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ICS TURNS THE TABLES ON COP26
The shipping industry might have been on the defensive at COP26 due to calls for it to take more action on decarbonisation, but the International Chamber of Shipping (ICS) has turned the tables with a proposal and an ultimatum
Instead of supporting the IMO’s existing goal of 50% greenhouse gas emissions reduction by 2050, the ICS (which represents 80% of the global shipping industry) has called for shipping to be net zero by 2050. It has backed this call with a plan for governments to introduce a mandatory carbon levy on CO2 emitted by globally trading ships over 5,000 gross tonnes. The money would go into an IMO Climate Fund used to close the price gap between zerocarbon and conventional fuels and to deploy the bunkering infrastructure required in ports throughout the world to supply fuels such as hydrogen and ammonia.
Funds would be gathered through the same mechanism as the US$5 billion R&D Fund discussed without conclusion at the IMO’s Marine Environment Protection Committee meeting (MEPC76) in June. This fund would be financed through a mandatory $2 levy per tonne on marine fuel and be used to accelerate the development of zero-emission technology in pilot projects that could be scaled up across the industry.
The ICS is pushing for decisive action at MEPC77 this November, two weeks after COP26. Guy Platten, Secretary General of the ICS, challenges the governments of the world: “At COP, we will be saying: back us, or explain why you are blocking the energy transition to zero emission fuels.”
Although the ICS and joint-proposer INTERCARGO didn’t put a dollar amount on the Climate Fund levy when they announced it in October, the Marshall Islands and Solomon Islands have previously proposed a $100 levy. The IMO’s 174 Member States have been discussing potential marketbased measures in depth since MEPC56 in 2006. Agreement is yet to be reached, largely due to differences of opinion between developed and developing nations on how to balance equality with common but differentiated responsibility for causing the world’s GHG problem. China, Brazil, South Africa, Saudi Arabia and India, for example, have all at times opposed climate-related measures considered by the IMO. The ICS has acknowledged the challenge by noting that the Climate Fund’s work could initially target developing nations.
Falling short
Dealing with common but differentiated responsibility has been a problem at COP meetings. The pledge to mobilize US$100 billion annually by 2020 for climate action by developing countries was taken in the United Nations Framework Convention on Climate Change (UNFCCC) process in 2010, but it has not yet been fulfilled. Developed nations are falling some US$20 billion short each year.
8 Jürgen
Rechberger, Vice President and Business Field Leader – Hydrogen and Fuel Cells at Austrian technology provider AVL expects hydrogen to become an internationally trade commodity"
8 Guy Platten,
Secretary General of the ICS wants governments to introduce a mandatory carbon levy on CO2 emitted by globally trading ships over 5,000 gross tonnes
The oil and gas sector is not accepting its share of responsibility for global emissions ‘‘
The current developed versus developing dynamic could change. Between 2020 and 2050, the US Energy Information Administration projects that total energy-related CO2 emissions will increase by 5% (600 million metric tons) in OECD countries, which generally have slowly growing economies, and by 35% (8 billion metric tons) in non-OECD countries, which generally have rapidly growing economies.
But in the words of Alok Sharma, President of COP26: “the world will succeed or fail as one,” and all governments are under pressure in the leadup to COP26 with activists such as Greta Thunberg complaining they are talking too much “blah, blah, blah” and not taking enough action. Even Queen Elizabeth II has been reported to be irritated.
Unilateral pressure
While achieving consensus at the IMO can be challenging, there is a clear commitment to make progress. Most recently, following the adoption of the Initial IMO GHG Strategy in 2018, the IMO adopted amendments to MARPOL Annex VI at MEPC76 that set out technical and operational energy efficiency measures for ships (EEXI and CII). The IMO is also developing lifecycle GHG assessment guidelines to increase the understanding of the carbon lifecycle of new fuels. A range of IMO-executed R&D projects are focused on supporting developing countries with the results being shared to facilitate roll out elsewhere.
The ICS believes that the IMO is the right forum for managing shipping’s decarbonisation program. It doesn’t want COP26 to result in unilateral measures such as the EU Emissions Trading System which only applies to about 7.5% of global shipping emissions. Market based measures should be applicable when all shipping has access to solutions for emission-free ships. Without them, the EU Emissions Trading System operates more like an offsetting scheme than an incentive to take up solutions, which don’t yet exist.
Ocean Conservancy has called for shipping to be included in the US Nationally Determined Contribution and called for the elimination of shipping emissions in the US by 2035. There are some 45 nations already committed to decarbonising shipping by 2050, says Dan Hubbell, Ocean Conservancy’s Shipping Emissions Campaign Manager. He says one of the most compelling pieces ahead of COP26 is a new legal analysis by Transport & Environment that argues that shipping is captured within “economy-wide absolute emission reduction targets” of the Paris Agreement.
Following the automotive lead
Shipping may follow the automotive industry towards fuel cell technology rather than combustion engines, as both industries face similar decarbonisation challenges. Speaking at the Second Global Sustainable Transport Conference held in China in October, UN Secretary-General António Guterres said: “The priorities are clear: phase out the production of internal combustion engine vehicles by 2035 for leading manufacturing countries, and by 2040 for developing countries.”
A similar goal has been discussed in the EU, with the European Automobile Manufacturers Association (ACEA) countering: “Rather than announcing bans on the internal combustion engine in the short term, what is needed is a strong political commitment to put all the enabling conditions for the transition to zero-emission mobility – such as charging infrastructure and incentives – in place as a matter of urgency.”
Jürgen Rechberger, Vice President and Business Field Leader – Hydrogen and Fuel Cells at Austrian technology provider AVL, expects that fuel cells will achieve a very high share of the marine market. He says that truck applications will lead the introduction of fuel cells in the transport industry, but notes that transport itself is just a small part of the hydrogen economy. Most industrialised countries will face a significant lack of renewable energy, and hydrogen will be a globally traded commodity much like crude oil is today – shipped around the world as liquid or compressed hydrogen or as ammonia or methanol. China will dominate in the manufacture of fuel cells, and India will be the new “Saudi Arabia” of hydrogen production, he says. The focus will be on green hydrogen (produced by electrolysis using renewable energy): many countries, including Austria, will not provide incentives for the use of blue hydrogen (derived from methane).
Future fuel mix
The International Renewable Energy Agency (IRENA) has stated that e-methanol and e-ammonia are the most promising green hydrogen-based fuels for shipping, with e-ammonia possibly providing 43% of the sector’s energy needs in 2050. This amounts to about 183 million tonnes of renewable ammonia, an amount comparable to today’s global ammonia production. IRENA predicts that renewable fuels based on green hydrogen and advanced biofuels could contribute at least 70% of shipping’s energy mix in 2050.
The World Bank has indicated that ammonia and hydrogen are the most promising zero-carbon bunker fuels – with a preference for ammonia due to its higher energy density and less demanding cooling requirements. Biofuels risk being constrained by the supply of sustainable biomass and by cross-sectoral competition driving up prices. Synthetic carbon-based bunker fuels are expected to be less costcompetitive due to lower production efficiency and a dependence on direct air capture for CO2 feedstock.
Many developing nations could produce ammonia and hydrogen, says the World Bank. “With over 80% of the investments required for shipping’s energy transition anticipated to be for land-based infrastructure (e.g. hydrogen production, ammonia synthesis), countries could leverage these investments to also upgrade their domestic energy sector and maritime or non-maritime infrastructure.”
8 Dragos Rauta,
Technical Director of INTERTANKO, notes that shipping companies support the development of solutions, but are not technology designers or fuel manufacturers
8 The IMO needs
