Can shipping go beyond the COP28 razmataz and deliver on net zero targets?

Following a day of active discussions at the Shaping the Future of Shipping: Delivering a Net Zero World summit yesterday, 60 maritime organisations and government partners agreed on a course to deliver the IMO’s net-zero strategy at Shaping the Future of Shipping, an event hosted by the International Chamber of Shipping and the government of the UAE on the side lines of COP28 in Dubai.

Over 300 leaders, that included over 30 nationalities from across the world, from the entire energy-maritime value chain convened, to work together to deliver a robust regulatory outcome at the IMO negotiations in March 2024 at MEPC81. The summit built on the discussions that have taken place throughout COP28, to determine ambitious solutions to advance infrastructure, fuel availability and financing.  

The summit was part of the COP28 presidency program and hosted under the patronage of the UAE Ministry of Energy and Infrastructure. The event was organized by a coalition of leading maritime industry bodies and coordinated by the International Chamber of Shipping (ICS), in partnership with the Emirates Shipping Association.

“Decarbonization is bigger than any one industry or government but what is clear is that to be successful in meeting our climate targets the world will need shipping. We know that there are always announcements and noise here at COP meetings, but beyond the razmataz, there are detailed negotiations and talks. This is what today was about,” Emanuele Grimaldi, Chairman of the International Chamber of Shipping, opened the summit saying.

“There is hope. The options are available and the time for action is now. At the same time our synthesis report of most of this year provided a warning. The current pace and the scale of climate action are insufficient to tackle climate change. And as you shape the future of shipping remember that our choices will reverberate for hundreds even thousands of years,” Anders Hammer Strømman, Lead Author Transport 6^th Assessment Report, Intergovernmental Panel on Climate Change, said.

“It is the organizations that are sitting in this room today that hold the key in the future of shipping, and it is imperative that we tackle this head-on from all angles by innovating and by developing and scaling next generation fuels, engines and vessels and the ability to carry new fuels like hydrogen, ammonia,” Capt. Abdulkareem AlMessabi, Chairman, Emirates Shipping Association, said.

“Yes, we have the IMO Strategy, it was a great achievement last July. But it is what comes next, what are we going to start doing to make that a reality? At IMO we haven’t stopped. We are already carrying out the impact assessment on the fleet and on States in order to provide the necessary information for the marine environment protection committee meetings that will take place next year and that will lead us to those measures that will be adopted by 2025, implemented in 2027 and that will make these objectives of the strategy a reality, both technical and economic measures,” Arsenio Dominguez, International Maritime Organization Secretary General Elect, said.

Some of the concrete partnerships and actions announced at COP28 include the establishment of the Zero Emission Port Alliance (ZEPA) by Maersk’s APM Terminals and the UAE-based port developer and operator DP World.

The industry-wide strategic coalition aims to accelerate the journey to zero emissions for container handling equipment (CHE) at ports. ZEPA membership is open to all industry participants, including terminal operators, original equipment manufacturers (OEMs), port authorities, and government entities.

The Chief Executive Officers (CEOs) of leading global shipping lines have issued a joint declaration at COP 28 calling for an end date for fossil-only powered newbuilds and urging the International Maritime Organization (IMO) to create the regulatory conditions to accelerate the transition to green fuels.

In addition, green hydrogen producers have agreed to produce 11 million tons of the low-emissions fuel for use by the shipping sector by 2030 as part of a Joint Commitment that aims to enable the use of renewable hydrogen-derived shipping fuel this decade to meet maritime industry decarbonization targets.

The Joint Commitment, organized by the UN High-Level Champions and RMI, was signed by thirty leaders in the shipping sectors, including cargo owners, ship operators, ports, bunkering companies, and equipment manufacturers.

Furthermore, several green shipping corridors have been announced on the sidelines of COP28, including the one planned by the U.S. and Denmark in five countries in the Global South.

COP28 also witnessed the launch of a global decarbonization charter, which was inked by 50 oil and gas companies in a bid to speed up climate action is seen as a step in the right direction, which will have a high-scale impact within the industry.

That being said, the International Energy Agency (IEA) made an analysis on the pledges made during the summit and what their full implementation would mean for the global climate targets.

As of Friday 8 December, around 130 countries had signed up to the pledge to triple global renewable power capacity by 2030 and double the annual rate of energy efficiency improvements every year to 2030. Those countries together account for 40% of global carbon dioxide (CO2) emissions from fossil fuel combustion, 37% of total global energy demand and 56% of global GDP.

In addition to the potential impact of those pledges, the IEA has assessed what the effect would be of the full implementation of the methane pledge of the Oil and Gas Decarbonisation Charter, which is to zero-out methane emissions and eliminate routine flaring by 2030. The 50 companies that have signed up to it account for about 40% of global oil production and 35% of combined oil and gas production.

IEA analysis shows that the full delivery on these pledges – covering renewables, efficiency and methane/flaring – by the current signatories would result in global energy-related greenhouse gas emissions in 2030 being around 4 gigatonnes of CO2 equivalent lower than would be expected without them (based on the Stated Policies Scenario in the IEA’s World Energy Outlook 2023).

This reduction in 2030 emissions represents only around 30% of the emissions gap that needs to be bridged to get the world on a pathway compatible with limiting global warming to 1.5 C (the IEA’s Net Zero Emissions by 2050 Scenario).

As COP28 unfolded with its overarching theme of phasing out fossil fuels and addressing the pressing need for a sustainable energy transition, a discordant note struck a dissonant chord. Namely, reports of the president of COP28, Sultan Al Jaber‘s dismissal of the ‘scientific’ imperative behind fossil fuel phase-out, coupled with his assertion that such measures would regress the world into an era akin to caves, reverberated through the summit.

His comments, deemed by experts as “incredibly concerning” and verging on climate denial, stood in stark contrast to the resolute position expressed by UN Secretary-General António Guterres, who unequivocally emphasized the necessity to phase out all fossil fuels to limit global heating to 1.5°C.

Furthermore, countries like Saudi Arabia and Russia, both members of OPEC and OPEC+, emerged as formidable opponents to a fossil fuel phase-out deal at COP28, according to reports from Reuters citing a letter from OPEC Secretary-General Haitham Al Ghais this week urging country members to reject any COP28 deal targeting fossil fuels.

The European Union’s climate chief, Wopke Hoekstra, voiced strong criticism against OPEC’s attempt to derail discussions on phasing out fossil fuels. The oil producers’ club’s move was labeled as “unhelpful” and “out of whack,” drawing sharp rebuke from Hoekstra.

“We need to peak global emissions by 2025, at the latest.

We must reduce global emissions by 43% in this decade.

We do need to reach net-zero CO2 in the early 2050s, and deep and rapid emissions reductions in any other greenhouse gas emissions.

We also need NDC’s which are in line with a 1.5-degree pathway, going beyond current NDCs and reflecting the highest possible ambition,” Hoekstra said in a speech delivered at COP28, demanding for a phase-out of fossil fuels subsidies that do not address energy poverty or just transition.

More than 100 countries, including the EU, the United States, and climate-vulnerable island nations, have rallied behind the call for fossil fuel phase-out, recognizing the urgency of deep and rapid cuts to curb escalating climate impacts. That being said, the clash of perspectives highlights the complex interplay between environmental imperatives and economic interests.