Powering all shipping vessels with zero-emission fuels by 2050 would reduce industry emissions, but would require between $1 trillion and $1.4 trillion in investment.
September 22, 2022
More than $1 trillion in investment would be needed to decarbonize the shipping industry by 2050, according to a report released September 21 at the Global Maritime Forum summit in Brooklyn, New York during Climate Week NYC.
The global shipping industry is responsible for approximately 3% of total global greenhouse gas emissions, roughly equivalent to Japan’s total annual emissions. Most industry emissions come from fossil fuels burned to power more than 100,000 large ships on the ocean, and total emissions could more than double by 2050 without decarbonization efforts.
Improving energy efficiency could dramatically reduce emissions from shipping, but full decarbonization ultimately requires the outright replacement of fossil fuels with zero-emission fuels such as hydrogen and ammonia produced using renewable energy and methanol, according to Domagoj Baresic at University Maritime Advisory Services, a shipping consultancy in the UK.
baresic and Catherine Palmer at Lloyd’s Register, a shipping services company in the UK, looked at the progress the shipping industry has made so far, focusing on what they call a ‘break through’ goal of using fuel zero emissions for 5% of international shipping fuel and 15% of domestic shipping fuel by 2030.
“Even if 5% seems like a small amount, it does imply that all the necessary conditions are starting to be in place” for rapidly growing use of zero-emission fuel from then on, Baresic says. Almost no zero-emission fuels are currently used for shipping, he says.
The International Maritime Organization, the United Nations agency that regulates international shipping, has adopted a strategy to reduce shipping emissions by 50% by 2050. A more ambitious plan to reduce shipping emissions 100% shipping by 2050 has been signed by at least 14 countries, including the United States and the United Kingdom.
“Two years ago, there was literally nothing going on in the shipping space. [on decarbonisation],” says Rasmus Bach Nielsen at Trafigura, a global commodity trading company headquartered in Singapore. “I think you have to appreciate how quickly things happen.”
Despite the commitments, however, the industry is only “partially on track” towards the 2030 targets, according to the report.
“We are now at that stage where it is about seeing commitments turn into concrete actions,” says Baresic. “Is the money there? Are we really witnessing the construction of ships and infrastructure? »
The report counts at least 203 green boating pilot projects underway, but says these now need to translate into longer-term commitments such as investments in zero-emission fuel infrastructure. Some ships could be powered by electric batteries, nuclear power or even old-fashioned wind sails, although the report sees zero-emission fuels as the central strategy.
Twenty-two countries have also pledged to create six zero emission maritime routes by 2025, including a route between Shanghai, China, and Los Angeles. These routes could help create the initial infrastructure needed to scale up green shipping.
In total, the report estimates that decarbonizing global shipping by 2050 would require between $1 trillion and $1.4 trillion in investment.
“It’s a big number,” Baresic says, but it would stem from global investments from multiple industries spread over decades.
“We now have a common destination,” says Palmer. “The question is how fast are we going to get there.”
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