Save for later Print Download Share LinkedIn Twitter The International Maritime Organization (IMO) has reduced its carbon intensity reduction target from 22% to 11% by 2026 as member states remain divided over how fast to cut emissions in the global shipping industry. Nevertheless the move adds momentum to an industry seeking alternative shipping fuels, with LNG currently in the vanguard (LNGI May5'21). The carbon intensity target proposed by several Western nations was ultimately halved. The target will be calculated on a per-ton-mile basis and does not govern total carbon dioxide emissions from shipping. As trade volumes increase on the back of economic recovery in the wake of the Covid-19 pandemic, the industry’s total CO2 emissions are expected to rise. Week-long discussions at the IMO -- the UN body that regulates shipping -- focused on measures to reduce the global fleet’s carbon intensity by 40% by 2030 compared with 2008 levels. Alternative Shipping Fuels The shipping industry pumps out about 2.4% of annual CO2 emissions, but is hard to decarbonize because clean fuels such as green hydrogen, ammonia and methanol are not widely available and currently cost more than fossil fuels. LNG-fueled and battery-powered ships remain the easier options for shipping firms to adopt. LNG is currently the most developed alternative to conventional fuel oil, marine gasoil and diesel. LNG-fueled vessels account for only 0.16% of the current world shipping fleet, according to IMO data, but 4.5% of the 2020 order book (LNGI Feb.8'21). More than 25 LNG bunkering vessels will be in operation this year with the geographical footprint of these vessels drastically increasing. Experience in ship-to-ship operations is also rising but standardization needs to be driven across the sector. For now, among alternative fuels, LNG appears to face little real competition from ammonia (0.02%), hydrogen (0.06%), methanol (0.47%) and LPG (0.67%) data from consultancy DNV showed from a recent LNG industry summit (LNGI Mar.10'21; LNGI Apr.21'21). Industry Pushback on LNG Nevertheless, some in the shipping industry remain deeply skeptical over the merits of LNG as an alternative fuel. AP Moller Maersk, the largest shipping giant by fleet capacity, believes the IMO should speed up progress on cutting emissions and has described LNG bunkering as “borderline greenwashing” calling for greater investment in green methanol. Some international institutions such as the World Bank also favor green fuels such as ammonia and hydrogen over LNG as the most promising zero-carbon bunker fuels for shipping. The bank recommends that countries should avoid public policy support for LNG and continue regulating methane emissions to put shipping on track with the Paris-aligned greenhouse gas emissions trajectory. IMO's Carbon Emission Reduction Metrics Others in shipping research question current IMO methodology on cutting emissions. “There is an opportunity for LNG producers in the shipping industry as seen in shipowner order books, but the current methodology leaves out actual fuel consumption and the carbon factor of the fuel,” says Elizabeth Lindstad, chief scientist at Norwegian research institute Sintef Ocean. Lindstad’s research argues that the two most important issues that the IMO faces are the efficiency improvements required in shipping from now until 2030 and the metrics to be used. “The vessels under scope for debate (vessels above 5,000 gross tonnage) consume around 65% of their fuel and not 100%. [This] implies that both the low and the high reduction figures suggested [11% and the 22% reduction compared to today], will most likely fall short of delivering a 40% average reduction in carbon intensity for the entire fleet by 2030,” she says. “My view is that the IMO has ... made some progress and a deal, which will enable the shipping sector to continue to work to fulfill its 2050 target, but it is more difficult to see that the 2030 milestone will be reached.” Tom Pepper, London
