Threefold approach needed for maritime decarbonization

A three-pronged approach would be required for the shipping industry to deliver the International Maritime Organization’s (IMO) decarbonization targets, according to Seas at Risk, an umbrella organization of environmental NGOs promoting policies for marine protection.

In the summer of 2023, the IMO set ambitious targets for the decarbonization of the shipping industry: a 30% reduction in emissions by 2030, 80% by 2040, and reaching zero emissions by 2050.

Achieving these goals requires a three-pronged approach that includes:

• Enhanced energy efficiency of vessels;
• A global fuel standard to incentivize the uptake of zero-emission energy; and
• A levy on greenhouse gas emissions to ensure shipping’s transition leaves no country behind

These measures will be on the agenda at the upcoming IMO negotiations, ISWG-GHG-17 and MEPC 82, in September and October in London. With the IMO’s 175 member states already agreeing to finalize and adopt a carbon price and a fuel standard in April 2025, now is the crunch time to settle ambitious policy processes that can pave the way for an effective and equitable transition to zero-emission shipping, according to Seas at Risk.

The organization went on to say that ambitious action on fossil-fueled shipping is essential not only for global efforts to fight climate change but also brings important benefits for ocean health, including reducing underwater noise pollution, oil spills and the frequency of whale strikes.

A hierarchy of tools for a smooth transition

To ensure a successful transition to zero-emission shipping, a clear hierarchy of tools is needed, Seas at Risk said. This starts with enhancing energy efficiency across the global fleet, followed by adopting advanced propulsion methods, primarily wind technology.

This is supported by the introduction of a global fuel standard and a strong levy on emissions.

By first focusing on maximizing energy efficiency, the industry can significantly reduce its fuel consumption, thereby lowering the overall demand for renewable fuels. Wind propulsion serves as the next step, offering a readily available and scalable solution to further cut emissions.

Finally, the global fuel standard and an ambitious levy of at least $150 per tonne of emissions will drive the transition by setting clear emissions targets and providing the financial incentives needed to support a just and equitable shift away from fossil fuels.

Energy efficiency

Capitalizing on energy efficiency across the global fleet is one of the largest decarbonization opportunities. Simple yet effective measures such as regular underwater cleaning with capture can save 6-10% of fuel per voyage, while dry-docking can improve fuel savings by 15-18%.

The IMO’s Carbon Intensity Indicator (CII) serves as a crucial tool here, driving the industry to enhance operational efficiency. Strengthening the CII to require an energy efficiency improvement of, for example up to 38% by 2030 compared to 2018 levels, will push the widespread adoption of technologies like wind propulsion and speed reduction.

Propulsion means

Wind technology offers immediate and substantial gains, with retrofitting ships to include wind propulsion potentially saving up to 30% in fuel consumption per voyage.

If the global fleet were to adopt wind technology, the demand for renewable fuels could be minimized, allowing more clean energy to decarbonize other sectors.

The Global Fuel Standard will further guide this transition by setting limits on the greenhouse gas intensity of fuels. This will incentivize investment in renewable zero-emission fuels and ensure that the switch to cleaner propulsion methods like wind happens in a structured and effective manner.

The essential role of an equitable levy in a just transition

A strong levy, set between $150 and $300 per ton of greenhouse gas emissions as modeled by DNV, is crucial for driving environmental impact while ensuring a just and equitable transition.

The revenue generated can be redistributed to alleviate the economic shocks that disproportionately affect small island developing states and the least developed countries, who would otherwise bear the brunt of rising freight costs as the industry shifts away from dirty fuels. This financial support is vital to ensure that no country is left behind in the transition to a cleaner shipping industry.

Beyond addressing equity, the levy will also play a pivotal role in preventing costly lock-in to outdated technologies like carbon capture storage. By providing the financial incentives necessary for the adoption of cleaner technologies, a high levy will stimulate investments in energy efficiency and sustainable practices, making the overall transition more affordable and effective.

This approach will fund retrofitting ships, building new wind-powered vessels, and bridging the cost gap between fossil fuels and zero-emission alternatives, creating a gradual and lower-cost shift towards a sustainable future for shipping.

The way forward

The IMO is at a historic crossroads where an integrated approach can lead to a win-win scenario for both the shipping industry and the global community. By ensuring that energy efficiency, global fuel standards, and an ambitious, equitable levy work hand in hand, governments would steer the industry toward a sustainable future.

This strategy will not only make the transition smoother and more cost-effective but will also unlock new economic opportunities and protect those most vulnerable to the changing dynamics of global trade.

By embracing this three-pronged approach, the IMO can lead the world in climate action, showcasing how collective effort can drive both environmental and economic progress, Seas at Risk concluded.