Chief correspondent Jason Jiang assesses what Unilever’s recent net zero emissions commitment for all its products by 2039 means for shipping.
As another week of discussions about greenhouse gas emissions at the International Maritime Organization (IMO) comes to a close with nothing set in stone, increasingly shipping is facing up to the reality that cargo owners, not regulators, will enforce sweeping environmental change for shipping.
Among the most important – and yet not widely disseminated – items of shipping news in the past two months came from the London headquarters of multinational consumer goods company Unilever. In June the company announced a new series of sustainability measures and commitments, including reaching net zero emissions from all its products by 2039, setting a new high ambition bar among major brands around the world with huge ramifications for the shipping community.
You cannot overestimate the influence that cargo owners can have on decarbonising shipping
The maker of Dove skincare, Colman’s mustard, and Q-tips cotton swabs now aims to zero out all emissions from its own operations and those of its suppliers including shipping by 2039. Each of the company’s 70,000 products will show on their labels how much greenhouse gas was emitted in the process of manufacturing and shipping them to consumers. To facilitate the ambitious proposal, Unilever brands will collectively pledge $1.1bn into a new dedicated Climate & Nature Fund.
“You cannot overestimate the influence that cargo owners can have on decarbonising shipping. Large cargo owners have an important role to play in creating sufficient demand for low or zero emission shipping. This demand signal will be essential to unlock shipping’s energy transition and to make zero emission shipping commercially viable,” says Johannah Christensen, managing director at the Global Maritime Forum, a partner of the Getting to Zero Coalition.
“End consumers are becoming increasingly concerned about the climate impact of their purchases and willing to pay a premium for sustainable sourcing. This means a competitive advantage for cargo owners who can label their modes of transportation as green,” Christensen adds.
Shipping is a service business and its end-users – cargo owners, and ultimately us consumers – are demanding rapid, meaningful response to the climate emergency
Getting to Zero Coalition is an alliance of more than a 100 companies within the maritime, energy, infrastructure and finance sectors. The coalition is committed to getting commercially viable deepsea zero emission vessels powered by zero emission fuels into operation by 2030.
Ned Molloy, a shipping and environmental consultant, has noticed that many of the biggest shippers have announced net-zero targets recently, and are scouring their entire supply chain, including maritime, for ways to cut CO2 emissions.
“Shipowners ultimately have to provide the service cargo owners want in order to stay in business – including on emissions. A big question for carriers is whether they can successfully differentiate themselves by offering low and ultimately zero-carbon freight as a value-added service. But this is going to require much more rigorous and transparent emissions data than is currently the norm,” Molloy says.
“In the absence of stringent near-term climate policy for shipping, the shippers are creating strong demand-pull to drive emissions reductions. Shipping is a service business and its end-users – cargo owners, and ultimately us consumers – are demanding rapid, meaningful response to the climate emergency. Shipping can respond in a positive way, creating new commercial opportunities,” argues Diane Gilpin, founder and CEO of the Smart Green Shipping Alliance (SGSA).
SGSA is currently working with UK utility Drax to produce electricity from carbon-neutral biomass. The company needs its renewable fuels moved by renewable powered ships and retrofitting FastRigs, an innovative sail technology, is the first step in that journey.
“We’re addressing the layers of commercial challenges with rocket science. Who pays the additional capex, who benefits from the value of fuel savings, what happens if the FastRig-enabled ship on Drax work gets out of position and has to work for a less enlightened cargo owner? That’s what our work with the European Space Agency on satellite routing and real-time verification systems is being designed to do – to measure emissions reductions in real time and attribute their value to the cargo owners,” Gilpin says.
“The challenge is to measure, optimise and work with carriers in the industry, as the standards of measurement and emission reduction program are inconsistent across the industry,” states a case study report by the Sustainable Shipping Initiative (SSI) on Unilever.
SSI is a multi-stakeholder initiative that brings together like-minded and leading organisations with shared goals and equal determination in improving the sustainability of the shipping industry in terms of social, environmental and economic impacts. SSI members range from charterers, shippers, shipowners and shipyards to port operators, banks, ship finance and insurance providers, classification societies and technology companies.
This is going to require much more rigorous and transparent emissions data than is currently the norm
Andrew Stephens, executive director of SSI, stresses that shipping cannot decarbonise alone. Collaboration across and beyond the industry is very much needed to solve such an urgent and global challenge.
Stephens reckons there is growing awareness and momentum around the climate crisis on which shippers can capitalise and raise the bar on their demands for sustainable shipping.
“As shippers, the big brands have a key role to play and carry huge leverage when it comes to demanding zero emission shipping of their products. Customers are also critical and create the demand for supply chains that are both transparent and sustainable, and informed through carbon labeling.
As for the complexity of standards and third-party verification for carbon labelling, Stephens says SSI is working on defining sustainability criteria for the alternative fuels under consideration for shipping’s journey to decarbonisation.
“SSI’s work will feed into and facilitate the development of a standard and/or certification scheme that could help address challenges emerging in carbon labelling ,” Stephens maintains.
Unilever’s 2039 commitments will be met by many other big name cargo owners in the coming months and years. Shipping does not have long to order the right ships for the next generation.