It has now been over a year since the International Maritime Organisation (IMO) announced that GHG emissions controls for the industry would be decided by 2018. This came off the back of businesses, industry organisations and NGOs alike, calling for determined action, and for IMO to lead the way on decarbonisation.
When that was announced, every major country had joined together to defeat the global threat of climate change by committing to the Paris Agreement. Shipping and aviation were conspicuous in their absence and needed to send a clear message to the rest of the world. Our industry needed to step up and be counted.
The withdrawal of the United States from the Paris Agreement and the subsequent condemnation directed at President Trump for his decision can be understood as a signal that the there is a global consensus around the 2°C agenda. Now is the time for the shipping industry to take clear and concrete steps towards becoming a profitable low-carbon industry within the 2°C context.
The ever-evolving trends from carriers and regulators towards decarbonised supply chains and increased transparency are demanding the industry takes accountability for such and Carbon War Room has long said that this presents a unique opportunity for the industry to profitably decarbonise. We recently saw at Nor-Shipping the scope and innovation of the emissions reduction technologies developed for the industry, both in terms of physical equipment and digital tools. However, to accelerate the move towards decarbonisation the industry needs to co-develop and integrate the physical and digital technologies by working collaboratively to understand, finance, install, and share knowledge about results and best practices. A profitable decarbonised industry is far from a pipe dream, it is achievable today if regulation can accelerate it, the market can make it possible and the industry takes accountability for contributing to its fair share.
The first step is to realise that we’re not starting from the bottom. Close scrutiny of costs and investment to create further fuel savings has been core to delivering profitable shipping operations for years. We now need to widen and accelerate our ambition and deliver the tools to make it possible. Carbon War Room has identified regulation, transparency, technology and finance as opportunity areas for progress. The IMO is working on the regulation, but business can and should be working on the rest.
There are regular conversations in industry circles about most of those points. Carbon War Room has long worked with industry progressives to make ship design and operational efficiency data transparent and free to access so that all stakeholders can better understand the market, and how fuel use can be reduced on both a macro and ship-by-ship basis. We’ve also spoken at length about the need for capital availability to retrofit vessels and make them more competitive and “future proof”, the importance of financiers scrutinising newbuild deals to ensure that they will still be viable in 10 years, and for shipping desks at banks to assess the climate risk posed to their portfolios. And of course, the advancement of technology and alternative fuels has always been an essential topic of discussion.
Critically, we need a clear, unified vision – a decarbonisation pathway laid out by the industry for the industry. It would give focus to our collective work, and define clear objectives and what needs to be achieved to meet them. The current rate of innovation and uptake of new tech and fuels will not get us to peak emissions by 2025 or meeting IMO mandated limits, therefore we need to identify the barriers to success. We must understand what is blocking investment, coordinate the availability of essential data, and plan future fuel infrastructure.
At a macro level, profitably decarbonising the shipping industry may seem like a daunting challenge especially given the industries current market issues. However, with cooperation across stakeholder groups, we can work towards smaller common goals. Rapid progress is achievable, especially in sectors such as chartering and finance where the change is in process and decision making. The time is now to refocus our efforts as an industry and work collaboratively to achieve a positive low-carbon future.