The World Shipping Council (WSC) is calling on the International Maritime Organisation (IMO) and energy providers for regulations that would speed up the development and production of sustainable fuels as the industry targets to reach net zero emissions by 2050.
In a statement, the WSC said liner shipping is committed to decarbonising quickly and efficiently, and to support this process, the WSC has published its first contribution to negotiations at IMO MEPC 81, with a paper outlining four cornerstones critical to an effective IMO GHG agreement.
The primary industry trade association representing the international liner shipping industry noted that to deliver on the goal of net zero emissions for shipping by 2050, IMO greenhouse gas regulations must rest on solid foundations.
"Liner carriers are committed to delivering on the 2050 net zero target and are already investing in renewably propelled ships. To ensure there are renewable fuels available to run those ships in a competitive manner, energy providers must see regulations written in the next two years that demonstrate sufficient demand for new fuels to justify the massive investments needed in the immediate future," said John Butler, president & CEO of the WSC.
"The challenge for member states at IMO is not just to agree but to agree on regulations that will provide investment certainty. If we can get this right from the beginning, we will speed the energy transition and make it more affordable by avoiding stranded investments," he added.
The WSC said its paper MEPC 81/7/2 details the four cornerstones that WSC considers critical to an effective global legal instrument as a formal contribution to IMO climate negotiations: setting GHG Fuel Intensity Standards upfront to provide investment confidence and a clear Pathway to 2050; establishment of an effective economic measure or GHG price to incentivise investment; enabling the transition with vessel pooling; and build in full life cycle transparency to deliver climate results.
"Decarbonising shipping will require billions in investments in technology development, vessels, renewable energy production, and supply. Investments are only made if there is confidence and certainty in future requirements," the WSC said.
It added that this means that each of the GHG fuel-intensity standards that will apply between now and 2050 needs to be defined upfront at the time the regulatory agreement is made.
It added that leaving future GHG intensity standards to be defined later would not provide the certainty needed to invest with confidence.
"Demand certainty is essential to both shipowners and energy providers that need to invest in new ships and renewable fuel production to transform the global fleet."
The WSC report said to reach our climate targets on time, IMO's financial measure must be strong enough to make it economically rational and attractive for both ship owners and energy providers to invest in fuels and technologies that deliver deep GHG reductions from the start.
It added that the industry can only reach net zero by re-orientating shipping to renewable energy sources.
"Pooled" vessel compliance with an IMO low GHG fuel standard will allow companies to invest in innovative zero-emission technologies and count the GHG impact across a fleet of ships. This will enable the necessary transitional investments in step-change technologies and minimise spending on incremental efficiencies with only short-term impact.
WSC said the IMO GHG Strategy sets out a clear timeline that will make it possible to deliver on the promise of a decarbonised shipping industry by 2050.
To protect our climate, it said that it is crucial that IMO member nations maintain this timeline, putting the necessary regulatory framework in place by 2025 for implementation in 2027.
"Liner shipping wants to decarbonise our industry as soon as possible, and we will continue to lead the way in enabling shipping’s transition to zero. But we cannot do this alone, and we cannot do it without the volumes of renewable energy and fuels this transition requires," Butler said.
"If IMO member nations build upon these four cornerstones in developing future greenhouse gas regulations, the shipping industry and fuel providers will have the necessary investment certainty to reach our goal. It is time to move from ambition to action and work together to deliver net zero by 2050," the WSC chief added.