4 December 2023 (Lloyd's List) - THE shipping industry is demonstrating its decarbonisation progress in the past year at COP28 on the back of the the International Maritime Organization’s more ambitious strategy adopted in July 2023.
Five major shipping companies including CMA CGM and Maersk called for a faster pace in maritime decarbonisation, along with the governments of France and Denmark.
The declaration could set the tone for the industry’s COP28 attendance, as it aims for the highest ambition level of IMO’s revised strategy and calls for shipping companies to set a deadline for ordering conventional fuel vessels.
France continues to lead the lobbying effort for a global shipping GHG levy, as the IMO will begin its comprehensive impact assessment of potential GHG pricing mechanisms, such as a flat rate levy and a fund and rebate scheme among other proposals.
The UN body committed to adopt one of these mechanisms along with a global fuel standard in 2025.
A deal was agreed by national governments during the first day of COP28 on the ‘loss and damage fund’ to raise around $430m for mitigating the adverse effects of climate change on the world’s poorest and most vulnerable countries.
The deal could have an indirect impact on upcoming IMO decisions for GHG pricing, as the small and island developing countries were calling on the UN body to take smaller economies into account when making important decisions that will have a larger impact on such countries.
The Marshall Islands and the Solomon Islands had proposed a flat rate shipping GHG levy of $100 per tonne in a formal submission to the IMO.
The Global Maritime Forum reported 23 new green corridor projects in the past 12 months at the second anniversary of the Clydebank Declaration that was announced during COP26. The GMF said several green corridor initiatives made progress in 2023, including six that now aim for a scaled deployment before 2030.
The forum called on national governments to commit funding support to green corridor projects before IMO’s GHG pricing mechanism kicks in towards the end of this decade, to help bridge the price gap between conventional bunkers and alternative fuels.
COP28 could prove crucial for governments that want to commit tangible financial support to green corridors. Some countries and companies might be waiting for 6 December for shipping related announcements, as it is the transport day at COP28.
The pledge by 118 countries to triple renewable energy capacity could have a direct impact on shipping, as the industry requires significant volumes of renewable hydrogen-based fuels to decarbonise.
Additional renewable energy capacity is needed to ensure renewable fuel production, as several countries — mostly in the European Union — already require new renewable capacity to power clean hydrogen production.
Stinging remarks
Remarks by COP28 president Sultan Al Jaber appear to be overshadowing other announcements, as ADNOC president said ‘there is no science’ indicating that a phase-out of fossil fuels is needed to limit global warming to 1.5 degrees, according to the Guardian. Al Jaber later said his remarks were misrepresented.
COP28 will be crucial to shape the global discussion around GHG pricing and the fair and equitable energy transition, as developing nations are more and more vocal in calling on bigger economies to avoid adverse effects on smaller nations’ economies when considering measures to decarbonise such as carbon pricing.
Cutting methane emissions is on top of COP28’s agenda, as 50 oil and gas companies pledged to reach near-zero methane emissions by 2030. Shipping’s use of LNG as a fuel will likely come under increased scrutiny in the coming years because of its high methane emissions.
Some companies including Fortescue Metals and DP World made important shipping related announcements during COP28.
Metals giant Fortescue is showcasing the 3,100 dwt supply vessel called FFI Green Pioneer (IMO: 9418743) that was retrofitted with a dual-fuel ammonia engine at COP28, as the ship sailed to Dubai. Fortescue aims to conduct the world’s first ammonia transfer with FFI Green Pioneer in Singapore after completing commissioning.
Dubai-based port operator DP World was among the local participants at COP28 to commit to more ambitious climate targets, as the company joined the First Movers Coalition by setting a 5% zero-emission fuel target by 2030 for its short-sea shipping fleet.
DP World committed to set a climate target to be validated by the Science Based Targets Initiative by February 2024.
