Shipping titans embark on voyage to decarbonise shipping

Shipping titans embark on voyage to decarbonise shipping

At the Global Maritime Forum in Hong Kong today 34 CEOs from some of the largest shipping organisations in the world signed up to a pledge to get the industry moving faster towards decarbonisation.

The group, which features the likes of Cargill, Trafigura, Maersk and Euronav, have set out to lead the maritime industry in a transition towards a new decarbonised future, pushing ahead and perhaps beyond the IMO’s stated goal of cutting CO2 emissions in half from 2008 levels by 2050 as well as acknowledging the temperature goals set out in the Paris Agreement.

“[T]he maritime industry needs to accelerate both technological and business model innovation, further improve operational and technical energy efficiency, and transition to zero-carbon fuels and new propulsion systems,” a release stated, adding that the aim was to phase out all greenhouse gas emissions from shipping as soon as possible.

The signatory CEOs believe that a shift to a low-carbon economy by 2050 has the potential to create new opportunities for business through both technological and business model innovation.

Shipping’s decarbonisation bid was described as the biggest technology challenge the industry has faced in 100 years.

The CEOs called for regulations that must provide long-term certainty for financiers, builders, owners and charterers to make the required investments in low carbon technologies. The top executives said they accepted the need for transparency to help drive change.

“The right incentives for accelerated investment into R&D can only come about if we get a global IMO based regulation. We invite stakeholders from the entire maritime spectrum to join us on this new journey,” said Claus Hemmingsen, vice CEO of AP Moller – Maersk.

The grouping said the industry should explore the use of carbon pricing and other mechanisms that can create economic value from greenhouse gas emission reductions.

“An ambitious strategy consistent with the Paris Agreement temperature goals will require zero emission vessels to be entering the fleet in 2030 and form a significant proportion of newbuilds from then on. Different solutions have different benefits for different types of ships, it is important that solutions are not only viable from a commercial perspective but are also technically feasible and can be safely adopted and operated,” commented Alastair Marsh, CEO of UK class society Lloyd’s Register.

The CEOs recommended that core principles of a roadmap for transition to a new zero-emission future be: ambitious, predictable, market-orientated, technology-enabling, urgent, coherent and enforceable.

Maersk’s Hemmingsen said during a press conference this afternoon to unveil the new initiative that the sulphur cap, which starts in 15 months’ time is “almost not a challenge” when compared to decarbonising shipping.

Euronav CEO Paddy Rodgers commented that it was vital shipping was seen to be on the front foot in tackling its carbon footprint. “We do not want to be seen as foot dragging, reluctant, recalcitrant capitalists,” he quipped.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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1 Comment

  1. Peter Nuttall
    October 5, 2018 at 7:08 pm

    This is great to see Sam – positive and progress leadership from the industry. The real test though is whether the IMO can match step at the next ISWG and MEPC. For the CEO’s plan to get traction, IMO must accelerate discussion on MBMs to the top of the order paper and make it part of the short term measures. It will be only too easy to simply focus on a few easy wins that dont give us any real momentum and only marginal reductions and kick the hard debates down the road.