January 13, 2022: It is essential that the priority this year is not only to meet the huge demand that the very complex and congested markets are experiencing which have emerged in the midst of Covid, but also to ensure that it does not is not decoupled from decarbonization efforts, says Soren Toft, CEO of the Mediterranean Shipping Company (MSC).
“Collaboration is key to achieving the ambitious decarbonization goals set by the shipping industry,” Toft said during his keynote address at DNV’s Fuel of the Future conference earlier this week as part of the annual Nor-Shipping convention. “MSC itself is already fostering industry-wide and cross-sector collaboration to enable the massive investment needed to decarbonize shipping. As the company continues to invest in low-carbon technologies and exploring different fuel options, carriers in general continue to struggle with a lack of solutions available at scale,”
As shipping volumes have increased over the years, the environmental emissions produced as a byproduct of delivering goods around the world have also increased. “Today the rate of increase in emissions has started to decline, but there is still a long way to go to make the fight against climate change a global imperative. Container companies like MSC must continue to do their part to help mitigate the impact of climate change while continuing to operate responsibly to meet the ever-increasing demands of global commerce.”
With the cost of decarbonizing shipping estimated at trillions of dollars, carriers must make capital-intensive decisions that will last decades, Soft added. “Urgent investment and a better understanding of how business and society will share the cost burden are also needed. The transition to a low-carbon economy requires broad collective action and productive partnerships with our stakeholders at through and beyond shipping.”
Maersk cuts its zero carbon target by 10 years; Hapag will reduce CO2 intensity by 30%
The speech is significant because Maersk had announced it was reducing the net zero carbon target by 10 years. Tangible short-term targets for 2030 include a 50% reduction in emissions per container transported in the Maersk Ocean fleet and a 70% reduction in absolute emissions from fully screened terminals.
To achieve decarbonization by 2050, the shipping industry will need to use at least 5% zero-emission fuels by 2030, says Janin Aden, Senior Director, Sustainability, Hapag-Lloyd. “Hapag-Lloyd aims to reduce the CO2 intensity of its entire fleet by 30% by 2030. By 2045, we are determined to make the operation of our vessels completely climate neutral.”
Climate-neutral fuels will be the most effective way to minimize CO2 emissions in shipping, Aden added. “However, at present, there are many uncertainties related to investments. In fact, at present, we do not even know which climate-neutral fuels will be available in sufficient quantities in the future.
“Given that container ship investment cycles are typically around 25 years, it is clear that every new vessel ordered from now on will need to be designed to meet future needs. Given the huge sums of investment for new ships and the current uncertainty regarding which fuels will ultimately emerge as the primary ones, ship propulsion systems must allow for as many options as possible.”
Prevention of greenwashing
“Green finance consists of promoting decarbonization while creating appropriate financial incentives,” says Aden. “This financing is currently in high demand: in a real win-win situation, companies benefit from a price advantage for projects geared towards sustainability. . But for this type of financing to work, there must be high standards – and no greenwashing. In this case, the lending banks take on a gatekeeper role, as they are the ones who ultimately ensure that green is truly green.”