Maritime shipping accounts for almost 3% of global greenhouse gas (GHG) emissions – about the same amount as Germany. Around 85% of the sector’s emissions derive from international shipping; the transport of goods by container ships, bulk carrier ships and tankers. Although shipping has become more energy efficient over the past decade, emissions from the sector could increase by up to 30% from 2008 levels by 2050 as demand for international goods rises. Net-zero shipping has long seemed a distant dream.
“At the global level, we are talking well over a gigatonne of CO2 every year; we are talking 100,000 ships,” says Faig Abbasov, shipping director at the Brussels-based NGO Transport & Environment (T&E). “Getting the industry to net zero by 2050 is going to be a massive challenge.”
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However, momentum is growing behind the global agenda to decarbonise the sector. At the latest meeting of the International Maritime Organization (IMO), the UN shipping regulator, in London in December 2022, a diverse collective of developed and emerging economies – including the likes of Nigeria, Chile and Vietnam – joined the call for a sector-wide net-zero goal.
The campaign group Seas at Risk says there is now a clear majority of countries in favour of a 2050 net-zero target, offering hope it can be agreed at the IMO’s next meeting in June. That would be a major breakthrough for an industry that is blighted by division, bureaucracy and entrenched vested interests, but even if the political will for net-zero shipping does come around, do we know how to get there?
Zero-emission fuels: “well off track”
Shipping emissions come down to four factors: the weight of goods transported, the distance they cover, the amount of fuel it takes for one tonne of products to move 1km, and the amount of the carbon released through the production and use of that fuel – known as the fuel’s “carbon intensity”.
Although battery electric ships are in development for short-distance shipping, the overwhelming focus for decarbonising the sector as a whole comes down to that last point – the type of fuel used and its carbon intensity. The problem is, zero-emissions fuels like green hydrogen and ammonia have yet to enter the fuel supply and are not expected to be produced in sufficient quantities to grow past the single-digit percentage mark before 2030 at the earliest. Other zero-emission fuels for shipping include synthetic carbon-based fuels made from green hydrogen and captured CO2, such as Fischer Tropsch liquids and e-methanol.
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By GlobalData“The methanol engine is there, but the ammonia engine is still being developed,” said Johan Byskov Svendsen, programme manager at the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, on a recent green shipping webinar hosted by the think tank RMI. “To start decarbonising quickly, ships will have to get started on methanol in the short term and move onto ammonia over the longer term. In 50 years, ammonia will probably be the winning fuel and methanol will be used for niche purposes.” US start-up Amogy is aiming to launch the world’s first ammonia-powered, zero-emissions ship in late 2023.
Scenarios aligned with a 1.5°C pathway indicate that 5–17% of maritime shipping fuel will need to be zero-emissions by 2030, and 84–93% by 2050. The sector will need 5.5 million tonnes of green hydrogen annually by 2030, requiring between $120bn and $150bn of investment, according to Alex Hewitt, CEO of the global green hydrogen developer CWP Global and current chair of the Green Hydrogen Catapult. “And we are going to need 15–20 times that by 2050,” he adds. “The large-scale projects take around eight years of lead time, so they are only going to start coming online by the end of this decade.”
There are around 200 pilot and demonstration projects developing zero-emission fuels, according to the Systems Change Lab (SCL), a collaborative initiative convened by the World Resources Institute and Bezos Earth Fund. Given the lack of deployment, SCL has categorised the zero-emission fuels transition as “well off track”. Nevertheless, it is moving in the right direction and if the projects in development move to market quickly and policy levers are aligned, there may be quick growth in the uptake of the fuels, states SCL.
“These alternative fuels are not yet a standard commodity," says Svendsen. "We need that to be in place before a final investment decision can be taken."
However, underlying Svendsen words lies a catch-22 that is dogging many sectoral decarbonisation agendas across the global economy: who should make the first move? “Shipowners always complain that there are no clean fuels available and sometimes they will add, ‘at an affordable price',” says Abbasov. “Fuel suppliers, on the other hand, say they are ready to produce the fuels – once they get the signal that they will be bought by shipowners.”
“I am more on the side of fuel suppliers at the moment,” he adds. Running ships on renewable hydrogen has minimal impact on the price of the consumer goods transported, according to T&E analysis, effectively debunking claims by the shipping industry that ambitious measures to green the industry will cause exorbitant price hikes for consumers.
German shipping giant Hapag-Lloyd aims to be climate neutral by 2045 and reduce its GHG emissions by 30% by 2030. The container liner specialist talking to energy providers about securing sufficient alternative fuels for its needs, according to the company’s sustainability manager, Martin Koepke.
