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A select number of ocean carriers and shippers are racing to meet decarbonization goals for international transportation over the next few years. And they need help.
The International Maritime Organization has adopted a plan for achieving net-zero greenhouse gas (GHG) emissions from ships “by or around” 2050. The strategy includes the adoption of alternative vessel fuels — accounting for between 5% and 10% of all energy used by international shipping by 2030 — with checkpoints for monitoring further progress between 2030 and 2040.
That might sound like a modest goal, but the industry’s use of alternative fuels is currently “just a fraction” of the number that it hopes to hit in just six years, said Ingrid Irigoyen, associate director of ocean and climate with the Aspen Institute Energy and Environment Program.
Lighting a fire under the industry will be major regulatory action by IMO in the coming months, Irigoyen said on a recent panel about shipping decarbonization at S&P Global’s TPM24 conference in Long Beach, California. IMO will issue guidelines for assessing fuel lifecycles, along with a “basket of measures” setting forth new standards for fuel usage and carbon pricing, she noted. The rulemaking will include “carrots for leaders and sticks for laggards, allowing flexibility for business while ensuring that the sector gets to its carbon budget.”
Some major ocean carriers and shippers are already stepping up. A.P. Møller-Maersk A/S, operator of Maersk Line, has moved up its target for net-zero emissions from 2050 to 2040, thanks to an investment in 25 “green” methanol-fueled ships, two of which are already on the water. Further cuts in carbon dioxide emissions will come through the adoption of electric vehicles, LEED-certified warehouses, and operational changes at marine terminals, said Lee Kindberg, head of environment and sustainability for North America with A.P. Møller-Maersk.
Maersk can’t do it alone, Kindberg said. There’s a substantial cost involved in transitioning to green fuels, and it must be borne by carriers and shippers alike. “We’re asking you to share the cost and co-invest with us,” she told TPM24, stressing the need to accelerate progress toward net-zero emissions to meet IMO’s timetable.
Thorsten Meincke, board member for air and ocean freight with freight forwarder and logistics services provider DB Schenker, said it’s crucial to accurately measure GHG emissions from ocean shipping — not just to demonstrate that mode’s environmental impact, but also to compare it with air cargo, which produces 100 times more CO2 than ocean. At the same time, Meincke says, the industry needs to begin shifting to alternative fuels, especially biofuel produced from organic waste and cooking oil. “We’re purchasing quality biofuel and trying to sell it to customers,” he said. “The majority are not willing to pay.”
IKEA is one shipper that has made a substantial commitment to greener operations. It has set a target of 2030 for cutting GHG emissions by 70% compared with the levels of 2017, said Elisabeth Munck af Rosenschöld, global sustainability manager with IKEA Supply AG.
“Our decarbonization agenda is well on its way,” Munck af Rosenschöld said, noting that the company’s average emissions levels are down by 25% over last year. “We want to be part of the solution,” she said.
Yet IKEA has no intention of remaining a pioneer. “We don’t want to be a first mover for too long,” Munck af Rosenschöld said, calling for participation by “many stakeholders across the ocean shipping industry.”
CMA CGM, another of the world’s largest container-shipping lines, has also adopted an ambitious timeline for moving away from diesel fuel. By 2028, it plans to offer both biogas and biomethanol, and eventually other types of synthetic fuels as they become available, said Heather Wood, head of sustainability for North America. Again, though, the line seeks industry and customer support in that effort. “We want to develop a roadmap with you,” Wood told her audience. “We want to position each of you as a leader in this effort.”
Munck af Rosenschöld said IKEA’s initiative comes down to three elements: “reduce, replace and rethink.” “Reduce” means working toward continued improvement in energy efficiency and cost. “Replace” is about moving away from fossil fuels in favor of greener alternatives. And “rethink” means going beyond technology and fuel to integrate new solutions that involve human innovation.
By itself, new fuels won’t get carriers to net-zero emissions in the near future. Rolf Habben Jansen, CEO of Hapag-Lloyd AG, said in another TPM24 session that both regulations and financial incentives are needed to push the industry in the right direction. “In the next five to 10 years, bringing emissions down is not going be done primarily through alternative fuels — there will be limited available quantities,” he said. “We need to maximize utilization, sail slower and continue to invest in modernization of our fleet.”
One key organization in the push for decarbonization is the Zero Emission Maritime Buyers Alliance (ZEMBA), of which Irigoyen serves as president and chief executive officer. It’s a group of ocean freight buyers, now nearly 30 strong, that came together to promote the adoption of sustainable zero-emission solutions.
Much more support from shippers is needed. “ZEMBA is working with carriers every day, trying to make this affordable,” Irigoyen said. “But if you don’t participate, it’s going to be very hard for them to take the next step to non-biofuels.”
Munck af Rosenschöld stressed the need for widespread industry participation on an expedited timeline. “This is, and has to be, the decade for action,” she said.
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