The year 2050 might seem distant, yet in the context of the green transition of global supply chains, the deadline is rapidly approaching, World Economic Forum highlights.
Decisions being made now are ones that will determine the shipping sector’s ability to decarbonize and achieve net-zero emissions by 2050.
Global trade is highly dependent on fossil fuels. Indeed, there are container vessels being built today for sailing on fossil fuels for decades to come.
It is clear that our industry needs mechanisms that can bridge the transition from fossil-based to low emissions fuels without causing inflationary pressure and while maintaining competitive fairness.
Shipping most effective and greenest form of transportation
Close to 90% of all trade is ocean based. Moving goods by sea is by far the most effective and environmentally friendly mode of transportation.
However, given the scale of ocean-based trade, it comes with a significant greenhouse gas footprint. In total, close to 3% of the world’s greenhouse gases (GHGs) are emitted from seagoing vessels. And if they look beyond shipping, the global supply chain accounts for 11%.
The good news is that bold actions have been taken across the value chain in the last few years by liners, energy providers and cargo owners. The first five vessels with dual-fuel methanol engines are in operation today with more than 175 methanol-capable container vessels on order by the industry.
This is important because a vessel built today will sail the oceans for another 20 to 25 years. Other low emission fuel types will also join the fuel mix of the future; biomethane, biodiesel and ammonia.
Clearly, the low emission container shipping demand is there and so is the will and the roadmaps to get us to net zero. The future of net-zero shipping must at the same time be financially sustainable.
Otherwise, the much-needed scaling and acceleration of the fuel production will not happen.
IMO meetings ideal chances to close shipping’s fuel pricing gap
The 82nd & 83rd sessions of the United Nations International Maritime Organization’s (IMO) Marine Environment Protection Committee taking place in London in October 2024 and April 2025 offer the ideal opportunities to make sure that they steer towards closing this price gap. If IMO member states agree around ambitious mid term measures, they will accelerate the urgent transition in shipping, if not they will slow it down precisely when it’s more necessary.
Not acting now risks losing a remarkable chance at influencing a truly global regulation to remove the cost barrier to decarbonizing shipping and, by extension, the global supply chain. Not reaching an ambitious pricing mechanism now when most needed will slow the green transition in shipping and they will not be able to reach decarbonisation goals in time.
