Ordering only ships with zero-emission technology from 2030

The sea way is the most energy-efficient mode of transport of goods and the only realistic way to transport large quantities of goods over long distances. Since ships have a lifespan of more than 20 years, zero-emission ships must be phased in from 2030 in order to achieve a climate-neutral fleet from 2050.

Climate optimism

A total of 88 per cent of shipping companies say that they believe they will be climate neutral by 2050, in line with the Norwegian Shipowners’ Association’s climate strategy.

By comparison, Kantar’s climate barometer for 2020 shows that 61 per cent of Norway’s population believe that we will succeed in reducing greenhouse gas emissions globally.

In Kantar’s survey, respondents point out that “the business community’s lack of interest in investing in climate measures” is the most important reason why research is not to a greater extent the basis for climate policy. By contrast, the Norwegian Shipowners’ Association’s member survey shows that the maritime members of the business community both invest in and desire stricter climate measures.

New fuel solutions for ships

In the member survey, 54 per cent reply that they will consider hydrogen as an energy carrier to achieve emissions targets by 2050, and almost half will also consider electric hybrid solutions and ammonia.

Already today, several are working on groundbreaking projects with hydrogen, ammonia, biogas and electricity. More than six out of ten shipping companies answer that they are willing to pay more for climate-friendly fuel. Among short sea shipping companies, the number is eight out of ten.

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Viking Energy the first ammonia-fuelled offshore vessel

Barriers to development

The authorities can help increase the pace and scope of the fuel revolution. The industry points to high investment costs, lack of technology and availability of alternative fuels as the biggest barriers today.

It took around 20 years from the time the first LNG-powered vessel was in operation until the technology was commercially competitive. We do not have that much time if we are to reach the greenhouse gas emission targets set by the IMO, the EU and various nation states, including Norway.

Significant additional costs are often associated with both operations and investments in major technology changes, especially in the early stages. Uncertainty also exists about which technologies to invest in to realize future fuels for shipping. In this shift, it is crucial to ensure cooperation between shipping companies, cargo owners, service customers and the authorities.

Longer contracts reduce the risk in such investments, access to fuel infrastructure ensures flexibility, and an instrument to help reduce risk in new technology will increase the pace of the shift to low and zero-emission fuels.

Fleet renewal

In the autumn of 2019, the Norwegian Shipowners’ Association, together with The Norwegian Confederation of Trade Unions, The Federation of Norwegian Industries and the Coastal Shipping Companies, presented a package of measures for green fleet renewal. The purpose of the package is to collect a set of instruments that can stimulate the renewal of the short sea shipping fleet with the development and use of new technology.

For example, renewal can take place through contracting newbuildings or upgrading existing ships.

The member survey revealed a great need for fleet renewal. Another concrete measure that can contribute to fleet renewal is the introduction of an application-based fund for recycling ships in layup. In this way, old and expensive tonnage can be removed, contributing to orders to Norwegian shipyards and making room for investments in newbuildings.

A general condition is that newer tonnage must be significantly more climate and environmentally friendly than the tonnage being replaced. New tonnage will also be more efficient, making maritime transport more competitive.

The Norwegian Shipowners’ Association encourages the authorities to:

  • Contribute to the green renewal of the short sea shipping fleet through robustsupport schemes, loan schemes and top-up financing schemes on market terms
  • Ensure that public funding through Enova, the NOx Fund and Innovation Norway stimulates fleet renewal
  • Increase the depreciation rate for ships in short sea shipping to 20 percent, or introduce initial depreciation of, for example, 25 percent
  • Work to establish longer-term loan financing of ships
  • Facilitate new, energy-saving and emission-free technologies through funds for research and development as well as intermediate and top-up financing of specific pilot projects
  • Prioritize technology that can be scaled up and contribute to emission reductions for large ships on long routes
  • Establish strict, clear and technology-neutral environmental requirements for public procurement
  • Facilitate diversity of energy-dense fuels such as hydrogen and ammonia as well as sustainable biofuels
  • Introduce a CO2 compensation scheme for ships using LNG as fuel
  • Introduce a detachable tariff for ships that use shore power and charging
  • Work actively in the EU and in the IMO to safeguard maritime interests in relevant climate processes
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2. Proactive business policies