In October 2021, the Mærsk McKinney-Møller Center for Zero Carbon Shipping published its first ever Industry Transition Strategy, which points to a series of feasible transition pathways that can be utilized in the efforts to reach a zero carbon shipping sector by 2050.
Although it is already possible to identify first movers and new initiatives that seek to reduce the carbon footprint of the shipping sector, further efforts are needed in order to decarbonize.
The Mærsk McKinney-Møller Center for Zero Carbon Shipping (the Center) was established in 2020 as an independent stakeholder in the eco-system to help accelerate the transition through collaboration, since it is recognized that no single stakeholder can drive the green transition on its own.
The Industry Transition Strategy (the Strategy), which is the first of its kind developed by the Center, will be followed by similar publications in the coming years to provide recommendations on how to transition towards zero-carbon shipping based on the latest knowledge and research.
Thus, the Strategy provides a snapshot of the confirmed plans and the real measures that are being taken today across the industry. Therefore, the Strategy is not based on hoped-for future initiatives or drastic changes in consumer behaviour, and the views and conclusions of the Strategy will change over time as new regulation is introduced and new technologies mature.
The current pathway
By looking at documented and planned efforts, the Strategy reaches a disheartening conclusion: the current path leads towards growing greenhouse gas (GHG) emissions between 2020 and 2050. A number of factors, hereunder growing world trade and large fuel cost differences, are the drivers behind this development.
The transport sector is currently accountable for 25% of global GHG-emissions, and although shipping has the least emissions intensity in terms of CO2-eq/ton-km for freight transported, the maritime industry’s enormous scale makes it a noticeable contributor (3%) to global emissions. If the emissions stemming from the maritime sector are not reduced, the sector will account for 5-8% of global emissions by 2050, as other sectors will decarbonize at a faster pace.
This development is illustrated below, where it is clear that even with today’s planned efforts, the total GHG-emissions from the maritime sector are expected to grow by 20%, well above the targets in the Paris Agreement:
Near-term feasible solutions
However, there are certain areas that look promising, and the Strategy identifies four areas where success is needed to make the transition towards zero carbon shipping by 2050 happen:
A level playing field with global regulation
One of the main points of the Strategy is the importance of a level playing field aimed at accelerating technological developments and inspiring investor confidence. One of the specific measures highlighted is the introduction of a carefully designed global carbon pricing structure, which will have the potential to create a level playing field for the various stakeholders and nations in the industry, and at the same time provide a financial incentive to decarbonize.
Support to first movers
Furthermore, the Strategy points to the fact that the green transition is uncertain and may be costly. Therefore, the industry is in need of a blueprint, which can help the diverse participants in the industry embark on the green transition. This entails that first movers all the way through the value chain should be supported in terms of risk reductions, enabling investment and allowing innovation of solutions that drive technology costdowns. In order to create the potential for a scalable platform, the establishment of a framework that can encompass system integration, financial incentives and new partnership structures is needed.
Energy efficiency support across the value chain
Another highlighted area in the Strategy is energy efficiency deployment, which is needed to reduce the overall energy demand by the industry. Efforts made towards energy efficiency can maximize primary energy conversion to new energy carriers. To fully exploit the potential that further energy efficiency offers, the Strategy recommends the industry to focus on resolving current challenges preventing wider adoption, tightening of regulation and foster new EE technology innovation.
Competitive alternative fuels for maritime at scale
The Strategy also points to the fact that in order to reach the ambitions of zero-carbon shipping by 2050, alternative fuels are required. The production and supply chains of the alternative fuels need to mature through technology innovation and scaling. Furthermore, standards and regulation, licenses and developments of permits are urgently needed. However, production scaling carries challenges that aren’t guaranteed to be solved by business alone. There is a need for authorities and industry to take action to ensure sufficient renewable energy and alternative fuel production for the maritime industry.
To find out more, please visit the Mærsk McKinney-Møller Center for Zero Carbon Shipping’s website here, or access the Industry Transition Strategy here.
Contact the Royal Danish Embassy in Singapore for more information about business opportunities and how Denmark seeks to inspire green transition in Southeast Asia:
Mark Edward Perry
Head of Trade at the Royal Danish Embassy in Singapore
Phone: +65 9088 5567
Email: markpe@um.dk