Shipping is targeting zero emissions. Here’s how an industry coalition plans to help
Roughly 90% of global trade is carried by shipping, making decarbonization of the sector difficult — but essential. Image: REUTERS/Lucy Nicholson/File Photo
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:
Climate and Nature
Listen to the article
- Shipping is one of seven hard-to-abate sectors where decarbonization is essential — but hard.
- To make it happen for shipping, the ZEMBA coalition has introduced innovative new procurement techniques backed by some of the world’s top companies.
- Over three years, ZEMBA expects to help its member companies reduce nearly 1 million tons of carbon emissions.
Climate-conscious customers are growing more focused on the emissions associated with their purchases. They’re starting to care about where their products came from, and, critically, how they got into their hands. They’re starting to focus on the shipping industry’s decarbonization journey.
At the same time, policy-makers from the local to the global level are implementing new actions, and stakeholders from across the maritime value chain are taking steps to address the maritime sector’s annual billion tons of greenhouse gas emissions.
Decarbonization of a sector transporting 90% of global trade is multifaceted; there’s no one “silver bullet” solution.
ZEMBA: the coalition creating a new market for zero-emission solutions
Reducing and eventually eliminating emissions from the maritime sector requires innovative forms of collaboration. The role of first movers is crucial to kickstart the transition to a zero-emission (ZE) maritime sector. During these early stages of the sector’s journey, first movers are essential to test ambitious solutions, push boundaries and help determine the necessary trajectory towards zero.
Cargo owners are also particularly important. As the customers of the maritime shipping sector, concerted demand for ZE solutions from them is essential to create the conditions for the rest of the value chain to invest and take action. But because ZE shipping solutions are not yet on the water, innovative procurement methods are needed to line up customers’ willingness to pay for a new, premium ZE shipping service with suppliers who are ready to deliver.
Climate-leading companies are crucial first movers. They have demonstrated their willingness to pay for ZE solutions, to pilot novel procurement techniques through investments, and to participate in consortium approaches.
Cargo owners’ collaboration — impact and economies of scale
Due to the global nature of the maritime shipping sector, and the sheer number of companies that rely on ocean transport, cargo owners cannot act alone in driving demand for ZE solutions. Within the maritime decarbonization space, initiatives such as the Zero Emission Maritime Buyers Alliance (ZEMBA) and the First Movers Coalition mean cargo owners of all shapes and sizes can catalyse faster action and take advantage of economies of scale.
ZEMBA is the only buyers’ alliance in the maritime space aimed at accelerating the commercial deployment of ZE shipping. Through advanced market commitments for ZE solutions, ZEMBA members will gain early access to ZE shipping services not currently on the market and build confidence among private sector actors and policy-makers that sufficient demand for ZE solutions exists to stimulate additional investment and regulatory action at the global, regional and domestic levels.
ZEMBA co-founders The Aspen Institute, Amazon, Patagonia and Tchibo are joined by over 20 additional members for a first-ever Request for Proposals (RfP) for zero-emission shipping, which was launched this month. The ZEMBA RfP helps create confidence throughout the maritime value chain as cargo owners offer concrete demand for the delivery of ZE services in 2025. This lag between demand and delivery of supply gives other actors in the maritime value chain time to make the investments necessary to meet ZEMBA member’s goals.
Additionally, ZEMBA’s multi-step process was designed to get cargo owners the best deal on zero-emission shipping services. Since there is no existing market for ZE shipping services, the price for such services is unknown. By going to the market and soliciting pricing for an initial amount of volume — without locking ZEMBA members into a specific volume of demand until after pricing comes back from bidders — members have all the information at their fingertips before finalizing their contracts.
Through this process, over the course of a three-year period, ZEMBA expects to help its member companies reduce nearly 1m million tons of carbon emissions through the procurement of 600,000 twenty-foot containers (TEU) on vessels powered by zero-emission fuels over a three-year period.
The First Movers Coalition is harnessing the purchasing power of members to decarbonize seven hard to abate industrial sectors that currently account for 30% of global emissions: aluminum, aviation, chemicals, concrete, shipping, steel and trucking along with innovative carbon removal technologies. Through a range of programmatic activities, the coalition aims to drive offtake to increase supply availability and to scale up clean energy technologies. The collaboration with ZEMBA is at the core of what is needed to accelerate zero-emission shipping solutions.
Fostering competition for the green premium
Recognizing the high cost of purchasing near-zero products and services that are not yet available at scale, innovative and collaborative “forward” procurement facilitates the aggregation of demand from multiple buyers to gain economies of scale as early in the transition as possible, build market confidence through longer-than-usual offtake, and share both the risks and glories of bold collaborative action.
Increasingly, actors across the maritime value chain have emphasized the importance of collaboration and partnership to drive decarbonization. The ZEMBA pilot RfP represents a concrete, action-oriented way for companies to collaborate, taking steps toward achieving their own Scope 3 emissions reduction goals while influencing the creation of a ZE shipping market. For companies that are part of the First Movers Coalition Shipping commitment moving cargo, ZEMBA represents a way that they can work toward their 2030 and 2040 targets. As a vessel owner, the success of this RfP confirms that there is offtake for their zero-emission maritime service product. For companies committed to other sectoral goals under the First Movers Coalition, ZEMBA represents an opportunity to begin to address their maritime shipping emissions even on a smaller scale and realize the catalytic influence they have in driving the decarbonization of this global sector.
How procurement can tackle climate change
Collaborative procurement of ZE shipping services carried out by ZEMBA demonstrates the kind of approach needed to address a wide range of challenges associated with the climate crisis. With its strong ties with suppliers and customers, cross-functional reach and access to detailed supply and demand market data, procurement is the natural department to take the lead in putting decarbonization goals into practice. And yet the performance indicators for procurement teams rarely include reducing emissions. This must change.
Engaging in innovative procurement approaches and collaborating with value chain partners are examples of actions that can accelerate supply chain decarbonization while alleviating the risk of first movers. This was the focus when leaders within the procurement and sustainability sectors met at the Procure Innovation Dialogues hosted by First Movers Coalition in New York September 14th and 15th.
First-mover action alone, however, is not enough to fully decarbonize the maritime industry. Complementary robust policy support and regulatory action at all levels is an essential component to first mover action, and is needed to enable a fast, smooth, economically viable transition.
The success of decarbonization efforts in the First Movers Coalition’s areas of focus depends on procurement innovation. ZEMBA serves as a model of innovation and is helping put the maritime sector on a path toward a ZE future.
Don't miss any update on this topic
Create a free account and access your personalized content collection with our latest publications and analyses.
License and Republishing
World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.
The views expressed in this article are those of the author alone and not the World Economic Forum.
Related topics:
The Agenda Weekly
A weekly update of the most important issues driving the global agenda
You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.
More on Nature and BiodiversitySee all
Kirsten Schuijt and Maria Susana Muhamad González
October 11, 2024
Douglas Broom
October 11, 2024
Johnny Wood and Madeleine North
October 3, 2024
Andreas Obrecht and Akanksha Khatri
September 25, 2024
Gill Einhorn and Rosie Ponting
September 25, 2024