The targets for emissions reduction on land are regulated through the Paris Agreement. However, since no country “owns” international shipping emissions, the cuts in shipping are regulated through the United Nations International Maritime Organization (IMO).
The IMO is aiming to halve CO2 emissions from shipping by 2050, compared to 2008. In practice, this means reducing emissions per ship by 70-90 per cent, depending on the growth of the world fleet by 2050.
To achieve such an ambitious goal, effective measures that develop, scale and distribute alternative climate-neutral energy solutions must be quickly established. There is an urgent need for good alternatives for the longest voyages, which also have the highest emissions.
We have only one decade left to develop and scale climate-neutral and profitable solutions.
The Norwegian-controlled foreign-going fleet has established very high ambitions, with the goal of being climate neutral by 2050. Since ships have a long lifespan, shipping companies must only order ships with zero-emission technology from 2030 onwards.
This means we have only one decade left to develop and scale climate-neutral and profitable solutions. To achieve this, framework conditions are needed that stimulate investment in new and climate-friendly technology.
The EU and the IMO are both working on separate climate measures. The EU wants to incorporate shipping into the European quota trading system, and from 2023 the IMO will introduce a combination of technical and operational requirements. The ambitions to implement measures that stimulate lower emissions are commendable, but the proposals also have their weaknesses.
Norwegian shipping climate neutral by 2050
In order to accelerate shipping’s emission reduction, the Norwegian Shipowners’ Association believes that international shipping must act quickly in unison to promote an efficient market mechanism that makes it profitable to develop new solutions, invest in unfamiliar technology and equalize the price between alternative fuels and current fuels, making it commercially feasible to employ climate-neutral alternatives.
Such a measure can be financed by the industry itself. The model can be one price for fuel for anyone bunkering fossil fuels, no matter where in the world. Simply a “price at the pump” as we know it from motoring.
The money must go back to the industry through grants to cover the additional costs of investing in new, unfamiliar and expensive emission reduction technology. The funds can also be used to establish price equalization mechanisms to ensure that the price of an alternative climate-neutral energy solution is not higher than ordinary fossil fuel.
It is impossible to achieve ambitious climate goals without the will to think in new and untraditional ways.
Many will argue that this is difficult or impossible to achieve, because tax policies are the domain of each individual country’s finance authorities.
But it is impossible to achieve ambitious climate goals without the will to think in new and untraditional ways about the instruments we know work quickly and effectively – also at an international level.