Climate change

At current growth rates, shipping could represent some 10% of global greenhouse gas emissions by 2050. Which measures could reduce its contribution to climate change?

What’s being done about shipping’s climate impact?

In June 2023, the IMO’s 175 member states failed to agree on absolute emission reduction targets for 2030 and 2040, but identified “indicative checkpoints” of at least 20%, striving for 30% emission reduction by 2030, and at least 70%, striving for 80% reduction by 2040. The strategy also aims to reach only net-zero “by or around, i.e., close to 2050”, depending on “national circumstances”.

While this brings shipping closer to the Paris Agreement’s temperature goal than before, it is far from sufficient to ensure shipping contributes its fair share to limiting the global temperature rise to 1.5°C, which would require emissions to halve by 2030 and reach zero by 2040, and will see shipping exceed its 1.5°C carbon budget between 2032 and 2033.

EU efforts

At the European level there is more hope. In 2023 the EU agreed to include international shipping emissions in the EU’s carbon market (ETS). As part of FuelEU Maritime – the EU’s green fuel law – ships will be required to increasingly switch to sustainable fuels and at least 2% of the bloc’s shipping fuels will need to come from e-fuels derived from renewable electricity by 2034, at the latest.

However, the EU’s landmark green shipping law will still leave the bloc dependent on fossil fuels beyond 2050. T&E’s review of the EU’s FuelEU Maritime shows that EU shipping will fall behind where it needs to be in every decade up to and beyond 2050, meaning the sector will almost certainly overshoot the target of keeping global heating to 1.5 degrees.

Should shipping be included in the emission trading system?

In 2016, after the adoption of the MRV Regulation and the Paris Agreement, there was still no sign of global action at IMO meetings. This led the European Parliament to push for the inclusion of shipping in the EU emissions trading system (ETS) after the European Commission failed to include the sector’s emissions in their phase 4 ETS review proposal. The proposal would include EU-related shipping emissions under the ETS from 2023 if the IMO has not delivered a global deal with short-term measures to reduce emissions from shipping by then – coinciding with the end of the IMO’s seven-year GHG work plan. According to the Commission’s own 2013 impact assessment, shipping CO2 emissions could be reduced cumulatively by 80 million tonnes by 2030 – the total annual emissions of Austria – if the sector were included in the ETS.

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What about air pollution from ships?

In October 2012 the European Council formally adopted the revision of the EU Directive limiting the sulphur content of fuels used by ships in EU seas. From January 2015, ships were only allowed to use fuels with a maximum of 0.1% sulphur content, down from 1.5% previously permitted in the North Sea, Baltic Sea and English Channel. They could either use cleaner fuels, which are more expensive, or install abatement technologies such as scrubbers.

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In parallel, ships sailing in other EU waters and the rest of the world will be allowed to use fuels with a maximum of 0.5% sulphur content from 1 January 2020 (adopted by the IMO in 2016). T&E played a significant role in securing 2020 as the effective start date of the global 0.5% sulphur content limit. T&E, through the Clean Shipping Coalition, secured a seat at the steering committee overseeing the IMO fuel availability study. The study has analysed whether or not there would be enough 0.5% sulphur content compliant fuel available in 2020 to start the new standard in 2020 or delay it to 2025. At the steering committee, T&E made sure the study was performed by a neutral consultant (CE Delft) and not the one favoured by industry, which had in the past concluded there would not be enough compliant fuel in 2020. The sulphur cap enters into force January 2020.