Shipping: climate-neutral by 2050

Shipping associations have committed to zero CO2 emissions by 2050. However, the sector faces major challenges before shipping becomes climate-neutral. Read here to find out how this could be achieved.

On July 7, 2023, the International Maritime Organization (IMO) agreed to reduce greenhouse gas emissions to zero by around 2050. The decision was taken in London after lengthy deliberations. There are also interim targets with milestones for the years 2030 (at least a 20 percent reduction) and 2040 (at least a 70 percent reduction).

The World Shipping Organization’s new climate protection roadmap provides for a price on greenhouse gas emissions such as CO2 from 2027. Global standards for climate-friendly fuels for ships are also to be developed. As a specialized agency of the United Nations, the IMO has the power to prescribe globally binding rules for shipping. Previously, the organization only envisaged a 50% reduction by 2050.

Accordingly, the decision to achieve climate-neutral shipping by 2050 was viewed very positively. The member states have thus recognized that there is no alternative to climate neutrality. The organization’s new climate strategy literally states: “Greenhouse gas emissions from international maritime transport should peak as soon as possible and be reduced to zero by or around 2050, i.e. close to 2050, taking into account different national circumstances.”

Despite the success, it became clear during the long negotiations that there are major differences between the 175 member states of the IMO. The decision not to set a fixed target for 2050 is therefore considered a compromise formula that made the agreement possible in the first place. Due to their geographical location and economic conditions, some countries cannot or do not want to set the same pace for climate-neutral shipping as the member states of the European countries, for example. As a result, minor deviations are possible when it comes to achieving climate neutrality.

According to Nabu, the IMO has missed a great opportunity, as the agreed reduction targets do not correspond to the 1.5-degree target of the Paris Agreement. This makes it all the more important to implement an international CO2 price for shipping. The IMO supports such pricing, but has not yet commented on which instrument could be used for this. A direct climate tax on CO2 emissions or a system for verifying and trading emissions are conceivable.

The EU is one of the parties seeking such a system for the shipping sector. According to the IMO, a “pricing mechanism for maritime greenhouse gas emissions” is to be adopted by 2025 and come into force in 2027. This should reinforce the message to the shipping industry and fuel manufacturers that the time to invest is now. An internationally standardized regulation for emissions pricing would be ideal.

In addition to taxation or penalties on CO2 emissions, there is another way to make shipping climate-neutral, namely by using other fuels and energy suppliers. In 2021, for example, the first commercial container ship was refueled with a CO2-neutral synthetic gas. Before that, the “ElbBlue” ran on fossil liquefied natural gas (LNG). The new fuel is produced chemically by generating hydrogen using wind energy. Excess CO2 comes from a biogas plant to create a chemical reaction that produces climate-neutral SNG (Synthetic Natural Gas). There are no fossil fuels in the entire production chain.

In Germany, the federal government is promoting research and development into future energy sources in the shipping industry. In addition to SNG, ammonia, hydrogen and methanol are also being considered. The problem is that it is not yet profitable to refuel ships with the climate-friendly SNG fuel. This is because its price is around five times higher than that of fossil liquid gas. There is also a lack of production facilities and the necessary infrastructure for refueling. Nevertheless, no major technical conversion is required for the changeover.

Individual shipping companies and businesses have climate targets that are even more ambitious than the IMO targets. For example, the Danish container shipping company Maersk and the cruise line Aida Cruises want to operate climate-neutral shipping by 2040 and the German company Hapag-Lloyd by 2045. As many of the largest boats emit several hundred tons of CO2 per day, there is great potential for reduction here.

Around 90 percent of global trade in goods is now handled by ship. The huge container ships are powered by heavy fuel oil or marine diesel, and some are also powered by liquid LNG. Although LNG has a slightly better carbon footprint, it is still a fossil fuel that emits greenhouse gases and is also unhealthy for the sea. Overall, international shipping is responsible for around 3 percent of global CO2 emissions.

Various factors play a role in climate-neutral solutions in shipping. These include weight, space requirements and fuel availability. Batteries have so far only been used in shipping for short distances. For example, the Scandlines shipping company is planning to operate a battery-powered ferry between Denmark and Germany in the near future.

For longer distances, fuels such as ammonia or methanol are more realistic, although ammonia is currently still too dangerous. Green methanol has better prospects in the medium term, as does hydrogen. New ships, new engines and new infrastructure will be needed, which will probably affect the cost of shipping and the price of goods. Further savings are possible through improved routes and mechanical optimization of ships as well as intelligent port selection. The IMO’s decision to make this transition fair and equitable will thus be put to the test.

Read more: When it comes to the ocean, there’s no getting around discussing sea level rise – MVRDV presents proposed solutions to sea level rise in Vancouver.