Getting to Zero Coalition: Policy action is required to accelerate the zero-emissions transition

To this end, industry action and technological development alone are not enough, Mrs Jegou says, highlighting that a supporting policy framework is vital to make maritime decarbonization possible. Furthermore, collaboration, coordination, and co-investment with other industries and new entrants will be necessary.

SAFETY4SEA: What does climate action mean for the maritime industry? What is the leadership required to shape a sustainable future of global shipping?

Ingrid Sidenvall Jegou: The maritime industry has come a long way in shifting its positions on climate. Not that long ago, climate wasn’t a priority for the sector. Then, with the adoption of the IMO Initial Strategy on GHG in 2018, the sector began to focus on finding solutions for the industry to reduce its carbon footprint and move towards the IMO goal of reducing carbon emissions by at least 50% in 2050. It is in this context that we launched the Getting to Zero Coalition, an industry Alliance of more than 200 stakeholders within the maritime, energy, infrastructure, and finance sectors, supported by key governments and IGOs. The Coalition- a Partnership between the Global Maritime Forum and the World Economic Forum- is working together to get commercially viable deep sea zero emission vessels powered by zero emission fuels into operation by 2030. This is the industry showing leadership.

The Coalition’s recent Call to Action for Shipping Decarbonization furthermore points to the need for shipping to align with the Paris Agreement temperature goal and be run entirely on net-zero energy sources by 2050. Shipping cannot make this transition on its own. It will take the active involvement of all parts of the value chain (shipping, energy, infrastructure, finance) as well as governments and IGOs to make this happen. Leadership is also required at the political level. A supporting policy framework will be needed to make the transition possible. There’s a role for national governments to shape and incentivize the transition, individually and in partnerships, while over time policies and regulations to support shipping’s decarbonization must also be adopted at the global level. Importantly, the transition needs to be inclusive, leaving no one behind. The maritime industry must come together with policy makers and experts to understand the concerns and needs of the most vulnerable countries and populations and ensure these are being properly addressed for a just and equitable transition be possible.

S4S: What are the top priorities in Getting to Zero Coalition agenda for the next five years?

I.S.J.: The overall ambition of the Getting to Zero Coalition is to have commercially viable Zero-Emission Vessels operating along deep-sea routes by 2030. The Coalition’s recent Call to Action for Shipping Decarbonization furthermore points to the need for shipping to be run entirely on net-zero energy sources by 2050. To reach this goal, 5% of the fuels need to be zero-emission by 2030. Delivering on these shared objectives requires collaboration and commitment from a broad range of stakeholders, and accurate and timely responses by decision makers around the world. Triggering industry and policy action, with the actions of one reinforcing those of the other in a productive ambition-loop, are a top priority for the Getting to Zero Coalition to reach its ambition by 2030.

On the one hand, the Coalition will therefore seek to turn industry engagement into concrete action, not least through the development of deep-sea Green Corridors with participation from Getting to Zero member companies. On the other hand, the Coalition will foster engagement with policy makers to inform and support policy action, towards the adoption of a revised GHG strategy at the IMO setting a zero in 2050 target, as well as the agreement on the measures needed to ensure this in a just and equitable manner.

S4S: How will new trends, new technologies and innovation influence our long-term ambitions and the way we achieve them towards a zero-emission shipping industry?

I.S.J.: The shipping sector needs to decarbonize and is actively looking into the technological options for how to do that. The Getting to Zero Coalition has spent quite some time on exploring the new fuels and technologies, but also derisking mechanisms and business models that are required for the shipping’s transition.We now know that the fuel pathway is not predetermined but will be laid brick-by-brick and is shaped by narratives as well as technology development. Many steps can be taken now, but the pathway is bound to evolve over time.

With the Getting to Zero Coalition, we seek to catalyze first mover projects that will test new technologies and business models. We’re also very engaged in supporting the development of green corridors, which will be instrumental for getting the transition underway. “Green corridors” refers to the implementations of specific trade routes between major port hubs, where zero-emission solutions have been demonstrated and are supported, and can create favorable conditions for accelerated actions, bringing solutions to the water faster and at a meaningful scale.

Much of the R&D, innovation and pilot projects are currently taking place in the industrial world, often with considerable amounts of public funding involved. For the transition to be just and equitable, there will also be a need to ensure that technologies are developed and adapted in collaboration with developing countries, especially the least developed countries and island states, meeting their specific needs. There’s a role both for governments and IGOs and for industry in that endeavor. This is something that we’ll be looking into with the Coalition over the years to come.

S4S: From your perspective, what are the key barriers that the maritime industry is currently facing with regards to decarbonization? What are your suggestions to turn these into opportunities?

I.S.J: The transition to zero-emission shipping has a lot in common with the transition of other sectors, where you risk running into the “chicken-and-egg” problem when the value proposition of two separate groups is dependent on penetration in the other. Policy support will therefore be needed- a strong signal that the transition is underway can provide the industry with the necessary confidence they need to make their investment decisions. First movers, who are willing to take risks and seize strategic advantages, will play a big, important role. Perhaps even more than for other industries, however, shipping will have to look beyond its own sector. Collaboration, coordination, and co-investment with other industries and new entrants will be necessary. The current geopolitical, deeply disturbing situation, with great human suffering involved, is adding complexity also to global energy supply, as well as to the ability to focus on energy transition. Like everyone else, we cannot fully gauge the impacts of the current crisis, but we cannot afford to lose pace if we are to mitigate severe climate change.

