Maersk: Massive Innovative Solutions Must Happen in Next 5-10 Years

At the end of last year, the world’s largest shipping company Maersk revealed plans on becoming a carbon neutral company by 2050.

The efforts are in line with the shipping industry’s push to halve its carbon footprint by 2050 compared to 2008.

“We do not by net-zero refer to off-setting CO2 emissions from fossil fuels. By committing to this target, we believe we will drive the transformation of the shipping industry towards use of carbon-neutral fuels,” the company said in its sustainability report for 2018.

Maersk believes that efficiency can only keep shipping emissions stable, not reduce or eliminate them.

“Nevertheless, until decarbonisation is achieved, decoupling business growth from emissions is a necessity, and we have set an efficiency target of 60% relative reduction in CO2 by 2030 from a 2008 baseline. With these targets, we are breaking the mould for climate targets and ambitions in the shipping industry.”

Maersk had set a target of 60% relative reductions by 2020, using a 2007 baseline. By the end of 2018, the company reached 47% reduction since 2007.

These have been achieved through massive investments in optimizing fleet efficiency, with technical retrofittings including capacity boost, new bulbous bows, propellers and engine modifications, as well as by improving planning and optimizing of networks.

However, as explained, this is not enough to reach 60% in two years’ time.

Hence, the company pointed out that massive innovative solutions and fuel transformation must take place in the next 5-10 years.

“Over the last four years alone, we have invested USD 1 billion and engaged 50+ engineers each year in developing and deploying energy efficiency solutions. We expect this investment level to be sustained in pursuit of our new targets. Efficiency gains do not, however, solve the climate change problem. That can only be achieved through decarbonization,” the company said.

Transformation of the 100-Year Old Business Model

Transforming the shipping industry which has run on relatively cheap, heavy fuel for 100 years is not an easy task. In addition to new ship designs and engine types, there is a need for new types of fuel as well as building entire new supply chains for these new solutions, Maersk insists.

“All of this breakthrough innovation will have to take place in the 2020s and is more than any single company can do,” the company adds.

As a result, the shipping major urges all parties involved to collaborate on incentives and development of innovative solutions to usher in  the age of zero-carbon vessels.

“We want to begin a dialogue with cargo owners, regulators, researchers, investors and technology developers, and together set the foundation for a sustainable industry,” Maersk said, pointing out that research and development will be the cornerstone in decarbonizing the shipping industry.

The Pursuit of Solutions Must Begin Now

Zero-emission, commercially-viable vessels must be on the water by 2030, Maersk believes, especially due to the 20-25-year lifetime of a vessel.

“This should be followed by an initial slow ramping up, allowing maturing of technology and supply chain in order to be able to turn around our entire fleet for net-zero carbon emissions in 2050. This leaves us and the industry only eleven years to find the right solutions for a positive business case for decarbonization.

“For the next few years, it is very important not to rule out any solutions. There are several promising technologies at various stages of development. All solutions will come with benefits and challenges to be overcome and only by actively partnering, collaborating and undertaking research and development will we know which ones will win out. There are several technologies and fuels being developed these years within the areas such as advanced biofuels and hydrogen-based fuels.”

Maersk said that it has already engaged in research and test programs in some of these technologies, for example sustainable biofuels.

“Over the coming years, we will expand the range of solutions we are investigating. This will prepare us for selecting a few candidates we will pursue for the first carbon-neutral vessels.

” Our 2030 efficiency target is strong enough to ensure that we continue to decouple CO2 emission levels from growth in trade and volumes shipped. With this target, we will not exacerbate our contribution to climate change while we grow our business, serve global trade and support job creation.”