Shipping industry wants global rules on emissions

The shipping industry, among the world’s biggest polluters, is asking a key regulator to revise its emissions guidelines so that all carriers work to the same regulations as they make costly changes needed to cut production harmful carbon.

With around 90% of global trade transported by sea, the industry emits more carbon each year than Germany and the Netherlands combined. And if shipping were a country, it would be the sixth largest emitter of greenhouse gases in the world, according to the World Economic Forum.

The World Shipping Council, whose members operate 90% of the world’s container shipping capacity, wants the International Maritime Organization – a United Nations watchdog – to review its regulations on greenhouse gas emissions.

The board, whose members include AP Moller-Maersk, Cosco Shipping Holdings Co. and MSC Mediterranean Shipping Co., is calling for “global, enforceable multilateral regulation to avoid the race to the bottom,” said Jan Hoffmann, head of logistics. Trade at the United Nations Conference on Trade and Development. “They don’t really care about that level of regulation as long as it’s the same for everyone.”

The Global Maritime Forum estimates that fully decarbonizing the maritime sector by 2050 will require up to $95 billion in investment per year starting in the next decade. That compares to the $25 billion that climate change could cost industry each year by the end of the century, according to a report by the Environmental Defense Fund. The global net profits of the container port industry in 2019 totaled around this amount.

Companies that invest in alternative energy “are likely to gain efficiencies, which will lead to huge cost reductions,” said Josue Velazquez Martinez, associate professor at the Massachusetts Institute of Technology Center for Transportation and Logistics. “There is strong interest.

The International Maritime Organization’s Marine Environment Protection Committee will meet in June to discuss the progress of its strategy on greenhouse gas emissions.

The current framework sets a 50% reduction in emissions by 2050, well below what is needed to align the sector with the ambitions of the Paris Agreement on limiting temperature increases. To address this, the committee recommended that all member states decarbonize completely by then, but a majority, including Saudi Arabia and China, voted against it last year.

Bringing the 175 member states of the International Maritime Organization to consensus is far from easy. At the organization’s last session in November, they failed to impose a tiny CO2-based tax on ships’ fuel consumption, with many countries worrying about the tax.

In the European Union, there are plans to include maritime transport in the bloc’s emissions trading system, which aims to stimulate the adoption of sustainable fuels. The system’s rules would apply to 100% of emissions from ships sailing to and from EU member states, and 50% of discharges from ships traveling between the bloc and non-member states.

Achieving the green transition is “both technically and politically very challenging,” said World Shipping Council President John Butler. “It’s a bit of a mad rush, frankly, to say ‘it’s going to happen on this date’ or ‘it’s going to happen on this date’. What we have to do is keep moving forward.”

Freighters generally run on oil, which produces particularly high carbon dioxide emissions, but innovation efforts are increasing. The number of zero-carbon shipping projects has nearly doubled in the past year, according to the Getting to Zero coalition, made up of more than 150 industry companies.

Maersk, the second largest shipping company in the world, alone consumes about 12 million tons of oil per year, the same amount produced daily in the world. Yet it promises to become carbon neutral by 2040, a decade ahead of its own schedule.

The Copenhagen-based carrier aims to operate its first methanol-powered vessel by summer 2023, said Jacob Sterling, its decarbonization manager. Finding fuel for the objective was not easy.

“We got into this chicken-and-egg dilemma where we tried to convince people to produce green methanol,” Sterling said. Suppliers refused to make a firm commitment because Maersk did not yet have green ships that would run on this fuel. “It was like we were going in circles.”

At the same time, the transition to cleaner fuel is going to be difficult because “shipping will be competing for the same green electrons as other industries,” said Jan Dieleman, president of Cargill’s Ocean Transportation business.

With many ports carrying record cargoes, the situation could get worse. Assuming a steady growth rate, global trade volumes are expected to reach 120 billion tonnes in 2100 – but in the worst climate scenario, that growth could be stunted by nearly 10%, according to the Environmental Defense Fund.

“As trade grows and we don’t move away from fossil fuels, emissions from the shipping sector will also increase,” said Marie Cabbia Hubatova, one of the fund’s report authors. “One way of looking at it is, ‘If I’m not decarbonizing, then I’m basically self-destructive. The shows I produce will end up costing me a lot of money in damages caused by climate change. “”

Information for this article was provided by Jack Wittels of Bloomberg News.

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