Looking for a Silver Bullet to reduce GHG emissions from maritime transport – is there a one?

Anita Mäkinen,
Adjunct Professor, PhD, Chief Adviser,
Finnish Transport and Communication Agency TRAFICOM,
Finland

While writing this, the political leaders, representatives of civil society and industry are gathered in Glasgow for Climate negotiations. There are challenges, e.g. how to keep us on a truck to achieve the temperature goal decided in Paris in 2015, and solve, how to financially support Small Island Developing States (SIDS) and Least Developed Countries (LDCs) in mitigating the impacts of climate change. However, the biggest challenge is, if we are ready to switch from fossil fuels to alternative sources of energy. Fingers crossed that decision makers finally find a balanced solution and that nobody will be left behind.

According to the 4th IMO GHG Study, the International Shipping is in charge for about 3% of all GHG emissions in the world and the trend is increasing. However, as International Shipping was excluded from the Paris Agreement, shipborne emissions were not directly discussed in Glasgow. The measures to tackle these emissions are in focus both at global level in the International Maritime Organization (IMO) and in EU.

Shipping is a global business and the IMO can provide a global level-playing field for the industry. After Paris, IMO adopted the Initial GHG Strategy in 2018, and since then a couple of short term measures have been adopted. From 2023 onwards, all existing ships must meet new energy efficiency standards: Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII). The EEXI measures CO2 emissions per transport work, considering the ship’s design parameters only without any measurement or reporting of factual CO2 emissions.

According to the Initial GHG Strategy, we have also started discussions both on alternative fuels for maritime transport and carbon pricing. The latter one through e.g. the International Maritime Research Board and Fund (IMRB, IMRF), initiatives by the Industry, levy or cap and trade. All these measures are under consideration in the Marine Environment Committee (MEPC) of IMO. Worth of noting is that industry side does not consider their proposal to be a market based measure but a short term measure to be adopted as soon as possible to facilitate research and technological development in the field of shipping.

Many are of the view that low and zero carbon fuels and sources of energy are the key in decarbonizing of shipping. However, to assess the overall climate impact of new fuels, it is important to develop a common framework for the lifecycle assessment (LCA) of the GHG intensity of marine fuels, covering both the upstream and the downstream parts i.e. from well-to-wake. Accordingly, we have started the debate on the LCA guidelines in IMO. For the deployment of alternative fuels, we need to consider also other issues such as safety, regulation, pricing, infrastructural availability, supply chain constraints, barriers to adoption etc. and this is not going to happen in a night.

IMO is about to start to update its Initial GHG Strategy for adoption in 2023. There are already proposals to strengthen the goals of the Strategy to reduce GHG emission from international shipping to be zero already in 2050, i.e. in 30 years. According to the Initial GHG Strategy, emissions should be phased out as soon as possible during this century. Thus, these proposals, initiated both by industry and a number of member states from different corners of the world, are progressive.

In parallel to IMO developments, the European Commission has taken an action to reach the European Green Deal objectives by launching the Fit for 55-package in June this year. Therein are proposals e.g. to include shipping in EU Emission Trading Scheme (ETS) and to develop a legally binding regulation for the use of alternative fuels and sources of energy, including mandatory onshore power. The aim of the Fit for 55 package is that “the price of seaborne transport should reflect the impact it has on climate change, in line with the “polluter pays” principle and in line with the objective that all key EU economic sectors should face carbon pricing”.

Digitalization and automation of the maritime sector has also been of great interest in recent years for achieving enhanced efficiency and environmental sustainability. Digitalization and further optimization of shipping activities have also major economic benefits. According to some estimates digital enhancements of shipping operations can save up to EUR 100-300 billion annually in operating costs for EU industries. Furthermore, it has been evaluated that the benefits of digitalization in the logistics sector as a whole will globally be about EUR 1 400 billion by 2025.

However, there are challenges as different actors are approaching digitalization from their own angles instead of considering how the entire industry should be transformed by digitalization. Development of overlapping systems, which do not interact, creates yet another challenge to overcome. Unfortunately, according to our findings, the industry is strongly guarding the status quo.

To conclude, there is no single Silver Bullet to reduce GHG emissions from Maritime Transport but more like a basket of measures, which all are needed in decarbonizing of shipping!

Email: anita.makinen@traficom.fi
Twitter@AnitaMakinen

Expert article 3110

> Back to Baltic Rim Economies 5/2021

To receive the Baltic Rim Economies review free of charge, you may register to the mailing list.
The review is published 4-6 times a year.