SCC: Emissions will skyrocket without urgent action from shipping industry

The shipping industry must take urgent action to meet ambitious new climate targets set by the International Maritime Organization (IMO), according to a new report from the Sea Cargo Charter (SCC).

The 2024 report, released on June 13, 2024, highlights the gap between current emissions and the IMO’s revised strategy for net-zero emissions by 2050.

New data from the report shows the sector fell short of minimum international climate goals set by the IMO by an average of 17% in 2023, equivalent to 165 million metric tonnes of CO2e.

When considering ‘striving’ goals set by the IMO, signatories are on average 22% misaligned, which represents a shortfall of 204 million metric tonnes of CO2 emissions in 2023.  

Specifically, in these scores, negative values indicate alignment with decarbonization trajectories, while positive values denote misalignment.

The simple average score for climate alignment was 16.9% misaligned with the IMO’s ‘minimum’ ambition, with scores ranging from -16.5% to 47.6%. For the IMO’s ‘striving’ ambition, the simple average score was 21.9% above the target, with scores ranging from -14.8% to 54.7%, the SCC noted.

Factors that influenced these scores include the challenges of adapting to longer journey times following geopolitical disruptions, changing operational parameters in ports, commercial choices such as energy-saving retrofit programs, instructed speed, laden/ballast ratio, and deadweight tonnage (DWT) utilization on laden voyages.

According to the SCC, dry bulk, general cargo, and tankers currently account for around 400 million tonnes of CO2 emissions. With global trade predicted to quadruple by 2050, emissions will skyrocket without urgent action, the SCC highlighted.   

Despite the misalignment with the IMO’s revised emissions targets, the report also reveals promising trends.

The number of SCC signatories has grown to 37 in 2024, 35 of which are reporting this year, demonstrating a growing commitment to sustainability and transparency within the industry, according to the SCC.

Furthermore, the average reporting percentage has shown a steady increase over the past three years, from 80% in 2022 to 93.2%. This year’s report shows that industry collaboration and data sharing are improving.   

“The Sea Cargo Charter’s expanding coverage of reporting is a testament to its commitment to transparency and accountability, setting a new standard for environmental reporting in the shipping sector,” said Sea Cargo Charter chair Rasmus Bach Nielsen and global head of fuel decarbonization at Trafigura. 

“As the Charter continues to attract new members and shape market practices, it underscores the importance of integrating climate considerations into business decisions. These efforts not only enhance emissions transparency but also propel the maritime industry towards a more sustainable future, at a time when action is needed more urgently than ever before.” 

From next year, shipowners, not just charterers, will for the first time also be fully able to form part of the annual report, further enhancing transparency across the entire shipping value chain. 

To remind, last month, the SCC expanded its scope to accelerate shipping’s energy transition.

The Sea Cargo Charter is a global framework for assessing and disclosing the climate alignment of chartering activities. Developed by the Global Maritime Forum (GMF), it establishes a common, global baseline to quantitatively assess and disclose whether chartering activities are in line with climate goals set by the IMO.

Furthermore, the SCC enables signatories to quantitatively evaluate and disclose whether their chartering activities align with internationally adopted climate goals. Moreover, it serves to support responsible decision-making. 

With 37 signatories already on board, this expansion aims to increase the initiative’s impact on transparency and shipping decarbonization across the entire industry by allowing charterers and shipowners to monitor and report their emissions under a common framework.  

“The shipping industry has a long way to go, but with continued transparency, commitment, and innovation, it can navigate a more sustainable future,” the report concluded.