The World Shipping Council (WSC), which represents the liner shipping industry, is turning its attention to the mid-term shipping decarbonization measures that will follow the short-term measures agreed at IMO’s MEPC 78.
Although shipping is still grappling with those short-term climate measures, IMO member nations and organizations have now turned their full attention to developing the mid-term measures necessary to progress the decarbonization of shipping.
In a recent paper submitted to IMO’s Intersessional Green House Gas Working Group (ISWG-GHG 13) and MEPC 79, the World Shipping Council (WSC) examines the current proposals, highlighting three key suggestions to support swift progress and ensure that regulations are effective in driving the transition to alternative fuels and propulsion technologies in line with global climate goals.
“This is the time for open-minded discussions and a shared focus around what is needed for our climate and the sustainability of global supply chains,” says John Butler, President & CEO of WSC. “We have to think practically about what the proposals before the IMO can deliver in actual carbon emission reductions and also how to get to a decision. It is not just about getting to yes, but getting to yes on something that will make a difference for the future of our planet.”
The WSC paper examines the main mid-term decarbonizationmeasures under deliberation, identifies cross-cutting issues relevant to numerous proposals, and proposes three key suggestions for consideration by IMO member nations at IMO ISWG-GHG 13 and MEPC 79.
SIX CRITICAL PATHWAYS
WSC believes that six critical pathways need to be considered to decarbonize the industry in line with global climate targets.
Global Carbon Price: A global price on carbon combined with dependable and broad-based “buy down” programs that effectively level the playing field among newer low and zero GHG ships and the tens of thousands of ships that will still be burning conventional fuels.
This will play a large role in making it possible for companies to put zero GHG ships on the water and to operate them competitively.
New Build Standards: New build standards that support the energy transition, such as requiring ships built after a certain date to be able to operate on zero GHG fuels or not allowing the construction of vessels that operate on fossil fuels alone after a certain date.
Well-to-wake Fuel Life Cycle: Transparent well-to-wake life cycle analysis of fuels, breaking out well-to-tank emissions and tank-to-wake emissions, combined with regulatory mechanisms to incentivize first-movers for use of alternative fuels that offer significant GHG reductions even if they are not available from fully renewable sources from the start.
Fuel Supply Development: Integrated development of global production and supply of zero GHG fuels through partnerships between IMO member states and energy providers, as well as regulatory provisions that allow for flexibility in the initial stages of the energy transition, given that zero GHG fuels will not be available at the same time around the globe.
A Green Corridors Program to accelerate an equitable fuel and technology transition, introducing zero GHG ships and fuels across trade lanes where the necessary shoreside energy infrastructure is first available, to learn and develop best practices as well as for the IMO member states and interested parties to focus on government-to-government initiatives and coordinated public-private investments to build the necessary production facilities and supply infrastructure;
R&D Investment: Applied R&D for shipboard and shoreside systems that allow the safe use of zero GHG fuels is necessary to put zero emission ships on the water. To avoid accidents and stranded assets, a significant increase is needed in the level of effort and investment to develop the technologies necessary to use the most promising fuels onboard transoceanic ships.
The current proposals before IMO include a GHG levy or feebate mechanism, a GHG fuel standard, emissions trading, and a funding/reward system tied to a specific benchmark.
WSC says that they all have their strengths, but share a set of challenges that are critical to the overall viability and success of IMO’s GHG Strategy:
IMO’s goal to phase out GHG emissions from shipping will require very significant investments in the production and supply of low, near-zero, and zero GHG fuels.
Well-to-Wake Life-Cycle Analysis (LCA) is critical to avoid favoring fuels that have attractive Tank-to-Wake figures, but produce high life-cycle emissions instead of GHG reductions.
Countries across the globe face very different economic circumstances and some locations – especially those that are remote and import or export small volumes – already face very high transportation costs. Any proposal needs to identify an effective structure to address these issues of equity and sustainability of island states and developing economies.
To address these challenges and enable swift progress at IMO, WSC offers three suggestions that would significantly strengthen the IMO GHG Strategy.
- Modify the Global Fuel Standard (GFS) proposal to include fewer steps and to establish dates for each step based on projected fuel and technology production timeframes for those fuels that will enable significant GHG reductions based on Well-to-Wake LCA analysis. This will encourage earlier investment in the production of low and near-zero GHG fuels, increase R&D towards more significant technology advances, and reduce the risk of the regulation stalling investments based on incremental change.
- Develop an IMO Green Corridors Program as a means to introduce new fuels and technologies and as a practical and explicit vehicle for an equitable transition. Building on existing initiatives, Green Corridors can be created to connect both developed and developing economies with the introduction of appropriate ships and fuel infrastructure serving specific routes with a graduated expansion;
- Consider a benchmarking approach using a life cycle assessment (LCA) based GHG intensity metric that is more directly tied to meeting GHG reduction goals, rather than a relative benchmark based on the CII.
“Our core challenge is to create the regulatory structure to drive development, production, and adoption of low and near-zero GHG fuels and technologies, coupled with the necessary investments in renewable energy production for an equitable transition. Liner shipping is investing in decarbonization, and we urge IMO member nations to come together with a focus on future generations to ensure the advancements necessary for a timely energy transition,” says Butler.