Governments, policy makers, and business leaders must acknowledge the enormity of the challenge of decarbonising the shipping industry. That is one the key messages contained in a recent report from the International Chamber of Shipping (ICS), as well as the theme of a new book by Alan McKinnon, professor of logistics at Kühne Logistics University in Hamburg, Germany.
The ICS report, Reducing CO₂ Emissions to Zero, provides a summary of the strategy agreed in April at the International Maritime Organization (IMO) to cut the shipping industry’s greenhouse gas emissions in half by 2050. The ambitious goals of the strategy, which the ICS labels “the Paris Agreement for Shipping”, are achievable, the ICS believes, but only with the development and widespread use of zero-carbon fuels.
The ICS, therefore, urges governments to “take active steps to help facilitate the development of new propulsion technologies and the massive investment in bunkering infrastructure that will be required”. The ICS is “confident that new technology will eventually deliver, whether using fuel cells or batteries powered by renewable energy, new fuels such as hydrogen, or some other solution not yet anticipated”. Each of these options is reviewed in the report.
Batteries and ammonia are described as viable zero-carbon energy sources for which, in the long term, the technical challenges “might not be insurmountable”. The report is less optimistic about hydrogen and nuclear power. In the interim, LNG and biofuels, supplemented by primary renewables such as wind and solar, could set the industry on a path to reach the shorter-term IMO goal of reducing carbon intensity for the industry by at least 40% by 2030 compared with 2008 levels.
Also included in the report is discussion of some of the potential short-, medium-, and longer-term measures for reducing CO₂ emissions being considered at the IMO. These so-called “candidate measures” include further improvements to the Energy Efficiency Design Index and mandatory speed restrictions for ships. Two measures that the ICS strongly opposes are mentioned at greater length: operational efficiency indexing of individual ships, which the ICS says could penalise vessels unfairly, and market-based measures, such as bunker fuel levies. The report makes it clear that the ICS “remains deeply sceptical of market-based measures as a means of further incentivising CO₂ reduction” on the basis that the high cost of fuel already gives shipowners “all the incentive they need” to reduce their CO₂ emissions.
McKinnon’s book, Decarbonizing Logistics: Distributing Goods in a Low-Carbon World, takes a broader look at the entire supply chain, including all main modes of freight transport. With worldwide movements of people and goods projected to triple by 2050, emissions from shipping, aviation, road, and rail transport could by themselves undermine the goals of the Paris Agreement if decisive steps are not taken.
McKinnon warns that the logistics sector will “unquestionably be difficult to decarbonise” and that no single existing or prospective technology, software tool, or business practice has the potential to cut emissions by the required amount. He cautions logistics planners – governments, policy makers, and business leaders – against the temptation to place too much reliance on unproven or yet-to-be-discovered technological solutions such as alternative fuels but to approach decarbonisation “systematically” by also actively targeting managerial and operational changes to reduce emissions.
McKinnon examines the assumptions underlying projected future trends in freight transport. He suggests that steps could be taken to dampen global demand for logistics rather than accepting as inevitable the International Transport Forum’s forecast of a threefold increase in freight tonne-kms, which would make “deep decarbonisation by 2050 an almost impossible task”.
Substantial reductions in the amount of material moved across the globe (measured in tonne-km) could be achieved through minimising waste, recycling, digitisation, material substitution, 3D printing, and by delaying final packaging of goods until they are close to their point of consumption, similar to the way that a lot of wine is now shipped in bulk rather than in bottles.
On the other hand, McKinnon points out that “minimising the distance that a product is transported does not necessarily minimise its overall carbon footprint”, since transport usually accounts for only a small part of the greenhouse gas emissions created during the product’s lifecycle. As an example, he cites a study of the emissions associated with dairy produce, lamb, and apples supplied to the UK market, both locally and from New Zealand, and found that lifecycle CO₂ emissions were 52%, 75%, and 30% lower when sourced from New Zealand despite the 18,000 km journey by refrigerated box ship.
Decarbonisation of the global economy will itself usher in huge changes for the shipping industry. As countries phase out the use of fossil fuels, much of the need to transport coal, oil, and gas, which in 2016 accounted for some 41% of all international seaborne trade, according to United Nations figures, may disappear. But this will not necessarily reduce demand for ships. Instead, there could be the need to transport vast amounts of material to build renewable energy generators, such as wind turbines, with each one requiring about 1,000 tonnes of concrete in its base, as well as construction materials to protect cities and other infrastructure from rising sea levels.
All of this represents a complex and multidimensional challenge for the shipping industry. It is perhaps regrettable in some ways that emissions from international shipping (and aviation) are not tied to the lifecycle carbon footprint of the goods being transported or included in the carbon budgets of the countries to or from which the goods are being shipped. That might have allowed for a more holistic approach to be taken to decarbonising logistics as a whole, as McKinnon proposes, rather than putting pressure on the shipping industry to come up with technical solutions that as yet do not exist.