Going green: A container ship at the Port of Los Angeles. A growing number of shipping customers have shown a willingness to pay for greener shipping. — Reuters
SINGAPORE: More vessels that run on cleaner fuels are being built, as pressure mounts from regulators, shareholders and customers for freight liners to ship cargo more sustainably.
This will invariably lead to higher costs for companies and consumers, but the industry needs to take action, say experts.
At a crucial meeting taking place in London this week, the International Maritime Organisation (IMO) will finalise a draft 2023 strategy on reducing greenhouse gas emissions from ships and examine other measures, including various proposals for a carbon levy.
According to the IMO, the international shipping of goods contributes to around 3% of worldwide greenhouse gas emissions, and could be responsible for a much higher proportion within a few decades if nothing is done.
It has pledged to halve greenhouse gas emissions from ships by 2050, from 2008 levels.
A survey by Singapore-based Global Centre for Maritime Decarbonisation and Boston Consulting Group (BCG) in June found that 70% of 128 shipowners polled now consider achieving net-zero emissions a top priority.
The findings come after maritime classification society DNV said in June that biofuel use in the shipping sector had advanced in 2022 from mostly demonstrations and pilot sailings to close to a million tonnes being commercially bunkered in Singapore and Rotterdam.
Biofuels help the shipping industry transition to greener fuels, as they can be blended with conventional fossil fuels and used to power existing ships without the need for modifications.
A survey of Singapore Shipping Association (SSA) members in late 2022 showed that more than a third were already employing alternative fuels in their operations, while almost half plan to explore the use of them within the next two to five years.
SSA president Caroline Yang said: “There is growing industry interest in switching to cleaner fuels and investing in research and development of the next generation of environmentally friendly ships.”
But decarbonising ocean shipping will take years and involve investing billions of dollars in redesigning fleets, building new infrastructure and securing the supply of green fuels at scale.
So businesses that ship merchandise around the world, as well the consumers buying those products, must be prepared to pay more.
Mick Aw, senior adviser at consultancy Moore Stephens, said: “In the longer term, we have no doubt that the decarbonisation costs of shipping will need to be passed on to end consumers.”
The good news is that any significant or immediate jump in shipping costs would likely be avoided.
“Decarbonisation costs are, in total, very high, but can be spread out from 2023 to 2050,” said Aw, referring to the IMO’s targets.
A spokesman for Maersk, which has set a target of eliminating such emissions by 2040, said the liner is ready to shoulder the extra cost of decarbonising.
It has already invested millions in building 19 methanol-fuelled ships that will be delivered within the next three years. — The Straits Times/ANN
