Shell and Deloitte publish a new report on carbon emission reduction goals

Shell and Deloitte publish a new report on carbon emission reduction goals

Photo: ABS

As the International Maritime Organization (IMO) restarted its committee work with a focus on efficiency measures ensuring progress towards greenhouse gas (GHG) reductions in the sector, a new report published on July 7 by Shell and Deloitte finds that 95% of senior shipping executives see decarbonization as important or a top three priority for the industry.

The report brings together findings from in-depth interviews with more than 80 senior shipping executives from organizations across Europe, North America, and Asia, representing customers, ship owners, operators, charterers, port authorities, regulators, technology providers, financiers, equipment manufacturers and bunker suppliers. It presents an industry view of the barriers to decarbonization the industry faces, and the solutions that would enable it to meet the IMO’s ambition of reducing GHG emissions by at least 50% by 2050.

In Europe, executives felt a stronger social and regulatory incentive, and in Asia executives predominantly felt the incentive was coming from regulation. But in all regions, decarbonization is on the agenda.

Throughout the interviews, participants were asked what they saw as the major barriers to decarbonizing shipping. Three factors emerged as key: a lack of market and customer demand; no technological alignment on what the new fuels would be; and a lack of harmonized regulatory incentives.

“There is a growing view that now is the time to act if the industry is to meet the IMO’s ambition.”

Despite concerns around the deadlock that these barriers can create, with little clarity on where to start and who should lead, there was enormous optimism in what was heard. There is a growing view that now is the time to act if the industry is to meet the IMO’s ambition. Shipping executives noted that to reach it, the first net-zero vessels will need to enter the global fleet by around 2030 – something that has also been recognized through the goals of the Getting to Zero Coalition. This creates a real sense of urgency.

12 solutions were identified with five of those prioritized as the most critical to unlocking progress in the short-term:

Scale-up customer demand: Create scale in demand for low or zero-emission shipping through charterers’ and customers’ commitments that include long-term contracts and green procurement criteria. 

Global regulatory alignment: Create a level playing field globally and reduce uncertainty regarding regulations and timeframes. New IMO guidelines due in 2023 should provide clarity and should be aligned with leading local and regional regulatory bodies (e.g. The EU, China and the US). Short-term regulatory incentives should also be considered.

Cross-sector research and development: Intensify partnerships to develop zero or low-emission fuels through joint research and development (R&D) across shipping, other harder-to-abate sectors and the energy industry. Create a much larger pool of capital and expertise to evolve new technologies and increase the likelihood that production and transportation infrastructure will be available once future fuels are commercially viable.

Scale-up controlled pilot projects: Increase R&D effectiveness by running end-to-end green pilot projects involving customers, charterers, operators, owners and ports on specific routes and vessel types.

Coordinated industry commitments: Increase the reach of existing initiatives – such as the Getting to Zero Coalition, Clean Cargo Working Group and others – by consolidating objectives and strengthening the coordination of various concurrent workstreams.

Developing and scaling any of these solutions will require unprecedented collaboration between a broad and diverse group across shipping. Not only are the traditional ship owners, operators and regulators needed, but in many cases the customers, ports, financiers and others also need to play important roles.

To read full article by Grahaeme Henderson, Vice President, Shell Shipping & Maritime and access the report clic HERE

Shell & Deloitte: Decarbonising shipping roadmap
For a closer look at the image, please click here 


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