- To achieve almost any corporate or national emissions targets it will be essential to decarbonise the shipping sector.
- Companies across the industry are calling on world leaders to support their efforts to reduce emissions further and faster.
- This will mean developing new vessels that use fuels produced without carbon emissions, which will involve the sector collaborating on a large scale.
Maritime shipping carries around 80% of the goods that the global economy moves around the world. Shipping is the lowest carbon form of transport per tonne of goods moved, but it still accounts for around 3% of global emissions. Almost no corporate or national net-zero emissions target will be achievable unless shipping is decarbonised.
The industry took a big step towards this objective with the pledge in 2018 by the International Maritime Organization (IMO) – the UN body that regulates the shipping sector – to reduce the sector’s absolute emissions by 50% from 2008 levels by 2050. However, given the urgency of the climate crisis, and advances in technology and policy since 2018, we believe the industry can and must move faster, with a goal of reaching zero-emissions shipping by 2050.
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Much of the industry agrees. On 22 September 2021, more than 150 industry leaders and organisations representing the entire maritime value chain signed the Call to Action for Shipping Decarbonization. These signatories, which include some of the biggest names in the maritime export economy, are calling on world leaders to:
Commit to decarbonizing international shipping by 2050, and deliver a plan to do so when adopting the IMO’s greenhouse gas emissions strategy in 2023;
Support industrial-scale zero-emission shipping projects through national action, with, for instance, domestic shipping emissions targets and incentives and support for first-movers;
Deliver policy measures to make zero-emission shipping the default choice by 2030. The 2050 decarbonization goal is an ambitious target; one that calls for intermediate goals and actions. The Getting to Zero Coalition, convened by the Global Maritime Forum, World Economic Forum and the Friends of Ocean Action, has also set a target of having commercially viable zero-emissions vessels operating along deep-sea trade routes by 2030.
Steps to zero emissions
Two elements of this pledge are important. The first is zero emissions: improvements in operational efficiency, or lower-carbon fuels, will not be sufficient to meet the IMO’s goal, let alone more ambitious ones, given expected growth in shipping volumes.
The second is 2030. Given the 20-year plus lifetimes of cargo ships, those entering into service in 2030 will still be operational in 2050. The lifetime of refuelling infrastructure is even longer, meaning that proposals to use liquified natural gas (LNG) as a less-carbon intensive ‘transition’ fuel make no economic sense: these investments would have to be decommissioned well before they had paid for themselves.
Instead, leading actors within the industry are mobilising behind developing new vessels that can use fuels that can be produced without carbon emissions: ammonia and methanol, produced using green or blue hydrogen, for example.
To create viable zero-emission vessels, the entire value chain will need to be involved, from ship-builders, fuel suppliers, operators of refuelling infrastructure to customers. Policymakers will need to provide supportive regulatory environments to ensure that zero-emissions shipping can become competitive with unsustainable modes. It will have to help reduce or underwrite the risks involved, supporting pilot projects, research and development. Investors and insurers will have to become comfortable with new technologies and revenue models.
Getting onto the ‘S’ curve
Modelling undertaken by consultancy UMAS for the Getting to Zero Coalition has found that a target of 5% of zero-emission fuels in the international shipping fuel mix by 2030 would mean the sector was on track for decarbonisation in line with the goals of the Paris Agreement. Following the ‘S curve’ progression that industrial transformations have tended to follow, 5% would represent the tipping point at which zero-emission fuels could become cost-competitive and from which their adoption would accelerate.
To meet this goal, the sector will need to collaborate on a large scale. However, even ahead of such collaboration, critical actors in the shipping value chain are already taking action, demonstrating how the sector could ultimately decarbonize. For example:
- Danish shipping giant Maersk has pledged to have a zero-carbon fleet by 2050. In July, it announced a contract to buy the world’s first container vessel to be fuelled by potentially zero-carbon methanol.
- Trading house Trafigura has called for the IMO to introduce a global carbon levy on carbon-intensive fuels, in a proposal that would help make zero-carbon fuels cost-competitive.
- Belgian tanker group Euronav is working with Korea’s Hyundai Heavy Industries to develop tankers able to run on ammonia, another potentially zero-carbon fuel.
- German logistics firm DHL, which also has a 2050 net-zero target, gives its customers the option of specifying sustainable marine fuel and aims to source 30% of its fuel requirements from sustainable sources by 2030.
- Mitsui O.S.K. Lines has committed to deploying net-zero emissions ocean-going vessels this decade.
- Chile’s Ultranav has pledged to only order ‘zero emissions ready’ vehicles from 2021, and only zero-emissions vehicles from 2030.
These examples provide real-world evidence of what is possible – but, to make this action mainstream and propagate these solutions throughout the shipping value chain, a range of actors will need to move together.
What is the World Economic Forum doing to help companies reduce carbon emissions?
Corporate leaders from the mining, metals and manufacturing industries are changing their approach to integrating climate considerations into complex supply chains.
The Forum’s Mining and Metals Blockchain Initiative, created to accelerate an industry solution for supply chain visibility and environmental, social and corporate governance (ESG) requirements, has released a unique proof of concept to trace emissions across the value chain using distributed ledger technology.
Developed in collaboration with industry experts, it not only tests the technological feasibility of the solution, but also explores the complexities of the supply chain dynamics and sets requirements for future data utilization.
In doing so, the proof of concept responds to demands from stakeholders to create “mine-to-market” visibility and accountability.
The World Economic Forum’s Mining and Metals community is a high-level group of peers dedicated to ensuring the long-term sustainability of their industry and society. Read more about their work, and how to join, via our Impact Story.
Working along the value chain
Bringing the value chain together is a key objective of the Mission Possible Partnership, which supports the Getting to Zero Coalition. We are working with the most ambitious industry leaders, their customers, suppliers, capital providers and key governments to define and take actions over the next 10 years that will enable drastic emissions reductions in the 2030s and 2040s.
We are building coalitions within each of our seven 'hard-to-abate' sectors to draw up industry transition goals that will set the direction of travel, support the intergovernmental climate negotiations, and ensure that, after COP26, each sector has a clear roadmap to follow.
As we embark on this journey towards zero-carbon shipping, we invite companies throughout the shipping value chain, from ship-builders to end-users, to work with us and play their part in decarbonizing this fundamental element of our global economy.
