Wake-Up Call for Shipping: Only Third Have Decarbonization Pledges
With the European Union nearing a final decision on its maritime emissions trade scheme and other countries increasing their focus on decarbonization, pressure is intensifying to achieve meaningful emissions reductions from the global maritime industry. Yet, despite increasing security on the industry a new analysis shows that just over a third of the major shipping companies have clearly expressed targets to get to net zero or made meaningful decarbonization pledges.
Saying that shipping is lagging behind other major segments, the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping, which published the assessment, calls its report a serious wake-up call for the maritime industry. “The state of decarbonization in the maritime industry shows that while real progress has been made, there is a long way to go for the industry to reach net zero within the limited time left to transition,” write the analysts from the independent research and development center.
Only 33 out of 94 of the major shipping companies (35 percent) have a clearly expressed target to be net zero by the latest in 2050 and/or have committed to IMO targets of 50 percent absolute reduction in 2050 compared to the 2008 level, reports the center. The assessment drew on published decarbonization ambitions and actions of the largest companies by owned capacity in tanker, bulk, container, and RO/RO-car segments. Together, the center reports these four segments cause a substantial share (70 percent) of global maritime emissions.
A comparison with other industries the center says suggests that 35 percent of shipping companies with IMO or net zero 2050 pledges is low. They highlight a 2020 KPMG report looking at top-100 companies by revenue in 52 countries across industries that found that 66 percent of automotive, 56 percent of oil and gas, and 45 percent of transport and leisure companies had sustainability reports with carbon reduction targets.
“We strongly encourage shipowners to set ambitious emissions reduction targets, preferably aligned with a net zero ambition for 2050 or sooner, and supplement the pledges with tangible targets and plans already for this decade,” said Bo Cerup-Simonsen, CEO of the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping.
With 100,000 ships consuming around 300 million metric tons of fuel annually, analysts estimate that the shipping industry accounts for around three percent of global carbon emissions. The center notes that as other industries tackle climate emissions shipping’s share is likely to increase in the coming decades. Their analysis shows that the container industry has the highest level of ambition with 16 of the 30 largest firms in the segment having set emissions targets for a 2050 timeline. This translates to 69 percent of the total container maritime fleet capacity in owned deadweight tonnage.
“Transparency is key for the transition, and there is no doubt that ship owners and operators will increasingly need to be transparent about climate targets and actions – not only towards regulators but also to live up to expectations from customers, investors, insurance, the greater public – and not least employees,” said Cerup-Simonsen.
They, however, also recognize that achieving the long-term target of decarbonization requires new fuel types and a systemic change within the industry. To accelerate the development of viable technologies, the center is calling for a coordinated effort within applied research across the entire supply chain.
While saying that action is needed from shipowners, the center is also calling for regulators to step up and implement mandatory reporting requirements of climate-related impacts subject to third-party auditing. They conclude that new legislation will be required to enable the transition toward decarbonization, but that the shipping industry faces serious challenges to catch-up with other industries.