Impacts of the Shipping Sector and Solutions to Decarbonise It

Decarbonising the shipping sector is key to achieving climate goals of limiting warming by 1.5C and achieving sustainability.

Around 80% of the world’s goods are moved through shipping, making the shipping industry the backbone of international trade. However, the industry is also highly carbon intensive, releasing billions of GHG annually and contributing up to 3% of annual global emissions, similar to aviation.

If no actions are taken to reduce emissions from the shipping industry, they could increase to 10% by 2050. Because emissions from shipping happen beyond national maritime borders, international cooperation is needed to achieve cleaner and greener shipping.

According to WEF, shipping fuel comprises heavy oils, commonly known as bunker fuel. When burned, these fuels cause high levels of pollutants, including harmful particulates and sulphur dioxide. Ship fuels contain around 2,000 times as much sulphur as diesel fuel used in cars.

Thankfully, a new generation of shipping fuels is emerging that could help decarbonise the sector. Green hydrogen and its derivatives, e-ethanol and e-ammonia, are becoming apparent as cornerstone solutions for maritime decarbonisation. Switching to these greener fuels aligns with the International Maritime Organization’s (IMO) net zero by 2050 goals.

Several options for design, operational, and economic solutions the shipping industry can apply to reduce its climate impacts are shown in the WEF infographic based on data from the IMO. According to WEF, switching to hydrogen and synthetic fuels could reduce shipping emissions by 80-100%.

What the International Maritime Industry is doing

In July 2023, the IMO agreed to a new climate strategy that includes reaching net zero by around or close to 2050. In the meantime, the IMO has set the target of cutting emissions by 20%- 30% by 2030 and 70%- 80% by 2040, against 2008 levels.

Despite these plans and many successive rounds of negotiations, the IMO has so far failed to adopt reduction measures to set the maritime sector on a pathway compatible with the temperature goals of the Paris Agreement.

In 2011, the IMO approved the Energy Efficiency Design Index (EEDI), the first globally binding design standard to mitigate climate change in the sector. The EEDI will be implemented in 2013 and apply to almost all new ships, requiring them to become more energy efficient. The standards will become increasingly strict over time.

Meeting the EEDI standard varies depending on the ship’s class and size. Typically, this process is divided into three phases:

• Phase I: an overall 10% improvement target in vessel energy efficiency applies to new ships built between 2015 and 2019;
• Phase II: ships built between 2020 and 2024 will have to improve their energy efficiency by 15 and 20%, depending on the ship type;
• Phase III: Ships delivered after 2025 will have to be 30% more efficient;
• Smaller ships have different efficiency requirements for each phase.

Surprisingly, the article in T&E shows that newer ships built in the first decade of 2000 are less fuel-efficient than those built in the 1990s. New ships, such as bulk carriers, tankers, and container ships, built in 2013 were, on average, 10% less fuel-efficient than those built a quarter of a century ago. According to the study, where the data is based, this contradicts the shipping industry’s narrative that it has constantly been improving its environmental performance.

Slow ships, lower CO2 emissions

Slowing ships’ speeds by 10% can lower their emissions by 27%. Slow steaming means the vessel is not at full power; it saves fuel, reducing carbon dioxide and air pollutant emissions.

BBC reports that in late 2021, demand for goods had exploded as COVID-19 restrictions eased and the world slowly began to return to normal. The sudden influx of vessels from Asia caused around 100 ships to line up before they could dock in Long Beach and Los Angeles ports, leading some to queue for more than a month.

The situation sparked an idea among port officials. If ships leaving Asia knew their place in the queue, they could time their arrival just in time to glide into an available berth rather than speeding just to get stuck in a bottleneck. The result was eye-opening: ships sailed at three or four knots slower across the Pacific Ocean, which not only eased the congestion but also prevented around 460,000 tonnes of carbon dioxide equivalent (tCO2e) emissions, according to Xeneta, an ocean and air freight analytics service.

During a 2011 seminar by T&E, a representative of Maersk, the world’s largest container shipping company, described how the company has been successfully using slow steaming since 2007 without any technical problems for ship owners. This has also allowed them to reduce fuel, maintenance, and operational costs.

Additionally, a report from the Dutch consultancy CE Delft showed that reducing the average operational speed of the world fleet can dramatically reduce global ship CO2 emissions even after considering the need to build and operate additional ships to deliver the same amount of transport work. 

Slow steaming is often regarded as the most cost-effective way to reduce CO2 emissions, as it can be done at almost no cost while translating into operational savings.