By Bud Darr, Executive Vice President, Maritime Policy and Government Affairs
Today, we are facing some of the biggest challenges yet. Climate change has become the defining topic of our time and on top of that, we are struggling with the short-term and long-term impacts of a global pandemic.
Overall, shipping currently contributes between two and three percent of manmade CO2 in the atmosphere. The issue is that as global trade continues to grow, so do shipping volumes. This will benefit the economy but has an impact on the planet.
A recent IMO study shows that carbon emissions from shipping continue to rise. While shipping actually improved its efficiency by around 11% between 2012 and 2018, if the sector does not find viable solutions to meet the loftier IMO goals and eventually decarbonise shipping, the GHG emissions from shipping are expected to increase by 50% or more above 2018 levels by 2050.
IMO has set goals to: 1) reduce the shipping industry’s greenhouse-gas emissions by at least 50% by 2050, 2) reduce the carbon intensity of emissions by 40% by 2030 and 70% by 2050, compared to 2008 levels. Meeting these goals is estimated to cost around $1.65 trillion. To fully decarbonise the shipping industry, particularly during this transitional period, partnerships are extraordinarily important. No one entity can get there on its own.
Lack of scalable solutions
To achieve the goals outlined in the Paris Agreement, drastic emission reductions must happen across all sectors. While shipping is recognised as the least greenhouse gas producing form of a mass cargo transportation, it is also one of the hardest industries to decarbonise. This is because there is a lack of scalable solutions available for the industry to make the transition. To put it simply, there is no one solution that would fit all or that could be considered a longer-term solution. There are a lot of lofty ideas and aspirations, but no real solutions at hand for us to purchase and install on our ships today.
The second biggest challenge is being able to predict the future of assets that are very long lived. We must make expensive capital decisions that will live on for decades. Aspirations cannot be made a reality unless all partners, including governments and academia, are willing to collaborate and commit to bring those solutions to the market.
At MSC, we are investing heavily in improving energy efficiency as well as operational efficiency.
The MSC Gulsun Class, introduced in 2019, is a great example of how to integrate energy efficiency measures into new ships. In addition, we have made significant energy efficiency improvements to our existing fleet through a massive retrofitting programme.
To complement these significant efforts to reduce emissions, we are exploring alternative options such as hydrogen, ammonia, fuel cells, silicon, batteries and bio-methane.
Let’s talk about alternative fuels and technologies
Today, the only commercially available options to significantly reduce emissions from the shipping industry at scale are improving energy efficiency, LNG or biofuels. None of these are going to provide a long-term or full solution alone. Biofuels have very low sulphur levels and low net CO2 emissions, however there are challenges to solve such as volumes, proper handling, sustainable sourcing and distribution. Both logistical and technical issues must be solved before biofuels can be scaled up for the shipping industry.
MSC has been pioneering responsibly sourced biofuels for a while now. We are past the trial phase and are on a routine basis using blends containing up to 30% biofuel in Rotterdam. Using large volumes of biofuel blends helps us reduce our carbon footprint and also makes a difference in other localised pollutants.
When we look at the long-term options to decarbonise shipping, hydrogen is one of the few that has emerged and that could potentially be a viable option for shipping lines. Here as well, there are significant challenges to overcome mainly related to density, storage and safe handling, but it could be possible to produce it in a greenhouse gas neutral way using green techniques to develop it at scale. The benefits of using clean hydrogen would be tremendous, in fact, the only emissions would be water vapour and warm air.
MSC has been following clean hydrogen developments for some time and we are actively engaging with industry to accelerate the development of clean hydrogen for shipping.
Is there a roadmap?
I believe this industry can decarbonise and it will decarbonise. Do I think it could be done by the second half of the century? Yes. Do I think by 50 percent by 2050? Yes. Do I know how we'll get there yet? No, I do not. That's where the innovation and technology, and investment comes in.
There must be a massive injection of energy and capital into R&D efforts to bring alternative fuels and alternative propulsion technologies to the marketplace for us to deploy and decarbonise in the longer term. We all need to work together, and we all need to take it over the finish line to get to where we need to be with decarbonisation in the end.
Read more in our latest sustainability report or visit msc.com/sustainability for more information about MSC’s approach to sustainability.
1) 4th IMO Greenhouse Gas Study, 2020, available at https://webaccounts.imo.org/Common/weblogin.aspx?ReturnUrl=%2fPublic%2fDefault.aspx&error_message=interaction_required