“Some of the energy providers are new to the maritime world, so there are still questions over issues like how we will add the new fuels to the ships,” he says. “Then there is the infrastructure; for example, where can we store the new fuels in the ports?”
Alternative routes to net-zero shipping
Zero-emissions fuels are not the only approach to decarbonising shipping, however. There are other ways of reducing the sector’s emissions, all which will have to play a part if the industry is to reach net zero by mid-century. One such approach involves retrofitting ships so they use less fuel, like adding protruding “bulbous bows” to reduce resistance from waves, and upgrading ship propellers and hulls to improve fuel efficiency. Many ships will also need retrofitting to accept zero-emission fuels.
“Retrofitting is possible depending on the ship’s age, but it can be costly,” says Abbasov. In the immediate future, he sees new technologies being deployed primarily as the fleet renews, but in the medium to long term there is need for policy intervention “because if you only rely on the renewal of the fleet, we will never hit net-zero shipping by 2050”.
There are also new technologies that allow ships to make better use of the wind. Spinning cylinders called Flettner rotors and huge kite sails harness wind power to propel vessels. This can cut fuel use by 10%, and when coupled with computer programmes that model wind speed and direction, ships can optimise their routes and save another 10% of fuel. Commodities giant Cargill, one of the world's biggest ship charterers, will test a dry bulk vessel with two wind sails carrying cargo later this year.
Another simple way to slash emissions almost instantaneously would be for ships to sail at slower speeds. The faster they move, the more energy they need; going slower is one of the most effective and immediate ways to cut fuel use. This can occur naturally through high fuel prices, but locking in the benefits would require regulation on ship speed limits. Analysis from T&E shows that a third of shipping emissions can be slashed by improving energy efficiency, with much of those gains coming from “slow steaming”. A 10% reduction in speeds would reduce emissions by around 30%.
“There was a proposal in 2019 to get the IMO to mandate speed limits, but the IMO rejected it because the industry was adamantly against it – especially the container liners,” recalls Abbasov. “Speed is part of their business model: the faster they go, the more they can transport.”
Finally, there is the notion of “shore power”: ships can reduce their fuel consumption at port by switching off their engines and connecting to the local electricity grid instead. Shore-side electricity comes with the bonus of reducing fuel pollution in coastal cities, and Norway, the US and China have taken the lead with favourable government support schemes.
Abbasov says shore-side electricity could significantly reduce the 7% shipping emissions associated with ships at berth, but the ports would need to be equipped with large charging stations, and the grid would need to have enough capacity to take on vast additional demand that could be “equivalent to small cities”.
A 2020 paper analysing the potential of shore-power in Europe estimated that annual emissions of 3 Mt CO2 could be avoided if the auxiliary power demand of ships at berth were supplied from the current electricity mix of national grids. This equals an average reduction of overall shipping emissions by 2.2%, and would require 0.2% (6.4 TWh) of the current electricity generation capacity of the European Economic Area and the UK.
“[But] the main reason this hasn’t happened so far is because purchasing electricity from the grid is more expensive than burning dirty heavy fuel oils onboard,” Abbasov says. “That will remain so unless you either make fossil fuels more expensive or just force ships to connect to the grid when at port.” The EU and California are introducing regulations enforcing shore-side electricity.
“The Tesla moment for shipping”
There are few technical issues blocking the path to net-zero shipping by 2050. The technologies are either already available or will be ready in time – if there is a commercial or political will to use them. “What we see is a lack of political work to introduce policies to correct market imbalances in favour of green technologies,” says Abbasov.
“It is a very complex undertaking,” admits Koepke. “We need much more than just the shipping community; we need the ports, we need the energy providers, the anchor providers [to all work together.]”
Perhaps what is most needed is for jurisdictions to step up and take responsibility for shipping emissions. The EU, for instance, plans to regulate the emissions of ships that call at its ports. The bloc is introducing shipping into its compliance carbon market, the EU Emissions Trading System, and there is a separate law, the FuelEU Maritime Regulation, that will require all ships to switch to alternative fuels on voyages to EU ports. “I call it the Tesla moment for shipping,” says Abbasov. “That regulation that will revolutionise the shipping industry.”
However, Abbasov is downbeat on the chances of an effective net-zero shipping agenda coming out of the IMO: the organisation is trying to get a consensus from 191 countries that have vastly different interests, economic capacities and capabilities. “There are too many chefs in the kitchen,” he says.
Nonetheless, around 84% of all ships call at ports in the EU, China or the US. If China and the US were to follow the EU’s lead and introduce similar regulations to promote greener shipping, that would effectively reach a critical mass for the rules to be applied globally.
