A call for action for a decarbonised future shipping industry was made yesterday by more than 30 industry leaders at the Global Maritime Forum’s (GMF) annual summit in Hong Kong.
Citing support for the IMO’s decarbonisation ambitions, the 34 CEOs recommended that the IMO’s Roadmap to a decarbonised future be aligned to seven core principles: ambitious, predictable, market-oriented, technology-enabling, urgent, coherent, and enforceable.
The CEOs recommend that core principles of the “Roadmap” for transition to a new zero-emission future be:
- Ambitious: The Strategy should be consistently in line with the Paris agreement’s temperature goals.
- Predictable: Regulations should provide long-term certainty for financiers, builders, owners and charterers to make the required investments in low-carbon technologies.
- Market-oriented: Emissions reduction objectives should be met at the lowest possible cost, and the industry should explore the use of carbon pricing and other mechanisms that can create economic value from GHG emission reductions.
- Technology-enabling: The Strategy should accelerate the use of low-carbon technologies and fuels by encouraging significant funding flows for research and development.
- Urgent: Certain mid- and long-term measures will require work to commence prior to 2023, including the development of zero-emission fuels to enable implementation of decarbonization solutions by 2030.
- Coherent: Solutions implemented should build on and reinforce existing technical, operational, and energy efficiency measures whilst maintaining or enhancing safety standards. In this context it is critical that all IMO environmental regulations be compatible with future 2050 regulations.
- Enforceable: Legally binding, enforceable actions set by the IMO and enforced by member countries are required to compel the industry to shift.
The signatory CEOs believe that a shift to a low-carbon economy by 2050 has the potential to create new opportunities for business through both technological and business model innovation. The shipping industry must rise to the biggest technology challenge in 100 years, and regulations should provide long-term certainty for financiers, builders, owners and charterers to make the required investments in low-carbon technologies. CEOs accept the need for transparency to help drive change.
“Global seaborne trade’s transition to a low-carbon future will propel both technological and business model innovation. The right incentives for accelerated investment into R&D can only come about if we get a global IMO based regulation. We invite stakeholders from the entire maritime spectrum to join us on this new journey,” said Claus Hemmingsen, Vice CEO of A.P. Moller – Maersk
A statement issued by the Denmark-based GMF said emissions reduction objectives should be met at the lowest possible cost, and the acceleration to the use of low-carbon technologies and fuels will require significant funding flows for research and development. The industry should explore the use of carbon pricing and other mechanisms that can create economic value from greenhouse gas emission reductions.
“An ambitious strategy consistent with the Paris Agreement temperature goals will require zero emission vessels to be entering the fleet in 2030 and form a significant proportion of newbuilds from then on. Different solutions have different benefits for different types of ships, it is important that solutions are not only viable from a commercial perspective but are also technically feasible and can be safely adopted and operated,” said Alastair Marsh, CEO of Lloyd’s Register.
The statement quotes Tristan Smith, Reader in Energy and Shipping at University College London as saying “Decarbonisation of shipping means a new fuel supply chain in the medium-long term, and likely new infrastructure and onboard equipment. Current evidence is that, if properly aligned with the wider global shift to renewable energy, this should be achievable with negligible long-term impact for many end consumers and global trade. But it will need patience, cooperation and collaboration between many different stakeholders for this to happen.”
The initial greenhouse gas strategy adopted by member states of the IMO in April 2018 constitutes a crucial step on the long road towards climate-friendly seaborne trade. It has the full support of the signature CEO’s. They stress that legally binding, enforceable actions set by the IMO must be enforced by member countries to compel the industry to shift and they are committed to work together with the IMO to make the strategy a success.
The CEOs urged their peers to join them in seizing the opportunity to innovate and lead the transition to a new shipping industry for the 21st century. The call to action in support of decarbonisation is already being followed up by concrete action. The GMF is working together with financial institutions, shipowners, Rocky Mountain Institute, and University College London, on a set of principles for the inclusion of climate alignment and climate risk considerations in lending decisions.