The CEOs of five of the world’s biggest shipping companies called at the COP28 for an end date for fossil-only powered newly built ships in an ‘unprecedented’ joint declaration. They urge the global regulator, the International Maritime Organization (IMO), to create regulatory conditions to accelerate the transition to green fuels.
The five are Danish A.P. Moller–Maersk, French CMA CGM Group, German Hapag-Lloyd, Italian-Swiss MSC Mediterranean Shipping Company, and Norwegian ro-ro giant Wallenius Wilhelmsen. Together, they manage a fleet of 2.392 of the most giant ships sailing the world’s oceans.
Demanding clear measures
They want the IMO to create concrete policy measures to ensure investments in the maritime sector enable decarbonization to occur at the pace required. That ‘pace’ the IMO agreed on is somewhat vaguely based on ‘indicative checkpoints’ today with an end goal of reaching net-zero greenhouse gas (GHG) emissions ‘by or around 2050’.
The five CEOs propose four regulatory ‘cornerstones’. It starts with an end date for the new building of fossil fuel-only vessels and an apparent greenhouse gas intensity standard timeline to inspire investment confidence for new ships and the fuel supply infrastructure needed to accelerate the energy transition.
Secondly, they called for an effective GHG pricing mechanism to make green fuel competitive with black fuel during the transition phase when both are used. ‘Green fuels’ like hydrogen-based fuels or ammonia, will be in limited supply to start. Shipping companies are slowly turning to new propulsion techniques like dual-fuel engines to start.
Belgian tanker giant Exmar, for instance, is a leading player in transporting liquefied gas products like LPG, butane, propane, and ammonia and has ordered the world’s first two gas tankers that can run on the ammonia they transport.
A third pillar is a vessel pooling option, with GHG emissions considered for a group of vessels instead of only that of individual ships, somewhat like Europe imposes CO2 emission standards for car manufacturers based on an average of the whole fleet of newly sold cars.
The fourth pillar demanded is a well-to-wake or lifecycle GHG regulatory basis to align investment decisions with climate interests and mitigate the risk of stranded assets. “Well-to-wake” refers to the entire process of fuel production, delivery, and use onboard ships and all emissions produced therein.
About 3% of global GHG
The world’s combined merchant fleet counted 118.928 vessels in January 2023, of which 14.309 are oil or chemical tankers (12,03%) and 5.517 are container ships (4,64%). They are responsible for about 3% of global GHG emissions, being at 2.76% in 2012 and growing to 2.89% in 2018, according to the latest IMO figures. In 2022, emissions increased by 5%, after a sharp decline in 2020, and are now back to 2017-2018 levels.
Initially in 2018, the International Maritime Organization, which currently has 175 Member States and three Associate Members, had set targets to cut GHG emissions by only 50% by 2050. It contained no absolute emissions reduction targets for the intervening years.
A significant improvement came in July 2023, with the first scheduled revision of IMO’s greenhouse strategy. Member states agreed to reach net-zero GHG emissions by or around 2050 and “indicative checkpoints” that call for reducing total GHG emissions by 20%, striving for 30% by 2030, and between 70% and 80% by 2040, relative to 2008.