Large shipping companies want to accelerate the decarbonization of international shipping

(Dubai / United Arab Emirates) – Every year, around 100.000 ships, powered by 300 million tons of fossil fuels, move eleven billion tons of goods around the world. This makes shipping responsible for around 1.076 million tons of CO2 emissions per year – about three percent of global greenhouse gas (GHG) emissions.

The international shipping organization IMO (International Maritime Organization) adopted a strategy to reduce emissions around six months ago. The UN organization's goal is to reduce GHG at sea by at least 2030 percent by 20, 2040 percent less CO70 emissions by 2 and then almost zero around 2050. One way to achieve this is fuels from renewable energies.

Decarbonization strategies

This plan was also reflected at the UN World Climate Conference in Dubai (COP 28). One of the numerous workshops under the umbrella of the UNFCCC (United Nations Framework Convention on Climate Change) dealt exclusively with the decarbonization of international shipping. Accordingly, the goal of introducing a five percent share of emission-free fuels by 2030 is achievable. However, this still requires major international efforts.

In a now published paper “Accelerating decarbonization of shipping sector with hydrogen-based fuels” some work tasks have been identified. For example, a timetable should be drawn up for achieving the said five percent share. To do this, the ports would have to prepare for the handling of new fuels. It is particularly important to “find an intelligent way” to accelerate the approval process globally. Pricing mechanisms and political frameworks need to be developed in order to ultimately create demand and thus offer investors and fuel suppliers more security. This requires “green maritime corridors” and government support in procurement, including, for example, from the respective navies of individual states.

In addition, cross-value chain collaboration should be strengthened. The working group named around six years as the necessary time horizon for the trust-building measures at all levels of the supply chains. Finally, it calls for promoting concrete actions by key players in the shipping ecosystem to advance the adoption of green fuels.

Large shipping companies are calling for an exit from fossil fuels

The CEOs of the world's largest shipping companies Mærsk, CMA CGM, Hapag-Lloyd, MSC and Wallenius Wilhelmsen called on politicians in a joint statement to set a concrete phase-out date from which no new ships could be built that run solely on fossil fuels. At the same time, the IMO should “create the regulatory conditions to accelerate the transition to green fuels”. This must be done on a large scale and at an accelerated pace. The CEO calls for the creation of several “regulatory cornerstones”:

• Setting an end date for new construction of fossil fuel-only ships to increase confidence for investment in both new ships and green fuel supply infrastructure.
• Establish an effective GHG pricing mechanism to make green fuel competitive during the transition period; for example through taxes on fossil fuels, which are used as bonuses for green fuels. In addition, the revenue generated by the mechanism should go to an RD&D (Research, Development and Demonstration) fund and be used for investments in developing countries.
• Option to pool ships for GHG compliance, counting the performance of a group of ships rather than just individual ships from fleets, to ensure investments are made where they achieve the greatest reduction.
• Regulation based on technical life cycles to align investment decisions with climate interests and reduce the risk of stranded assets.

“Climate change is a general concern, not a competitive issue,” says Rodolphe Saadé, Chairman and Chief Executive Officer of CMA CGM Group. The coalition of the world's leading shipping companies is "an ambitious milestone for the decarbonization of our industry." The CMA CGM Group has already invested almost $15 billion in the decarbonization of its fleet. “This will enable us to operate nearly 2028 ships on decarbonized fuels by 120.”

At MSC, the fleet renewal strategy includes 100 dual-fuel ships. The support of governments around the world is "an essential element in achieving our shared goal, and among these efforts we want to see an end to the supply of ships that run solely on fossil fuels," said Soren Toft, CEO of the MSC Mediterranean Shipping Company.

At the end of the year, the Danish shipping company AP Moller-Maersk signed a letter of intent in Japan with the city of Yokohama and Mitsubishi Gas Chemical (MGC) to secure bunkering capacity for green methanol. The company had already presented a dual-fuel container ship last year. Another 16.000 TEU (Twenty Feet Equivalent Containers) vessel will enter the fleet in February, with more to follow later this year. As reported, a total of 25 ships of this type are to be put into operation. Implementation depends heavily “on the establishment of a port bunkering infrastructure for methanol worldwide,” says Toru Nishiyama, Managing Director of Maersk Northeast Asia.

As part of the workshop, Höegh Autoliners also announced investments of 1,2 billion dollars (1,09 billion euros) in twelve new ammonia-free car transporters, as well as the intensification of cooperation with Yara Clean Ammonia and Sumitomo Corporation to ensure sufficient volumes of the to secure the necessary fuel.

Yara Clean Ammonia and North Sea Container Line would launch the world's first clean ammonia-powered container ship in 2026, while Maersk announced investment in a major environmentally friendly methanol production facility in Spain.

The IMO strategy is available free of charge as a PDF.

Photos
The member states of the International Maritime Organization have decided to reduce greenhouse gases from ships. © International Maritime Organization (IMO)