Our website uses cookies so that we can provide a better service. Continue to use the site as normal if you're happy with this, or find out how to manage cookies.
X

SG Test RM Essay

This essay first appeared in Delivering Net Zero: Building Britain's resilient recovery

NEEDS MORE OF AN INTRODUCTION

Shipping

Robin Mortimer 

Amidst the terrible human impact, and long-term economic consequences of COVID-19, one of the few upsides of the current period has been an improved environment, particularly improved air quality. It is wrong to assume that environmental concerns are a luxury the economy cannot afford. Greater flexibility throughout the workplace through harnessing the use of technology and reducing fuel consumption should remain a focus going forward.
 
In the coming months, the Government and industry have a unique opportunity to recalibrate the public policy, regulatory and fiscal system to deliver sustained investment in low carbon infrastructure.
 
Emissions from international shipping are just under one billion tonnes a year and rising – currently equal to around 2.2% of the global total emissions.1 To put that into context, if that were a country, ‘Global Shipping’ would be in the top 10 countries in the league table of major emitters. In the UK context, shipping emissions account for around 3% of the UK total, just under 14mtCO2 pa.2 In addition, ports around the world also contribute to national emissions through cargo handling and ancillary operations.
 
Until recently, the maritime sector has been largely outside the mainstream discussion on tackling climate change – with the focus on achieving international sector-wide agreements, with lower hanging decarbonisation fruit available in power generation, other transport modes and other sectors. The policy shift to net zero 2050 changes that. If we are serious about achieving complete decarbonisation across global and national economies, no sector can be ignored or off limits.
 
The International Maritime Organisation (IMO), the only major United Nations (UN) organisation based in the UK, has in the last few years taken a lead in setting an ambition for international emissions – a 50% target for emission reductions, on a 2008 baseline.3 That ambition needs to be put in context: a do nothing scenario would see shipping emissions rise by between 50% and 250% given anticipated growth in global trade.4

“By bringing international emissions within national targets, as Bright Blue has argued, this will inevitably drive the political action required”

 
Coming back to the UK context, the recent Committee on Climate Change (CCC) report Net Zero – the UK’s contribution to stopping global warming, argued that it would be technically feasible to eliminate 96% of shipping emissions (domestic and international emissions attributed to the UK under agreed international methodologies) by 2050, with the residual offset by domestic sequestration measures.5 This assumes that there is a radical and rapid shift to new forms of propulsion – for example, based on ammonia or hydrogen fuels.
 
The most fundamental driver of action on climate change is societal pressure. A new high of 85% of the public were concerned about climate change in the summer of 2019.6 The political parties reflected this mood, with the 2019 election manifestos a bidding war for the most ambitious commitments on climate change, following the enshrining of net zero 2050 in law.
 
But how many of the public, if asked, would consider emissions from shipping a concern? I presume the answer might be low. That reflects a low level of public awareness of the vital role that shipping plays in global and Britain’s trade. Ninety five percent of our food, fuel, materials and goods arrive by sea.7 Yet, this is not widely understood and the sector is largely invisible to the general public.
 
So the sector itself must take a leadership position if it is to decarbonise on the scale required, both working to better inform the public about the role it plays and having a robust dialogue with civil society on the pace, costs and consequences of cutting its emissions.
 

“A do nothing scenario would see shipping emissions rise by between 50% and 250% given anticipated growth in global trade”

Whilst public awareness and pressure is the underlying precondition for change, the immediate and necessary driver will be clear and sustained international, national and local policy frameworks. This in turn will incentivise the scale of private investment required over a 30-year period.
 
We are beginning to see the first shoots of this through the IMO’s adopted goal at international level and in the UK through ‘Maritime 2050’ – the first long-term strategy for the sector in many years, published in 2019.8 But this policy framework, and the resources to underpin it, needs to go much further to create the necessary change.
 
Major British ports have made strides forward in reducing their environmental impact, principally through deploying less resource intensive equipment, while moving materials inland by ship has a 50 times smaller carbon footprint than by road. But we need to go further.9
 
To take one small example: a small number of ports around the world incentivise cleaner, more modern, vessels through ‘green tariffs’. The Port of London is the first to do so in the UK, with a green tariff introduced in 2018.10
 
Ideally, we would see a coherent long-term global approach to such incentives, informing the research and procurement practices of governments and private shipping companies out to 2050 and beyond. This still seems some way off.
 
One important issue yet to be resolved in the national policy debate in the UK is how far emissions from international shipping – and aviation, in fact – should be accounted for in national decarbonisation plans. In setting the world’s first legally binding net zero national target in 2019, the UK Government showed real ambition. However, neither international shipping nor international aviation emissions are included within five year carbon budgets, or the 2050 goal. There is logic to this. Unlike the power sector, for example, where action mainly rests at national level – we can choose how many offshore windfarms to develop – international shipping is outside the direct control of any national government. However, politically, the argument for exclusion is less strong. By bringing international emissions within national targets, as Bright Blue has argued,11 this will inevitably drive the political action required – whether this is the UK adopting a strong leadership role in international fora, or using national policy levers to incentivise new technology uptake. And if other countries follow suit, the risks for the ‘first mover’ will be quickly reduced.
 
Finally, a word on how this evolving context looks from a port operator perspective. A major challenge is the level of uncertainty about how technologies will develop and therefore what are the best investment decisions in the short-term. One example of this is the lively debate about ship-to-shore power, such as for cruise or cargo ships. Most research is pointing to hydrogen, ammonia or methanol (in some form) as the long-term solutions for low emission shipping. Does it therefore make sense to invest huge sums now in connecting terminals to the electricity grid, often requiring significant upgrades in local grid and generating capacity, if future vessels will be running on a zero-emission fuel? In some cases, the pressing need to address local air quality problems may make such investments compelling. But in others it may be better value-for-money to invest in longer term research or deployment of alternative fuel vessels.

“A small number of ports around the world incentivise cleaner, more modern, vessels through ‘green tariffs’”

 
In conclusion, the shipping and ports sector has not been at the forefront of the debate on climate change for the last 30 years. This reflects both the complexity and low-profile of this most international of sectors, but this is changing fast with clear targets being set at an international level and reflected in national policies. It also seems inevitable that the digitalisation of supply chains and the better use of data will only accelerate the pace of change. The next stage must be the development of more detailed policy frameworks and incentives to drive investment decisions to meet the hugely ambitious goals for 2050.
 
Net zero provides a most powerful organising signal to achieve this and to focus the political will needed. Port operators will likewise need to be alive to the long-term goal and base investment decisions with a 2050 frame in mind.
 
Robin Mortimer is the Chief Executive of the Port of London Authority, a Trust Port that supports the Thames economy through encouraging river use and providing essential safety services. Robin is writing in his personal capacity.
 
1. International Maritime Organisation, “Greenhouse gas emissions”, (2020).
2. Committee on Climate Change, “Net zero – the UK’s contribution to stopping global warming”, (2019), 147.
3. International Maritime Organisation, “UN body adopts climate change strategy for shipping”, (2018).
4. International Maritime Organisation, “Third IMO GHG study 2014”, (2014).
5. Committee on Climate Change, “Net zero”, 23.
7. Department for Transport, “UK port freight statistics: 2018”, (2018).
8. Department for Transport, “Maritime 2050: navigating the future”, (2019).
9. World Shipping Council, “Carbon emissions”, (2020).
10. Port of London Authority, “Green tariff”, (2017).

 

Related: