Cleaning up shipping

Efforts to deal with the climate crisis have consistently avoided the shipping sector, one the biggest sources of global greenhouse gas emissions, but that could change under European Union plans to include cargo vessels in its carbon market. If the initiative succeeds, it could go a long way to cleaning up transport’s dirtiest industry.

As most ships tend to sail out of sight, on seas and oceans, they are rarely noticed – but they produce around one billion tonnes of carbon dioxide every year, accounting for about 3% of global emissions and 10% of transport emissions. And it is not just carbon emissions that are left in their wake: they blast huge amounts of other pollutants, like sulphur dioxide, nitrogen oxides and particulate matter.

Emissions Trading adds extra cost

Yet the shipping industry was spared specific emissions-cutting targets in the 2015 Paris climate accord. The sector itself has recognised the problem. In April 2018, the International Maritime Organization (IMO) agreed to cut carbon emissions by half by 2050 compared with 2008 levels. Maersk, the world’s biggest container shipper, has invested €1 billion in since 2014 in energy efficiencies, and says it aims to be carbon neutral by 2050.

But the EU is seeking firmer, legal deadlines for cleaner shipping. In September 2020, the European Parliament voted for measures making shipowners pay for their pollution by bringing shipping into its carbon market, the EU Emissions Trading System (ETS) from 2022.

Shipping companies are not included in the ETS, which obliges factories, power plants and airlines to pay for what they emit within Europe by buying carbon permits. “It is high time that the ‘polluter pays’ principle is applied to shipping,” said Jutta Paulus, the Green MEP who drafted the measure.

The shipping industry has criticised the EU move, saying the ETS carbon fee would amount to an extra trade tariff. Some calculations say it would add at least €4,000 a day to the average tanker’s operating costs. The World Shipping Council (WTS), which represents container operators, says it will create trade tensions and raise legal and diplomatic concerns about the EU’s jurisdiction.+

The speed of engine development

The EU has been here before. It tried to bring airlines into the ETS in 2012, but the move was scaled back to cover only flights within Europe after fierce opposition from other countries, notably the US, which said it was a tax on assets beyond European territorial jurisdiction.

Yet even if it works, the ETS is only part of the answer to cleaner shipping. If the industry is to shift away from its polluting heavy fuel (also known as bunker fuel), it needs other options.

So far no viable alternatives are available, as the critical fuel and engine technologies for clean shipping have not developed fast enough. Fully electric ships that can store enough energy for long distance sea voyages are unlikely before 2050. Liquified natural gas (LNG) and biofuels are improvements on heavy fuel, but they are not viable long-term. While hydrogen is a promising solution, there are still problems with storage: compressed hydrogen takes 15 times more space compared to diesel for the same amount of energy.

A truly clean solution will take time and cost money. The global shipping industry needs to spend at least €1 trillion on new fuel technology by 2050 if it is to decarbonise, according to a study published in January by UCL and the Energy Transitions Commission.

That is a huge sum. Given the importance of shipping – some 90% of global trade is carried by sea – it is a cost that can be borne. The real question is how long it will take. The EU’s new measures could be an incentive to make shippers sail faster.