S4S: Following the COP26 summit, what is your wish list for the industry and/or regulators and all parties involved towards decarbonization?

I.S.J.: At COP26 in Glasgow, more than 200 industry leaders delivered A Call to Action for Shipping’s Decarbonization, urging government and industry to play their parts in bringing the sector’s emissions to zero by 2050. There was also widespread recognition of what the industry needs to achieve this decade. Shifting five percent of the industry’s fuel use to scalable zero-emission fuels by 2030 can get zero-emission shipping to the maturity level needed to transition rapidly from there. High on our wish-list – and on that of the maritime industry of the Getting to Zero Coalition – is for governments and the industry to respond to this Call to Action and take action to align shipping with the Paris Agreement temperature goal. We therefore hope to see an increase of ambition at the IMO towards full decarbonization by 2050 the latest, together with market-based-mechanisms being designed and adopted. We also need policy to support a just and equitable transition.

S4S: In your view, has our industry realized the importance of ESG?

I.S.J.: The private sector is already taking important steps to decarbonize global supply chains. With our recent Report on Climate Commitments by Signatories to the Call to Action for Shipping Decarbonization, a wide support in the maritime ecosystem for shipping decarbonization by 2050 is demonstrated, including support from unions. It also shows that the private sector is already committed to a zero-emission shipping transition with concrete actions, targets, and plans.

S4S: How can the maritime sector tackle with ESG issues proactively?

I.S.J.: Transparency is a key aspect of ESG, and one that has improved substantially over the past decade. If you can’t measure, you can’t improve. Transparency and ESG reporting at large will be crucial to maintain a license to operate over the years to come. But reporting in isolation is not enough, and standards are needed to allow for apple-to-apple comparisons for meaningful ESG reporting. That is what the Sea Cargo Charter and Poseidon Principles for Financial Institutions and Marine Insurance were set to do. All three initiatives establish a common, global baseline to quantitatively assess and disclose climate alignment with adopted climate goals, thus, serving as an important tool to support responsible decision-making, but also creating the demand for a decarbonized industry. These initiatives, which are managed by the Global Maritime Forum, contribute to the ambition of the Coalition.

S4S: If you could change one thing that would have an either profound or immediate impact on industry’s green performance, what this one thing would it be and why?

I.S.J.: Policy action is required to accelerate the zero-emissions transition – Industry action and technological development alone will not be enough to ensure commercial viability in the short and medium term. Policy instruments and market-based measures can close the competitiveness gap between fossil fuels and zero-emission alternatives in shipping. A global carbon levy can help close the competitiveness gap between fossil and zero-emission fuels and ensure a level playing field, and a just and equitable transition, if parts of the funds generated are channeled into supporting vulnerable economies. A significant competitiveness gap between incumbent fossil fuels and alternative zero-emission options is a hindering factor for this transition to happen. Motivating first movers is a key challenge to kickstarting a zero-emission future for shipping. Opportunities for first movers therefore need to be more tangible, while de-risking their investments through a range of policy and incentive measures. There is a need to stimulate research, development & deployment (RD&D) funding for new fuels and technology, improving access to deployment finance, and creating customer demand for zero-carbon solutions to lower investment risk. The development and deployment of new solutions incurs extra costs and risks, which must be shared across a broader set of stakeholders to lower the risk for individual companies or subsets of the value chain. Public investment combined with business leadership can accelerate R&D and innovation into the zero carbon energy sources for shipping. This is why the Global Maritime Forum is engaged with the Mission Innovation, a global initiative that seeks to drive investments in clean energy and accelerate international public-private collaboration to scale and deploy new green maritime solutions.

S4S: Do you have any new projects/ plans you would like to share with industry stakeholders?

I.S.J.: Building on the findings of the Coalition’s Transition Strategy published in 2021, the Coalition will in 2022 continue to shape, inform, and catalyze industry action and foster engagement with policymakers.The promotion and development of deep-sea Green Corridors is a core focus of the Coalition going forward. With a focus on the promotion and development of Green Corridors globally, this work will be supported by an Advisory Group on Green Corridors. The group will be focusing on global networking and sharing of best practice, as well as the creation of taskforces to support the development of specific Green Corridors.

Following the second edition of the Getting to Zero Coalition’s Mapping of Pilot and Demonstration Projects launched a year ago, the Coalition published the third edition of the report this Spring. The Mapping aims to showcase the overall industry initiatives and activities taking place to decarbonize shipping, and the new iteration of the Mapping has been expanded to include more projects, collecting more data about each. Special efforts will also be made to include developing countries in the transition. In 2021, we published three reports focusing on Indonesia, Mexico, and South Africa, focusing on the roles and opportunities of the three countries in the global maritime fuel transformation. Building on this work, three new reports will be published in mid-May, expanding the perspective to concrete opportunities in the three countries. The first three reports can be found here: Mexico, South Africa, and Indonesia.

The views presented hereabove are only those of the authors and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.