Earlier in October, Cruise ships that arrived on River Clyde in Glasgow to accommodate the delegates for COP26 were reported to run on fossil fuels, which reveals the paradox of the shipping industry: ports do not have clean energy systems in place.
On November 10, nearly 20 countries signed the Clydebank Declaration at COP26 declaring their intent to support the establishment of green shipping corridors—zero emissions shipping routes between ports.
For Citibank’s Michael Parker, the Clydebank Declaration was “the most serious announcement” during the UN Climate SummitTransport Day.” U.S. Transport Secretary Pete Buttigieg also hailed the declaration as it “ensures our ports act as anchor points for our clean transportation systems.”
However, environmental organisations claimed that the Clydebank declaration only deals with shipping in a very limited way. The deal excludes some of the major shipowning countries, such as China and Singapore.
Shipping accounts for around 2-3% of the world’s CO2 and GHG emissions. If the sector was a nation, it’s emissions would be on par with Germany.
Emissions at sea
The shipping sector actually behaves quite similar to an independent nation, since no country takes responsibility for their emissions. CO2 from shipping is therefore not featured in any country’s official greenhouse gas inventory.
Most pollution from shipping is geographically concentrated across East-West trade routes and particularly on certain types of operators: bulk carriers, oil tankers and container ships.
The Paris Agreement doesn’t explicitly mention shipping. But a legal analysis commissioned by Transport & Environment (NGO) in October 2021 showed that, contrary to industry claims, shipping and aviation are included in the global agreement to limit global warming to 2°C.
The International Maritime Organization (IMO) is responsible for chairing the adoption of measures to cut shipping emissions. But the research group Climate Action Tracker said it is moving at a snail’s pace.
“The IMO’s dual purpose of representing shipping and conserving the Ocean (and, by default, controlling emissions) is the problem,” Ocean Rebellion, a civil society organization said.
The NGO protested outside the offices of the IMO on November 22 believing that the IMO always favors shipping and fossil fuel business over the environment. “They are the UN agency with the most corporate delegates, roughly one-third,” claimed Ocean Rebellion.
Throughout COP26, the shipping sector’s discussions were not as heated and furious as the conversations surrounding oil and gas. Even before the transport day of November 10, the preparatory talks on shipping were held as sideline events at an external venue.
However, shipping functions as a vessel for the global supply chain. António Guterres, the Secretary-General of the United Nations called out the shipping sector even before COP26, saying current efforts were “inadequate” and the trajectories of the emission from the industry would lead to “catastrophic global heating.”
The new declaration
The Clydebank Declaration paves the way for an international coordination mechanism of this hard-to-abate sector. However, major shipowning countries, like China, South Korea and Singapore have not yet signed the document.
The International Chamber of Shipping (ICS), a global trade association for shipowners and operators, said they were unable to comment on why China, Korea and Singapore didn’t sign, but it observes that “all of these nations are committed to developing a solution for shipping by working through the IMO.”
In spite of this, some experts say the declaration is an important step. “The significance of the Clydebank Declaration is that it simplifies the complexity in the global maritime ecosystem,” Johannah Christensen, CEO of the Global Maritime Forum (NGO) says.
“Countries can focus on specific commodities and it allows smaller stakeholders to decarbonise vessels on a specific tradeline,” he added.
The spotlight of this global initiative is on the shipping routes, so called “green corridors,” for the transport of iron ore from Australia to Japan and containerized goods from East Asia to Europe.
The plan also outlines a switch to 20% zero emissions on each corridor within the decade, according to Faustine Delasalle, co-executive director of the Mission Possible Partnership.
“Certainly there are other countries that have an interest,” Christensen adds. “I really hope more Asian countries could join this collective effort. This is a possibility to unlock the potential and the industrial policy will encourage stakeholders to invest.”
As the only Asian country that signed the declaration, Japan owns around 11.4% of the world’s fleet, following Greece (17.6%) and China (11.6%).
In the meantime, the Japanese major shipping companies call for decarbonization, pursuing ammonia as alternative fuels, in line with the government’s vision.
Ammonia as a possible green fuel does not produce CO2 emissions when made cleanly, but given its requirement for large containment space and its toxicity, the industry also has hopes on hydrogen.
The latter is also tricky as it needs to be stored at either -253 degrees Celsius or under high pressure. A report by ICS and Ricardo points out that shifting to alternative fuels such as hydrogen, ammonia, biofuels and electrification from renewable sources could cut 80% of emissions from maritime transport.
