Climate Commitments: Decarbonizing Shipping Starts with Action

Introduction
The Report on Climate Commitments for the first time provides an overview and analysis of some of the many climate actions and commitments that are planned or undertaken across a wide spectrum of the maritime ecosystem. The report gives a broad and detailed look into which concrete steps industry is taking toward shipping decarbonization today and what we can expect over the coming decade. In the context of the recently published Strategy for the Transition to Zero-Emission Shipping, the Report on Climate Commitments actually confirms that some of the Strategy’s key findings and recommendations for action are already visible. First, the report confirms that shipping is experimenting with, applying, and planning for a range of different zero-emission fuels, vessels, and technologies – an expression of the flexibility of choice of zero emission fuels and technologies. Second, a broad range of companies and organizations in maritime nations across the world have understood the importance of decarbonizing supply chains and services and are thus better prepared for the rapid scale-up in the 2030’s onwards. Some are setting their own ambitious scope 1, 2, and 3 GHG emission reduction targets, are providing GHG emissions transparency, and are investing in zero emission or are planning to do so.

Third, climate actions and commitments are spread across all continents, and many projects include collaboration between different actors including public private partnerships, which confirms that leadership is seen from many actors and geographies. In the following sections, the Insight Brief highlights the main findings from the Report on Climate Commitments and provides just a few of the many examples highlighted in the report.

Climate Targets
Multiple signatories have provided targets on their reduction of GHG emissions and/or carbon intensity. Seven signatories have already achieved full onshore decarbonization (scope 1 and 2 emissions). An additional 16 signatories are committed to reaching this target by 2030 or earlier. Achieving these targets primarily contribute to the GHG reduction of the countries where activities take place. However, these targets and associated experiences are important first steps for both domestic and international shipping to be able to decarbonize by 2050. Eight signatories have committed to shipping decarbonisation by 2040 and 55 have committed to 2050.

Pilot and Demonstration Projects (RD&D)
For ships, infrastructure, and fuels to be zero emission capable and commercially viable on a large scale, pilot and demonstration projects (RD&D) are a necessary first step that requires global and cross-industry collaboration. The projects reported by signatories range from focused projects on ship or fuel technology alone, to projects piloting zero emission in the entire value chain. Such projects often target new zero emission capable ships for example running on batteries, hydrogen fuel cells, or having dual-fuel engines. Projects also focus on retrofitting parts of the existing fleet with for example wind propulsion technology, energy efficiency measures, or using drop-in fuels. This broad focus on the signatories’ RD&D projects is also visible in the collaboration within these projects between the service provider such as classification societies, financial institutions or insurers, and the ship builders, owners, operators, and charterers. Of the 136 actions focusing on RD&D, 44 have indicated such a cross-industry collaboration.

GHG Transparency & Procuring services
Creating GHG transparency is a necessary first step in shipping decarbonisation as companies are then required to analyse and disclose both past and targeted emissions. GHG transparency is not only an important mechanism for companies it is a tool more frequently demanded by the end-users to create comparability and incentivise companies to reduce emissions. This goes hand-in-hand with procuring zero-emission shipping services, where users of ships like cargo owners or freight forwarders provide their customers with zero emission options or disclose GHG emissions during transport.

145 signatories are already involved in GHG transparency actions, either on an individual basis or through initiatives like the Poseidon Principles and the Sea Cargo Charter. 25 signatories have indicated actions on procuring zero emission shipping, of which 16 have actions that go hand-in-hand with GHG transparency.

Zero emission vessels & zero emission fuels
The first zero emission vessels and fuels are already in use, and bigger ocean-going vessels have been ordered and some are expected to operate from 2023. 77 signatories are already investing or planning to invest in zero emission vessels and fuels, with a total of 135 actions. While the vast majority of these signatories are investing in using zero emission fuels, the fuel of choice differs ranging from for example hydrogen, methanol, ammonia, synthetic LNG, bio-fuels, electricity, and wind propulsion.

Energy Production & Infrastructure
For shipping decarbonization to be commercially viable and operational, establishing bunkering facilities in combination with producing zero-emission fuels are fundamental aspects for the feasibility of zero emission shipping.

Currently, 57 signatories are involved in 65 actions involving current or planned projects on either production of zero emission energy or establishing zero emission infrastructure, or both. These actions take place globally in over 40 countries.

Concluding remarks
The Report on Climate Commitments has highlighted that the maritime industry is not just in the initial stages of setting targets, disclosing GHG emissions reductions and carbon intensity and engaging in pilot projects. Actual emission reductions are already taking place and more are on the way this decade thanks to investments in a variety of zero emission vessels and fuels. However, for the zero emission vessels and fuels to become commercially viable globally by 2030 and then to rapidly scale up, the industry needs additional regulatory support from governments and international regulators.

Download pdf version of the Insigh Brief here.