Ideas
January 9, 2022 8:00 AM EST
Clerc is the CEO of Ocean & Logistics at A.P. Moller - Maersk

In 2021, because of the pandemic, we saw unprecedented supply-chain disruptions but also took important steps toward a decarbonized and sustainable global supply chain. It was a truly industry-wide effort, with Maersk and X-Press Feeders ordering what will be the world’s first container vessels running on carbon-neutral “green“ methanol—the first scalable carbon-neutral solution available for such ships—among the milestones.

Increased customer demand for green transport has helped push companies and shipowners to invest in in carbon-neutral vessels, and industry expectations are for this to not only continue in 2022, but to accelerate. Companies are waking up to the fact that progress is needed now and new solutions must be implemented on all aspects of the business. This is illustrated by the fact that the vast majority of container lines now stand firmly behind a net-zero target of, at the latest, 2050.

Shipping has long been caught up in a chicken-and-egg situation. No investment in vessels that can sail on carbon-neutral fuels has meant no investment in the development of carbon-neutral fuels and vice versa. With this vicious cycle broken and new, carbon-neutral vessels expected to hit the waters starting in 2023, the market for green shipping fuels is opening up. Beginning in 2024, Maersk alone will need between 300,000 and 400,000 metric tons of carbon-neutral fuel for its new methanol ships.

To sustain the newfound momentum, there are important regulatory components that must shape up. This past year has made it quite clear that the market is currently what drives developments in the area of decarbonization of shipping. Aside from the first investments in carbon-neutral vessels, this was most clearly demonstrated by a coalition of leading global retailers including Amazon, IKEA and Unilever who announced a target of switching all of their ocean freight to vessels powered by zero-carbon fuels by 2040. In 2022, the International Maritime Organization (IMO), the United Nations agency in charge of regulating shipping, will need to make significant progress on three points in order to steer the agenda the way it should.

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Firstly, the industry needs a more ambitious net-zero emissions goal. The current international target is to reduce greenhouse-gas emissions by at least 50% by 2050—but we actually need to be at net zero by 2050 at the latest to stand a chance to remain aligned with the Paris Agreement. In the coming year, we must acknowledge that reality and take significant steps to adjust the targets accordingly in 2023 when they will be up for review in the IMO.

We also need a “drop dead” date for the building of new fossil-fuel-powered vessels. Industries only function with clear and enforceable deadlines, so another goal for 2022 should be to support a hard stop—sometime in the coming decade—for newly constructed conventional-fuel-powered ships.

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Lastly, we need a substantial global price on carbon emissions to reduce the current cost gap between green and fossil fuels. A more punitive carbon price would go a long way in driving behavior change in the shipping industry. The European Union is currently working on its own regional measures, but the IMO should set an international price to create a level playing field—$150 per ton of greenhouse gas emissions is a good target and would generate enough revenue to help fund efforts to mature zero-carbon seafaring technology; partly cover operating expenditure for shipowners using renewable fuels; and help support climate-mitigation projects in developing countries—whether they are shipping-related or not. Climate change affects us all, but it affects some areas of the world disproportionately and we must use the resources we have to help those who are the most impacted.

The foundation for all of this has been laid, but starting in 2022, the shipping industry needs to move faster, act smarter and continue to make bold decisions.

This essay is part of a series on concrete goals the world should aim for in 2022 in order to put us on track to avert climate change-related disaster. Read the rest here.

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