Shipping’s share of CO2 looks to be heading down and not up

Malcolm Latarche

Malcolm Latarche · 15 November 2019

ShipInsight


This week the IMO ‘s Intersessional working group on GHG is once again meeting in London. It is too early to say what the outcome of the meeting may be or what recommendations may go forward to a future MEPC.

What we do know is that there will once again be pressure from environmental groups and organisations that will seek to limit speed, limit power, put a price on carbon or any one of a number of measures that will impose further burdens on what is widely acknowledged to be the cleanest form of transport for goods and commodities.

Exactly how much CO2 is caused by shipping is open to question. In 2000, the First IMO GHG Study on GHG emissions estimated that ships engaged in international trade in 1996 contributed about 1.8 per cent of the world total anthropogenic CO2 emissions.

In the second study in 2009 study the figure was increased to 2.7% for 2007 - although uplifted later to 2.8%. By 2014 and the third GHG study the figure for 2012 was down to 2.2%. Because of measures such as the EEDI rules and a general decline in world trade, the next lot of figures could be even lower.

Nevertheless, the figure usually quoted in mainstream media reports is somehow lifted to nearly 3% and compared to the total output of a modern economy such as Germany. Of course comparing the whole world’s shipping business to a country is a nonsense and not something that is done for other industries apart maybe from aviation. The argument usually given for doing that is because shipping and aviation were not included in the Paris Agreement on national voluntary reduction measures.

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There seems to be an unstinting belief in nations abiding by their Paris commitments and for that reason the argument is that shipping will continue to be contributing an ever growing proportion of total CO2 emissions. It has even been suggested that by 2040, shipping will be responsible for anything between 17% and 25% of total CO2 emissions.

However, it s looking more and more likely that the actual situation could be very different from that scenario. Shipping is taking action to cut its CO2 emissions on both voluntary and regulatory bases. Firstly, the EEDI rules dictate a gradual reduction for new buildings. Then the impending 2020 sulphur rules has seen a small acceleration in the use of LNG as a fuel. LNG is not entirely CO2 free but it is considered to cut emissions by around 12-20%. There has also been growing interest in hybrid vessels. Certainly the small number and size of the current generation of hybrid vessels will make only an imperceptible dent in overall emissions but it is a start.

Some owners’ organisations have even intimated that a cap on power might be acceptable. That may suit some owners but it will not find favour with all. Those that want to do it are of course free to do so but it is doubtful they will for a variety of reasons.

It is, however, events outside of shipping which are likely to ensure that shipping’s share of CO2 emissions will shrink rather than grow over the next 20 years. The Paris Agreement was trumpeted as a breakthrough moment when it came but its reputation – and those of the states that gave it such support at the time seem to have become a little tarnished as political reality bites.

Just recently, the US pull out from the agreement was confirmed and on 4 November 2020 will become final. In the meantime, the US will likely just ignore it as it has done for the past three years. Australia could be next to follow suit and who knows who may follow.

This year has seen some increasingly vociferous and disruptive campaigns by environmental groups. However, the patience of the public is wearing thin as evidenced by events in London where climate protesters were dragged and beaten by angry crowds. France has seen almost a year of civil disobedience that began as a result of taxes introduced as part of a move to reduce CO2 emissions from personal transport. More recently, protests in Chile for much the same reason have even caused a UNFCC meeting planned there to be switched to Spain.

In Africa there have been environmentalist protests as leaders of African oil and gas producing states attended the Africa Oil Week conference in Cape Town. Where European heads of states may express sympathy with environmental lobbyists, the rhetoric from African leaders was very much the opposite as shown by the quotes below reported by Voice of Africa.

“Under no circumstances are we going to be apologising,” said Gabriel Obiang Lima, energy minister of Equatorial Guinea. He added that African countries need to use their oil resources to create jobs and increase economic development. “Anybody out of the continent saying we should not develop those fields, that is criminal. It is very unfair,” he said.

“Energy is the catalyst for growth,” said Gwede Mantashe, South Africa’s energy minister. He also is national chair of the ruling African National Congress. “They even want to tell us to switch off all the coal-generated power stations,” he said. “Until you tell them, ‘you know we can do that, but you’ll breathe fresh air in the darkness’.”

Gabon’s minister for hydrocarbons Noel Mboumba noted that oil is a major driver of development. “We will do all in our power to develop it,” he said.

Then there is Asia. Coal demand there is expected to double to almost 400 million tons a year by 2040, the International Energy Agency said in its Southeast Asia Energy Outlook published two weeks ago. That’s 2.5% higher than its forecast from two years ago, even as renewable power capacity is seen more than tripling through 2040.

“Coal is rather resistant because it is affordable,” said Keisuke Sadamori, IEA’s director for energy markets and security. “It’s really hard for Southeast Asian countries to move away from affordable coal immediately.”

The main reason for coal’s continued importance in the region is expectations for massive overall energy demand growth as populations continue to increase and become wealthier. Even though new renewable energy capacity is forecast to be installed at about twice the rate of coal through 2040, fossil fuels will still represent about 75% of total energy demand in 2040, according to the IEA.

On a global scale, the IEA reports greenhouse-gas pollution has risen for a second year. “The findings in the International Energy Agency’s annual report on energy paint a grim outlook for efforts to rein in climate change and mark a setback for the increasingly vocal environmental movement,” according to Bloomberg. Strong economic growth, surging demand for electricity and slower efficiency gains all contributed to a 1.9% increase in carbon dioxide emissions from energy in 2018, the IEA said.

seen a move by lawmakers to set net zero emissions targets, particularly in Europe. Their ambition is to balance out growth in the developing world and to deploy technology that soaks up the pollution that can’t be avoided.

“Something is not right with the system when investments into fossil fuels continues even though, according to the Paris Agreement, they are supposed to be phased out by 2050,” Mette Kahlin McVeigh, director of the Climate Programme at Swedish research group Fores. “Either the political policies are too weak or the world does simply not believe it needs to change.”

If the forecasts by the IEA are correct, and there is no reason to doubt it, and if the people in different nations are actually opposing the changes necessary to reduce emissions to the levels agreed in Paris, it could well be that shipping’s share of CO2 emissions may not be 17% by 2040 but very likely something lower than they are today.

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