Shipping industry seeks response to calls for cuts in emissions
World’s fleet under renewed pressure to clean up its act and curb greenhouse gases
Plans to cut the greenhouse gas emissions from the world’s shipping fleet will be discussed in London this week as the industry comes under renewed pressure to clean up its act.
Delegates to the International Maritime Organisation, a UN agency that regulates shipping, will study proposals from countries including France and Japan that would have a significant impact on global trade flows over the next decade.
The IMO last year set a target of cutting emissions by at least 50 per cent by 2050, and to begin to reverse rises in emissions as soon as possible. Shipping is a highly polluting industrial sector that has proved difficult to decarbonise. The world’s ships contribute 2-3 per cent of greenhouse gas emissions, burn dirty heavy fuel oil and belch out a cocktail of toxic pollutants.
The IMO delegates will debate a French plan for a speed limit on tankers and bulk carriers that is one knot below current average speeds by 2025. Experts agree so-called “slow-steaming” would cut emissions, but it also means ships have to spend longer at sea, increasing costs.
Faig Abbasov, analyst at the Transport and Environment consultancy, has calculated that speed reductions of 20 per cent would cut emissions by close to a third.
Trafigura, the commodities trader, said the French measure was “low hanging fruit” that could be used before new technologies to cut emissions more radically become available. “If you want significant reduction of CO2 emissions in the next five to eight years then slow-steaming is the only solution,” said Rasmus Bach Nielsen, Trafigura global head of wet freight.
Mr Bach Nielsen also said “enforceable penalties” would be needed to ensure industry compliance.
Operators are largely in favour of the speed limits. “It would reduce capacity so you would need more ships,” said Brian Gallagher, head of investor relations at Euronav, a tanker company.
However, the speed measure would constitute a significant change for an industry that is the lifeblood of the global economy. About 90 per cent of global trade is seaborne and slow-steaming would mean the transport of goods by sea takes longer and becomes more expensive.
The trade war between the US and China has already led to a drop-off in activity that has reduced seaborne trade. Higher shipping costs could mean that some forms of trade become more regional.
Some believe it is unfair to apply a single speed limit to carbon-intensive and more energy-efficient vessels equally. “There is no such thing as a one-size-fits-all approach to improving energy efficiency,” said UK Chamber of Shipping, an industry body, adding that incentivising innovation should be the priority.
The IMO delegates will hear alternative proposals from Japan and Norway that would allow companies to decide how to meet energy efficiency targets by using cleaner fuel or more efficient vessels. But Mr Abbasov said such proposals would create “loopholes” that would allow ships to abandon their targets in the face of bad weather or other difficult conditions.
Measures such as making ships more streamlined or using wind power propulsion would curb emissions. But these are largely interim solutions. Analysts believe the IMO target can only be met by introducing zero-emissions fuels such as hydrogen and ammonia, although these are at least a decade away from commercial viability.
Liquefied natural gas-powered ships whose emissions are 25 per cent lower are already in use but many operators are reluctant to buy them because of the higher cost and insufficient reduction of emissions to meet the 2050 target.
Johannah Christensen, managing director of the Global Maritime Forum, an industry non-profit group, said more radical ideas such as a carbon levy were needed to incentivise the development of green fuels. “Ocean-going vessels that are powered by zero emission fuels must start entering the global fleet by 2030,” she said.