Background

The process of decarbonisation in shipping, promoting energy efficiency and environmental protection, is currently uppermost in the shipping sector’s agenda. In particular, laws, regulations and technical standards aimed at reducing the impact of greenhouse gases (GHG) emissions from shipping are the new buzzwords in the shipping sector. International maritime transport emissions, which contribute around 3% of total global emissions, have increased with the growth in international trade in shipping between global industrial centres. Indeed, the struggle against future uncontrolled ship emissions through fossil fuels is becoming increasingly urgent.

The International Maritime Organization (IMO) has elaborated technical and operational measures and implemented market-based measures. In 2018 it developed the “Initial IMO Strategy on reduction of GHG emissions from ships” in compliance with the Paris Agreement and the Sustainable Development Goals of the United Nations 2030 Agenda.

One of the main issues in the decarbonisation debate is who will bear the costs of changing existing fleets. The current IMO target of a 50% reduction of greenhouse gas emissions from shipping by 2030, compared with 2008 levels, is estimated to cost between $1trn and $1.4trn. However, the IMO measures are not viewed as sufficiently ambitious. Public pressure is mounting for shipping emissions to hit net zero by 2050, likely increasing costs to between $1.4trn and $1.9trn.

Other steps towards decarbonisation are, however, occurring at the regional level. A prominent example is the European Union (EU), which is tackling shipping emissions through the EU Emissions Trading Scheme, and may impact the debate within the IMO.

It is evident that reducing maritime GHG emissions requires a multi-stakeholder approach, including public actions and persuading companies to reduce their carbon footprint voluntarily, as well as investments. Funding for Research, Development and Demonstration (RD&D) from industry and the public sector is crucial to achieving deep decarbonisation.

Issues for Research:

Which is the current regulatory framework governing the issue of GHG emissions from shipping?

• The IMO is traditionally regarded as the leading international body with competence to regulate GHG emissions from shipping, leading to the amendment of MARPOL Annex VI through the adoption of Chapter 4. Moreover, the relationship between IMO instruments and the 1982 United Nations Convention on the Law of the Sea (UNCLOS) must also be considered, UNCLOS being the primary source of law governing matters of international navigation. Competent authorities need to consider relevant provisions of UNCLOS, such as Part XII on the protection and preservation of the marine environment and Part VII on the high seas, in particular the principles of freedom of navigation and flag State jurisdiction. Moreover, the decarbonisation issue needs to face the “flag of convenience” phenomenon, undermining the effective implementation of a global strategy towards the renewal of current commercial fleets.

Which measures have been excogitated to achieve the decarbonisation of the shipping industry? The research will focus on the following measures aimed at reducing GHG emissions from shipping:

1. Technical measures
2. Operational measures
3. Market-based measures

Which is the impact of current technical measures to decarbonise the shipping sector?

• These measures mainly concern ship size, the ship–port interface, and alternative fuels. The leading ones are the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP), but other measures, such as the Energy Efficiency Existing Ship Index (EEXI), have been developed. However, to reduce GHG emissions from shipping, these measures need to be combined with other tools, particularly the use of alternative fuels and renewable energy sources.

Which sources of energy are considered more suitable for the process of decarbonisation?

• Alternative fuels, such as sustainable biofuels, nuclear, Liquefied Natural Gas (LNG), hydrogen, ammonia and methanol, are under discussion. Other options include the electrification of ships, solar photovoltaics and wind assistance (soft sails, fixed wings, rotors, kites and wind turbines). The research will explore the respective advantages and disadvantages, such as the price of fuel, transportation, storage and safety. The study will also highlight that there is no single source of clean energy replacing current fossil fuels, rather combinations of the sources mentioned above to decarbonise the shipping industry.

Proposed operational measures?

• The Carbon Intensity Index (CII) is one of the most recent operational measures. In addition, lower speeds, waste heat recovery, cold ironing in ports and devices to trap exhaust emissions represent other examples. In particular, the research will emphasise the importance of port infrastructure, including bunkering and distributing fuel facilities. That infrastructure will also facilitate global trade in synthetic fuels and biofuels and incentivise the decarbonisation process. These developments may lead shipowners and ship operators to consider the employment of zero-emission ships.

What is the role of market-based measures (MBM) in achieving the decarbonisation of shipping? Which MBMs are proposed by the IMO?

• MBM is an essential tool for facilitating the process of decarbonisation in terms of economic incentives and policy-regulatory reforms. Emissions trading and carbon levy schemes represent typical market-based measures, providing polluters (in particular, shipowners and ship operators) with an economic incentive to reduce GHG emissions. The research will highlight the different proposals of MBM by States and non-governmental organisations, as well as the current status of their debate. The inclusion of shipping in the European Union Emission Trading Scheme (to achieve the objectives of the EU Green Deal announced by the European Commission in 2019) is also considered.