Shipping – leading the way or lagging behind on CO2?

Malcolm Latarche
Malcolm Latarche

29 August 2018


Shipping is often accused of being conservative and slow to embrace new thinking. With particular regard to CO2 emissions, our industry has been cast as an intransigent villain although in all fairness, it is not the industry which makes the rules but member governments of the IMO and other international organisations.

The industry has had very little input into international agreements on CO2 reduction which first got underway with the Kyoto protocol in 1997. Although shipping has been said to be a major contributor on CO2 emissions on par with countries the size of Germany, the industry, along with international aviation, has been specifically excluded from any agreements from Kyoto through to the Paris Agreement in 2015. Shipping organisations may have made covert representations to governments and national delegations over the years, but no one can seriously believe that the shipping industry in other than a very few countries was so powerful as to be able to determine the policies of entire nations.

Despite shipping not having been required to act in the way that signatory nations to Kyoto and Paris may have been, the industry has never been spared accusations of inaction by environmentalist NGOs. Unlike every other user of oil and gas, shipping it seems was completely unwilling to act in the spirit of Paris and commit to a reduction in CO2 that would allow the under 2°C target to be met.

Those accusations conveniently overlook the fact that shipping is the only industry with a global target for CO2 reduction; and more to the point some aspects of that target were put in place well before the Paris Agreement – which really has nothing binding on nations – was ever cobbled together.

Shipping’s version of Paris is arguably the requirement for each ship to have its own energy efficiency management plan or SEEMP and that was made mandatory for ships above 400gt at the beginning of 2013. On top of that, the EEDI requirements that require new vessels to meet ever stricter CO2 reduction levels was agreed in 2011 with 10% reduction steps due in 2015, 2020 and 2025 resulting in ships built after that date being at least 30% less polluting than vessels built before the EEDI came into effect.

Earlier this year the IMO made a decision to pursue even more ambitious targets when the current end phases of EEDI is reached. Nothing concrete has yet been put into regulatory form but the intention has been clearly signalled and the EEDI experience is proof that shipping’s governing bodies do deliver on pledges made.

This year and the month of August in particular, has shown that the world outside of shipping is clearly less committed to reducing CO2. The US has pulled out of the Paris Agreement after electing a president who promised on the campaign trail to do just that. That decision seems to have made politicians elsewhere take a long hard look at their own nations commitments to Paris and has triggered a number of events and announcements this past month.

In Australia, Prime Minister Malcolm Turnbull was deposed by his own party which in general has more sceptical views on the subject of climate change than Turnbull had. Scott Morrison, the new Australian PM has a history of supporting fossil fuel interests although most recently his views have apparently become closer to Turnbull’s who was a supporter of the Paris Agreement. Turnbull’s demise has been blamed on the rising cost of power for ordinary Australians making levies on fossil fuels and subsidies for wind and solar unpopular amongst a large sector of the electorate. Recent Polls had underlined the unpopularity of the government under Turnbull making a leadership change before the next general election almost inevitable.

In Europe too there have been developments related to CO2 reduction targets. Four years ago, EU member states committed to a target of 40% reduction of CO2 by 2030 compared to 1990 levels. That followed by the Paris agreement the following year was arguable the high point of ambition in Europe.

Recently, the EU floated the idea of increasing the commitment to 45% with some countries reportedly being in favour of even higher targets up to 55%. Some eastern European members have baulked at this and they found an unexpected ally recently when German Chancellor Angela Merkel was quoted in several media sources as having rejected the idea of adopting new targets.

In an interview on German TV station Tagesschau at the weekend, Merkel said “I am not so happy about the new proposals because many member states today do not comply with what they have already promised,” she said “We should first reach the goals we have already set. I don’t think that constantly setting new targets makes sense.”

It should not be forgotten that Germany is the main economic performer in the EU and around 40% of its energy comes from burning coal. Since dropping nuclear power in the wake of the Fukushima disaster, Germany has been building many new coal-fired power stations to the dismay of environmentalists. German industrial organisation have however taken a different view and were opposed to the idea of higher CO2 reduction targets. Germany will not meet ambitious targets it set for itself to meet by 2020. Last month, Merkel said Germany’s existing 2030 target would be “very, very challenging” to meet.

Germany is not the only major European nation to appear to be rowing back on commitments. Although France has not made public any plans to relax its ambitions - it might be hard to do after being the birthplace of the Paris Agreement – but things are clearly not moving as fast as some might hope.

One of those dissatisfied was France’s environment minister Nicola Hulot who unexpectedly and dramatically resigned from the Macron government earlier this week. Hulot who has strong green credentials told the radio station France Inter that he had taken the decision to quit the government, because he felt alone in pushing for more ambitious climate policies and an energy transition to take place in France. “I don’t want to lie to myself any more. I don’t want to give the illusion that my presence in the French government shows that we are doing what it takes to face these challenges. I have taken the decision to leave the government,” he said.

Taken together with the IMO’s new ambitions, these recent political machinations seem somewhat at odds with the view that shipping is the laggard when it comes to reducing greenhouse gas emissions. Shipping is already committed to a 30% reduction for new ships by 2025 and although the full effect of that will not be seen until ships built prior to that leave the world fleet, the industry has clearly been set upon a path in the right direction.

On the other hand, it has to be said that ambitions will remain just that if new technologies are not developed far faster than they have been to date. Shipowners can only build ships using technologies that are available and as yet nothing other than nuclear power would allow ships to be completely free from greenhouse gas emissions at some level.