Call for government action to promote low-carbon shipping

11 January 2022

Governments have been urged to create policies to encourage rapid investment into low-emission shipping to ensure the sector can meet growing customer demand for sustainable transport.

A report by industry body World Hydrogen Leaders, Hydrogen & Ammonia Shipping, said it was crucial for the decarbonisation of the sector to urgently promote investment into zero and low-emission vessels and renewable fuels like hydrogen and ammonia.

In October 2021 Amazon, Ikea, Inditex, Michelin, and Unilever were among the brands to say they would only purchase ocean freight services powered by “scalable zero-carbon fuels” by 2040.

“New policy frameworks need to be in place within the next few years. Under current policy and technology frameworks, fossil fuels are readily available, reliable, cheap – and compatible with existing ships and engines,” said the report.

“Without new policy or policies, these conditions can remain for decades.”

In order to promote low-emission shipping governments need to “close the competitiveness gap and enable a fair transition”.

Such instruments could include subsidies, emissions taxes and levies, the establishment of an emissions trading system or direct regulation.

The report cited figures from University Maritime Advisory Services in London and the Energy Transitions Commission estimating that it would cost $1tn to decarbonise shipping.

That figure was based on using ammonia as a primary low-carbon fuel source but it would change little if it was substituted by its main rival, hydrogen.

While around 13% of the $1tn figure would need to be spent on vessels, the remaining 87% would be spent on land-based infrastructure and facilities to produce clean fuels.

The benefits of ammonia as a low-carbon fuel are that it is cheaper and easier to store than hydrogen and cheaper to produce than other alternatives like methanol.

Hydrogen is more flammable and is seen as ideal for shorter journeys such as domestic shipping.

According to International Maritime Organization (IMO) figures in 2018 shipping was responsible for 3% of annual global greenhouse gas emissions. Fossil fuels currently account for up to 99% of shipping’s energy consumption.

The IMO has set a goal for shippers to cut annual emissions by at least 50% compared to 2008 levels by 2050.

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