Last month, shipping experts meeting at the International Maritime Organization (IMO) confirmed what climate activists, media and many in the public already know: the growing importance of the shipping sector’s impact on global climate.
Having adopted the greenhouse gas (GHG) strategy in 2018, requiring a reduction of emissions by at least 50% compared to 2008 levels, the IMO at its May meetings was expected to start discussing specific measures designed to meet this target. Although this didn’t happen, the delegates at least agreed on terms of reference for the upcoming meeting in November – putting discussion of specific measures as the central topic. This includes consideration of incentive schemes for the uptake of alternative fuels that reduce shipping’s climate impact and development of lifecycle GHG guidelines, which will be crucial for meeting the 2050 target.
What now?
The next two meetings will be key to whether the IMO can meet its 2050 goal or not. It is now a widely accepted fact that to decarbonise the industry, ships must switch from fossil to alternative fuels. This must begin quickly as ships built today will exist for the next 20 to 30 years. This is where the IMO can make a difference. IMO member states must ensure that they come to the next IMO sessions ready to drive policy that will push shipping’s environmental ambitions forward, and agree on specific measures that get shipping closer to the widespread adoption of alternative fuels in a sensible timeframe for the environment.
Additionally, all alternative fuels will have to be assessed from a lifecycle perspective, to ensure that they really do reduce emissions. Some fuels could cause upstream emissions, for example from land use change and deforestation, and these fuels must be avoided. The IMO is equipped to create systems that ensure the full lifecycle of any alternative fuels are fully accounted for through regulation that would apply worldwide. Indeed, systems have been created elsewhere (e.g. in the International Civil Aviation Organization) that could be copied at least in part into the IMO.
Policy to drive investment is needed
Alternative fuels are currently very expensive compared to the fossil fuels that ships currently use, partly because shipping fuel is not subject to any taxes nor required to pay for the climate damage it causes. In order to drive the uptake of new clean fuels, investment will be needed, which can be unlocked by sensible policy. This again is where members of the IMO can drive the transition.
The IMO could introduce a carbon pricing mechanism for shipping which would require carbon emitting ships to pay a fee for using GHG emitting fuels. The money collected would then be distributed among decarbonisation projects (such as implementation of alternative fuels or building related infrastructure) and could provide assistance especially to the countries who would struggle to attract investment from elsewhere. Norway successfully implemented a similar system, known as the NOx Fund, to successfully direct investment into projects that reduce emissions of nitrous oxides.
Some suitable alternative fuels already exist, such as green ammonia manufactured from excess or untapped renewable energy. Some of these fuels can begin to be rolled out with only minimal retrofitting of existing ships, making wide implementation easy and fast. Although currently these alternative fuels are too expensive for a widespread rollout, the IMO can help bring them within reach. But first the IMO needs to put in place measures that will help make sustainable fuel technologies widely available. The first steps will have to be taken at the next IMO meeting in November. It is critical that the IMO sets a clear direction for the (clean) future of shipping; it needs to agree and adopt the measures that will allow investments to flow into developing alternative fuels for shipping that take into account the full lifecycle of emissions.
It won’t be an easy task, especially with the limited time left. Postponing this agenda to another meeting (and another year) means inevitably a delay in implementation and therefore less time to meet the 2050 goal. However, the shipping sector has proved to be capable of massive transformations, having historically moved from wind to coal to oil. Will the next major transformation be a move to clean technology? If that’s the direction it sails, shipping could tackle both GHG emissions that cause climate change and air pollution, and provide investment opportunities for development across the world.