coherent: Solutions implemented should build on and reinforce existing technical, operational, and energy efficiency measures whilst maintaining or enhancing safety standards. In this context it is critical that all IMO environmental regulations be compatible with future 2050 regulations.
- Enforceable: Legally binding, enforceable actions set by the IMO and enforced by member countries are required to compel the industry to shift.
The initial signatory CEOs include representative of industry majors such as Maersk, Cargill, Dorian LPG, DS Norden, Ocean Network Express, Pacific Basin, Trafigura, among others.
Illustration; Image Courtesy: LNG Carriers/ Flickr-Kees Torn under CC BY-SA 2.0 license