The shipping industry plays a pivotal role in global trade, responsible for transporting approximately 80% of all merchandise traded internationally. However, it is also a considerable contributor to carbon emissions, accounting for about 3% of global greenhouse gas emissions. As the sector faces mounting pressure to reduce its environmental impact, it must navigate numerous challenges associated with decarbonisation and the transition to sustainable practices.
The Decarbonisation Challenge
The International Maritime Organization (IMO) has set ambitious targets for the shipping industry, aiming for a 50% reduction in carbon emissions by 2050 compared to 2008 levels, with a long-term vision of complete decarbonisation. Despite these objectives, the path forward remains complex due to several factors:
- Dependence on Fossil Fuels: Currently, liquefied natural gas (LNG) is the most commercially viable alternative fuel, offering a 25% reduction in CO2 emissions compared to traditional marine fuels. However, LNG is still a fossil fuel and poses risks associated with methane leaks, which have a significantly higher global warming potential than CO2.
- Emerging Alternatives: The industry is exploring various alternative fuels, such as hydrogen, ammonia, and methanol. While these options show promise, they are not yet commercially viable at scale and require substantial investment in infrastructure and technology development.
- Investment Requirements: Achieving full decarbonisation could necessitate investments ranging from $1 trillion to $1.9 trillion, requiring collaborative efforts among governments, private sectors, and international organisations to mobilise funding and resources.
