Today at COP 28, thirty shipping sector leaders have committed to scaling up zero-emissions fuel derived from renewables-based hydrogen to nearly 11 million tonnes by 2030.
Thirty leaders in the shipping sectors – including cargo owners, ship operators, ports, bunkering companies, and equipment manufacturers – signed a Joint Commitment, organized by the UN High Level Champions and RMI, today at COP28 to enable the use of renewable hydrogen-derived shipping fuel this decade to meet maritime industry decarbonization targets.
Commitments to decarbonization of the maritime sector, according to the statement
#1 Companies that work across the shipping value chain, are committed to the targets outlined in the IMO’s revised GHG Strategy, which we understand will require ~90% lower15 GHG intensity in international shipping by 2040, and which will drive steep demand for zero-emission fuels.
They will implement and use green corridors in the near-term to demonstrate zero-emission shipping and enable a mass-market transition to zero-emission fuel use starting in 2030.
#2 Ship owners, operators, and financiers will send a demand signal by:
- Investing in vessels capable of operating on the most competitive zero emission fuels, and the production of zero emissions fuels to meet the goal of at least 5% aiming for 10% zero-emission fuels use by 2030 and rapid scaling thereafter.
- Developing and sharing a strategy for fleet decarbonization in line with IMO’s “striving for” GHG reductions, and/or SBTi16 .
#3 Ports and port enablers (storage, distribution/logistics and supply/bunkering players, bunker suppliers, storage terminal operators), will support investment in green hydrogen (hydrogen-derived fuel) infrastructure and safety projects to support re-fueling of ships, and to become part of green corridor projects which help further incentivize the production of green hydrogen and hydrogen-derived fuels for use in shipping.
#4 Equipment manufacturers, commit to accelerating the RD&D efforts of machinery and equipment that enables the on land and onboard use of green hydrogen and hydrogen-derived fuels, and ensuring that manufacturing volumes will be available both for newbuilding and retrofit, in-line with the IMO’s revised strategy “striving for” ambitions.
#5 Cargo owners aim to only use ocean freight services powered by zero emission fuels by 2040.
#6 Green hydrogen producers, pledge to supply sizable shares of the 5.5, striving for an 11 million-ton 2030 production target for use by the shipping sector. Longer term, a decarbonized global shipping sector will become one of the largest demand sources for green hydrogen, projected to account for approximately 15% of total demand by 2050.
The Commitment also includes important targets for fuel use, fleet development, and port infrastructure needed to get the nascent green hydrogen industry to scale.
To reach targets set out in the International Maritime Organization (IMO)’s 2023 Strategy, adopted by 175 member states earlier this year, the average ship’s greenhouse gas intensity will need to be reduced by 86% by 2040.
Achieving this requires large-scale and rapid growth in the use of zero or near zero-emission fuels, of which green hydrogen-derived fuels like ammonia and methanol will play a crucial role. Legally binding international regulations that enter into force in 2027 will require the use of low-emissions fuels.
Signatories called on governments and the International Maritime Organization (IMO) to match and support their actions and help them collectively maximize the success of the 2030, 2040 and 2050 goals of the IMO’s 2023 GHG Strategy, and minimize the cost of shipping’s transition. They also called for:
- The IMO and member States to adopt an ambitious mid-term measure package in 2025 for entry into force in 2027, including a GHG Intensity fuel standard on a well-to-wake basis.
- The IMO and member States adopt a GHG pricing mechanism, for example a levy, as the most appropriate mechanism to achieve a just and equitable transition.
- That in combination, a levy and fuel standard creates strong policy support for 5% striving for 10% use of zero and near-zero emission fuels in 2030 and enables rapid scaling to achieve 70-80% emissions reductions by 2040.
- National governments to align supply side policy incentives with demand policies and ensure access to these for maritime actors, including mechanisms to provide long-term price certainty for producers while reducing risk for offtakers.
- Local and national governments put in place incentives to rapidly advance and scale green shipping corridors that include the infrastructure and workforce required to use zero-emissions fuels and support the pre 2030 operation of vessels on zero emission fuels.
- Alignment of global standards for well-to-wake GHG accounting frameworks that focus on cost-effective absolute emission reductions.
For a general shipping company such as MOL, there is no single solution for vessel fuel. We will promote the adoption of optimum fuels including hydrogen, ammonia and any other potential green fuels for each business on the premise of achieving net zero in 2050 and our interim milestones
… said Takeshi Hashimoto, CEO at Mitsui O.S.K Lines, Ltd. (MOL)
We’re not building big green energy projects; we’re catalyzing change. It’s time for a determined step forward to foster projects that go well beyond current thinking on scale and get us straight onto the scale up fast track
… explained Hewitt, CEO of CWP and chair of the Green Hydrogen Catapult.
Additionally, Rasmus Bach Nielsen, Global Head of Fuel Decarbonization for Trafigura, said: “We will only achieve the deep decarbonization of shipping by switching to zero-emission fuels derived from renewable-based hydrogen. As one of the world’s largest charterers of vessels, the commitments we are making alongside others should encourage investment by ports and port enablers serving shipping routes to invest in the necessary infrastructure. This in turn will help further incentivize the production of green hydrogen and hydrogen-derived fuels for use in shipping.”
To succeed, all industry stakeholders along the value chain need to stand together.
… added Keld R. Demant, CEO of Bunker Holding Group
Further on the subject, Demant of Bunker Holding Group, clarified that to stimulate the demand and supply of zero or near-zero fuels, IMO should adopt pricing incentives as well as requirements for alternative fuels. Regulatory insurance is a prerequisite for the necessary investment in production, infrastructure, and new vessels.
At MAN Energy Solutions, we strongly believe that shipping is the ideal enabler for a hydrogen ramp-up, consuming as it does around 300 million tons of conventional fuels annually
… said Uwe Lauber, CEO of MAN Energy Solutions.