According to Christensen, other countries are encouraged to sign to “unlock” the potential. A delegate from Kenya also admitted that Kenya is considering becoming a signatory.
William Fairclough, the managing director of Wah Kwong Maritime Transport Holdings Limited, said that specific Chinese shipyards are developing new technologies. He is positive about working closely with Chinese state-owned shipyards.
“That is the beauty of China’s [public-private partnership]. Chinese shipyards are very focused on providing [low-emission ships] whenever the new technologies are ready.” Dr. Hu Jianhua, China Merchants Group president, in an interview with Lloyd’s list.
Making the transition
“Big cruise ship companies need to take the initiative,” Mr. Yoshioka Tatsuya, Founder and Director of Peace Boat, said in an interview with Climate Tracker.
As a report by Marine Pollution Bulletin argues, the cruise industry has a responsibility to monitor and regulate its growing negative impacts on the environment and human health. “Shipowners are conservative and hesitant in green transition as the initial investment on new technology is huge,” Mr. Tatsuya said.
Ecoship, a project promoted by Peace Boat, will cost more than 500 million USD. The design blueprint for what Peace Boat claims is “the world’s greenest cruise ship” reveals that its main fuels will be Liquefied natural gas (LNG), a fossil fuel, and biogas.
LNG as a marine fuel offers significant air quality benefits whilst also being touted as a possible short-term solution for the decarbonization of the maritime sector. But as a World Bank report points out, LNG cannot be a major marine fuel in the near decades due to its carbon intensity.
“It is a short-term solution during the transition period,” Tatsuya said. “[Eco-ship] serves more as a symbolic role.”
Cruise shipping is only a small fraction of the maritime sector, but major cruise operators, like Royal Caribbean Group, have announced Destination Net Zero, aiming to achieve Net-zero by 2050. Some analysts say zero emission vessels in the global shipping could help the cruise operators achieve commercial advantages. Cargo and container ships are seen as the possible front-runners in the sector’s transition.
“The role of the Green Climate Fund is to incentivize the first-mover,” said Javier Manzanares, Deputy Executive Director of Green Climate Fund (GCF). The GCF is discussing the possibility of providing access to climate technologies for developing countries.
IMO is also reviewing a proposal to form a USD 5 billion Research & Development programme. “Decarbonising the shipping sector needs huge financial input,” Dr. Shi WeiChao, a maritime expert at the University of Strathclyde in Glasgow says.
“The 5 billion Research & Development fund is not enough considering that one vessel demonstration costs around 15 million.” “Not enough but a start,” Michelle Wiese Bockmann, a shipping & energy analyst said on her twitter.
A just solution
There are over 1.4 million seafarers in the world, carrying 80% of the world’s trade by volume according to UNCTAD, and most of them come from emerging economies. Nagy Abdel Rahim, a Marine Engineering Technician from Egypt, has returned to studying during the pandemic.
“There are no jobs at the moment,” he says. He is paying around 22,000 USD for upgrading his knowledge. “It is a good investment as I can get a 50% higher salary.” Similar to Nagy, seafarers around the world are waiting for jobs.
Concerns are growing about the health and wellbeing of seafarers in the green transition rise. New technologies involving high levels of toxicity, such as ammonia propulsion systems, might pose risks to seafarers.
Training is essential to equip seafarers with the necessary skills. The International Labour Organization (ILO) proposed in a policy brief that the transition must be equitable: Training must be fully funded for all seafarers.
Policies to create a conducive environment for women and young seafarers still need to be put into place. “The cruise business has to evolve its 19 century-old culture,” Mr. Tatsuya says.
The core of just transition is seafarers. According to Mr. Stephen Cotton, General Secretary of the International Transport Workers’ Federation, the framework regarding seafarers’ rights in decarbonization is being built together with IMO, ILO, and trade unions. “Some dialogues will happen after COP.”
Equity for seafarers’ upskilling is only one element of discussions about equity. China, India and Panama, called the European proposal of Fit for 55, published in July, “unfair and inaccurate”.
This proposal regulated that ships within Europe and en route to EU ports must pay tax on their CO2 emissions. ICS, on the other hand, “supports a global market-based measure” “to close the price gap between new zero carbon fuels and conventional fuels” and raise funds to expedite the transition worldwide including by developing nations”.
“The best means of applying this to shipping will be via a levy based system rather than via an emissions trading system for shipping,” said ICS.
As the cruise industry slowly starts to resume after its long pause during the pandemic, major ports around the world may see the hustle and bustle of the seafaring industry once again. But questions still remain around how the industry will make its landmark green transition.