Steering the maritime industry towards sustainability

Bold initiatives and innovative projects are guiding the sector to a low-emission future

As the European Union (EU) steps up its efforts to reach climate neutrality by 2050, the environmental impact of maritime transport is becoming harder to ignore.

Shipping may be essential for global trade, but it’s also a growing source of carbon emissions, which could slow down the EU’s progress toward its climate goals.

In response, the EU has introduced a series of bold measures, including the Fit for 55 package and the FuelEU Maritime initiative, aiming to cut shipping emissions by 55 per cent by 2030.

Leading the way in this green transition is Cyprus, with forward-thinking projects that show how ports can play their part in achieving the EU’s ambitious climate targets.

The economic significance of shipping

Shipping is undeniably an economic powerhouse in Europe. In 2019, maritime transport contributed a notable €34.3 billion in Gross Value Added (GVA) to the EU economy. It serves as the backbone of global commerce, handling 77 per cent of the EU’s external trade and 35 per cent of its internal trade.

EU ports manage nearly 4 billion tonnes of goods annually, representing half of all goods traded by weight between the EU and external markets, including the UK.

Furthermore, the EU’s passenger fleet, with the capacity to transport up to 1.3 million passengers, accounts for 40 per cent of global passenger transport capacity.

Maritime transport and its emission challenge

Although maritime transport is one of the most energy-efficient ways of moving goods, it remains a growing source of global emissions.

In 2018, shipping emitted over 1,000 million tonnes of CO₂, accounting for roughly 2.9 per cent of global human-made emissions.

Worse still, projections show these emissions could rise by up to 130 per cent of 2008 levels by 2050.

If left unchecked, this increase could undermine the Paris Agreement’s goals of limiting global warming to well below 2°C, with an aim of keeping it to 1.5°C.

The EU is not immune to this issue, in 2021, shipping alone generated over 124 million tonnes of CO₂. Without intervention, this figure will only rise, complicating Europe’s efforts to combat climate change.

This urgency has led the EU to take decisive action through regulations like FuelEU Maritime and the inclusion of shipping emissions in the Emissions Trading System (ETS).

The EU’s response: FuelEU maritime and the ETS

The EU’s strategy for addressing maritime emissions is centered on the FuelEU Maritime regulation, which comes into force in 2025.

This regulation sets out to reduce the greenhouse gas intensity of fuels used in shipping by 2 per cent in the first year, with gradual reductions leading up to an 80 per cent cut by 2050.

In practical terms, this means a shift away from dirty fuels towards renewable energy and low-carbon alternatives.

The ETS, meanwhile, began covering maritime emissions in January 2024, requiring large ships entering EU ports to pay for their emissions.

This phased approach gives the industry time to adapt, with ships required to surrender emission allowances for 40 per cent of their emissions in 2025, rising to 100 per cent by 2027.

Industry sources explained that these steps provide clarity for the sector, allowing shipping companies, investors and fuel producers to accelerate the green transition with a clear roadmap.

Green ports in Europe: Driving sustainability

Ports, as essential hubs in the global supply chain, also contribute significantly to greenhouse gas emissions.

Recognising this, the concept of “green ports” has gained momentum across Europe, aiming to reduce the environmental footprint of port operations.

According to the World Economic Forum, green ports focus on reducing air and water pollution, optimising energy consumption and embracing renewable energy sources like solar power. Green ports are also committed to sustainable transport and effective waste management strategies.

A prime example is the development of green shipping corridors, where several European ports, including Rotterdam, Antwerp and Helsinki, are partnering with shipping companies to implement alternative fuels like green methanol.

These corridors represent a major step forward in reducing emissions, as green methanol, sourced from green hydrogen and waste decomposition, cuts Greenhouse gas (GHG)  emissions by at least 60 per cent compared to conventional marine fuels.

Take Hamburg, for instance, where the port has ambitious sustainability targets, aiming for carbon neutrality by 2040. This includes significant investments in shore power capacity and hydrogen refueling stations.

These initiatives reflect the growing commitment of European ports and maritime industries not only to improve operational efficiency but also to meet the EU’s ambitious climate goals.

A spokesperson from the Port of Antwerp-Bruges highlighted the importance of collaboration in green initiatives, saying that “This partnership signifies a crucial step forward in nurturing eco-friendly shipping corridors and encouraging the use of alternative fuels,” adding that “it reinforces our steadfast commitment to environmental stewardship in the Baltic Sea and Scandinavian region, which plays a vital role for our port.”

The Port of Helsinki was chosen as a destination for methanol-driven container ships from summer 2024 onwards.

Green shipping in Cyprus: Leading the way

Cyprus has been making impressive strides in green shipping, particularly through its ports. As a key maritime hub, the island is playing an important role in green shipping initiatives, especially at Limassol, its largest port.

The port is spearheading several innovative projects, such as the BlueBARGE project, which is co-financed by Horizon Europe.

This initiative involves using floating barges to provide renewable electricity to ships at berth, significantly reducing their reliance on diesel generators and improving air quality around the port.

Cyprus is also focusing on the implementation of cold ironing technologies, allowing ships to connect to shore-based power and shut off their engines while docked. These efforts are part of a broader EU strategy to meet the targets set out under the FuelEU Maritime initiative.

In 2024, the Cypriot government introduced incentives to reward greener practices in shipping, including a 30 per cent reduction in annual tonnage tax for vessels that significantly cut their emissions.

“These measures”, according to Deputy Minister for Shipping Marina Hadjimanolis, “are designed to support the transition of the Cypriot flag and the wider maritime community towards more sustainable shipping methods.”

Former Transport Minister Yiannis Karousos has reiterated that Cyprus’ ports face the challenge of aligning with the EU’s Fit for 55 targets, which require significant reductions in waste and emissions by 2030. “The Cyprus Ports Authority will have a critical role to play in achieving these goals,” Karousos said, highlighting the importance of upgrading port infrastructure and improving sustainability efforts.

The role of technology and global collaboration

A key factor in cutting emissions is the rapid adoption of new technologies. The FuelEU Maritime regulation encourages innovation, allowing shipping companies to choose the fuels and technologies that best suit their vessels.

Hydrogen, ammonia and biofuels are seen as major players in the future of low-emission shipping.

Furthermore, the EU has mandated that ships use onshore power supplies or other zero-emission technologies while docked, cutting emissions in port areas.

On a global level, the International Maritime Organisation (IMO) is also playing its part. In July 2023, the IMO committed to new targets for reducing GHG emissions, with a full basket of measures set to be adopted by 2025.

These global efforts, alongside the EU’s regional initiatives, are vital to ensure that the shipping industry doesn’t undermine the goals of the Paris Agreement.

Economic and social benefits

The shift to greener shipping offers both environmental and socio-economic benefits. Cleaner ships mean cleaner air, especially in and around busy ports, which will lead to better health outcomes for nearby communities.

Moreover, the move towards low-carbon technologies is expected to create new jobs, particularly in renewable energy and fuel production.

The ETS will also help level the playing field between traditional and greener maritime fuels by reducing the cost gap. This is expected to spur the large-scale production of renewable maritime fuels, a crucial step for long-term sustainability.

Europe’s green shipping revolution is paving the way for a more sustainable future and Cyprus is playing a key role in this transformation. With a mix of regulatory measures, financial incentives and a commitment to innovation, both the EU and Cyprus are demonstrating how shipping can evolve to meet the challenges of climate change.

As the European Commission has pointed out, “the maritime sector is key to the EU’s climate goals,” and through advancing cleaner technologies and enforcing regulations, a sustainable future for shipping is now within reach.