Shipping to require massive investments in decarbonisation, stresses IMO on eve of UN Ocean Conference
IMO Secretary-General Arsenio Dominguez has emphasised the global shipping industry's need for significant investment in technology and alternative fuels to achieve a net-zero transformation and drive sector-wide change at the Blue Economy Finance Forum in Monaco. The one-day was held on the eve of the United Nations Ocean Conference taking place in nearby Nice this week.
The global shipping industry is preparing for a net-zero transformation that will have a sector-wide impact on everything from supply chains and business models, to ships, ports and the maritime workforce.
IMO approved new regulations for net-zero ship fuels and emissions in April, set for adoption in October. Calls for investments in decarbonization are getting louder.
"Regulations alone cannot do the job. We need technological development and we need alternative fuels… And that can only happen in one way – with investment," said Secretary-General Arsenio Dominguez, speaking at the Blue Economy Finance Forum in Monaco.
This includes investing in scaling up production of alternative fuels in large enough quantities to replace the 350 million tonnes of fuel oil currently burned by ships each year.
Upgrading port infrastructure and bunker operations will also be required to safely provide clean energy for ships when they call at ports around the world.
"It is a complete transformation of the shipping business. It will take ecosystems to do it together," said Christine Cabau-Woehrel, Executive Vice-President of shipping and logistics company CMA CGM, at the same event. "It will be a long and difficult journey, but we want to be running in front."
Early movers are already taking action. According to the World Shipping Council (WSC), there are at least 200 container ships already in operation that can run on zero or near-zero emission fuels (ZNZ fuels), while close 80% of all new orders for container ships and vehicle carriers will have the same hybrid capability.
"The liner industry has already invested USD 150 billion in decarbonisation. It is unprecedented for the transport sector," said President of the WSC, Joe Kramek. "But we need the fuel supply... it's a tremendous investment opportunity."
The new set of regulations, known as the ‘IMO Net-Zero Framework’, takes a two-pronged approach: a global fuel standard that limits the greenhouse gas (GHG) fuel intensity of marine fuels, and a price placed on the GHG emissions from ships.
The regulations send a clear demand signal to fuel producers, while rewarding 'first movers' – shipping companies who take the risk to adopt low- and zero-emission solutions early, and who are then able to share their experiences and expertise with others.
The IMO Net-Zero Framework works alongside earlier measures adopted by IMO to enhance energy-efficient ship design, operational improvements and carbon intensity ratings. They will be reviewed every five years, with emission limits tightened over time.
Mr. Dominguez highlighted that these regulations are mandatory, to be applied to all ocean-going ships trading internationally, regardless of their flag.
There will be an impact on training, with nearly half a million seafarers requiring upskilling by 2030, and safety measures will need to be comprehensively updated to ensure fuels are deployed safely and efficiently.
Mr. Dominguez urged the international community to focus on concrete actions and implement the various global commitments already agreed.
"It's time for us to move from the statements and commitments into actions,” said Secretary-General Dominguez. “That's what we've been doing at IMO for over a decade. That is what we are going to demonstrate again in October, and we will not stop there,".
He added: "Decarbonisation has a cost. We have already spent money in polluting the environment. It is time for all of us to invest in cleaning it and making it sustainable for future generations."