Decarbonization in the maritime industry: Factors to create an efficient transition strategy
-
DOIhttp://dx.doi.org/10.21511/ee.15(2).2024.04
-
Article InfoVolume 15 2024, Issue #2, pp. 42-63
- 205 Views
-
56 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The maritime industry faces intense scrutiny to address climate change amidst strict environmental regulations and societal expectations. The paper mainly focuses on understanding and evaluating the key factors driving the transition toward decarbonization in shipping. The study utilized qualitative analysis, focusing on reviewing current environmental targets set by major regulatory bodies, notably the International Maritime Organization (IMO) and the European Union (EU).
The study concludes that a clear strategy for reducing emissions is essential, and a holistic approach must be adopted. Thus, the investigation identified several critical factors that can facilitate the creation of an effective strategy to achieve net zero emissions, comply with regulatory goals, and reduce current emissions. They are decarbonization levels (solutions), ecosystem (value chain), and drivers (enablers), collectively referred to as the decarbonization LED model.
The study emphasizes the importance of stakeholder engagement and policy advocacy to support zero-emission transition. For instance, the paper explores the sector’s decarbonization potential through a value chain perspective (Scope 3): employing the life-cycle approach to assess the complete environmental footprint of ship – “Cradle-to-Grave” frameworks (from raw material extraction, production, and product use, until the end of its life) and “Well-to-Wake” methodology to evaluate greenhouse gas emissions from fuel production to end-use by a ship. Additionally, the paper assesses the potential impacts of environmental regulations in the maritime sector, predicting significant transformations in the industry’s operational, technological, and collaborative practices.
Acknowledgment
This study was partially supported by the SEUS project – Horizon Europe Framework Programme (HORIZON), under grant agreement No 101096224. This article reflects only the authors’ views, and the European Commission is not responsible for any use that may be made of the information it contains.
- Keywords
-
JEL Classification (Paper profile tab)F42, H87, L38, L52, L91, L98
-
References81
-
Tables1
-
Figures11
-
- Figure 1. Action levels to reduce carbon footprint and reach net zero emissions
- Figure 2. Decarbonization pathway
- Figure 3. Key factors for developing companies’ efficient net zero transformation strategy
- Figure 4. IMO Roadmap and Strategy for the reduction of GHG emission from ships
- Figure 5. The context of regulations
- Figure 6. Decarbonization regulatory timeline for EU and IMO overlap
- Figure 7. Interdependent value chains in the maritime ecosystem
- Figure 8. Well-to-Wake accounting of GHG Emissions (LCA methodology)
- Figure 9. The EU “Green compass” towards transparency in sustainable reporting
- Figure 10. The Scopes to reduce carbon footprint and reach net zero emissions
- Figure 11. Cradle-to-Grave accounting of GHG Emissions (LCA methodology)
-
- Table A1. Development of key maritime decarbonization initiatives
-
- Adaman, S. (2022, March 27). The EU Taxonomy: Steering the region’s sustainability journey. EDGE Insights.
- Ahern, W. E. (1915). Method of decarbonizing internal-combustion engines (Patent Serial No. 22,835). United States Patent Office.
- APLANET. (2022, October 18). What is Net Zero and how to achieve it: Strategies to reach net zero emissions.
- Bourboulis, S., Krantz, R., & Mouftier, L. (2022). Alternative fuels: Retrofitting ship engines. Global Maritime Forum.
- Connect4Climate & World Bank Group. (n.d.). 2030 Agenda and Paris Agreement: Best achieved together.
- Curran, S., Onorati, A., & Payri, R. (2024). The future of ship engines: Renewable fuels and enabling technologies for decarbonization. International Journal of Engine Research, 25(1), 85-110.
- Deng, S., & Mi, Z. (2023). A review on carbon emissions of global shipping. Marine Development, 1, Article 4.
- DNV. (2020). Monitoring ship and fleet efficiency performance with an SEEMP. Det Norske Veritas.
- DNV. (2021a). CII – Carbon Intensity Indicator. Det Norske Veritas.
- DNV. (2021b). EEXI – Energy Efficiency Existing Ship Index. Det Norske Veritas.
- DNV. (2023a). EEXI and CII requirements taking effect from 1 January 2023. Det Norske Veritas.
- DNV. (2023b). Maritime forecast to 2050. Det Norske Veritas.
- DNV. (2023c). Transport in Transition. Det Norske Veritas.
- DNV. (2024). MRV – Monitoring, Reporting and Verification (EU and UK). Det Norske Veritas.
- Dong, J., Zeng, J., Yang, Y., & Wang, H. (2022). Marine affairs and policy. Frontiers in Marine Science, 9.
- Elder, A. M., & Klimczak, J. (2024, January 15). The shipping industry’s decarbonisation odyssey. Seatrade Maritime.
- European Commission. (2011). Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system (White Paper).
- European Commission. (2021). Directive (EU) 2018/2001 of the European Parliament and of the Council, Regulation (EU) 2018/1999 of the European Parliament and of the Council and Directive 98/70/EC of the European Parliament and of the Council as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652.
- European Commission. (2023a). 2030 climate targets.
- European Concision. (2023b). Corporate sustainability reporting.
- European Parliament. (2019). What is carbon neutrality and how can it be achieved by 2050?
- Gaspar, H. M., Seppäla, L., Koelman, H., & Agis, J. J. G. (2023). Can European shipyards be smarter? A proposal from the SEUS Project. COMPIT’23 Proceedings. Drübeck, Germany.
- GMF. (2020). Getting to Zero Coalition. Global Maritime Forum.
- GMF. (2021). Call to Action for Shipping Decarbonization. Global Maritime Forum.
- Grzelakowski, A. S., Herdzik, J., & Skiba, S. (2022). Maritime shipping decarbonization: Roadmap to meet zero-emission target in shipping as a link in the global supply chains. Energies, 15, Article 6150.
- Halim, R. A., Smith, T., & Englert, D. P. (2019). Understanding the economic impacts of greenhouse gas mitigation policies on shipping: What is the state of the art of current modeling approaches? (Policy Research working paper No. 8695). Washington, D.C.: World Bank Group.
- ICS. (2020). The global trade association of the world’s national shipowners’ associations. International Chamber of Shipping.
- IEA. (2023). International shipping.
- IMO. (1948). Convention on the International Maritime Organization.
- IMO. (1973). International Convention for the Prevention of Pollution from Ships (MARPOL).
- IMO. (2003). Resolution A.963(23) – IMO Policies and Practices Related to the Reduction of Greenhouse Gas Emissions from Ships (Adopted on 5 December 2003).
- IMO. (2019). Procedure for assessing impacts on States of candidate measures (MEPC.1/Circ.885). London.
- IMO. (2020). Further consideration of concrete proposals to improve the operational energy efficiency of existing ships, with a view to developing draft amendments to chapter 4 of Marpol Annex Vi and Associated Guidelines, as appropriate. London: International Maritime Organization.
- IMO. (2021). 76th session of the Marine Environment Protection Committee (MEPC 76). London: International Maritime Organization.
- IMO. (2022). Report of fuel oil consumption data submitted to the IMO Ship Fuel Oil Consumption Database in GISIS. MEPC 79/6/1 10 September 2022.
- IMO. (2023a). Guidelines on life cycle GHG intensity of marine fuels (LCA Guidelines).
- IMO. (2023b, July 7). Revised GHG reduction strategy for global shipping adopted.
- IPCC. (2021). Sixth Assessment Report. Intergovernmental Panel on Climate Change.
- IPCC. (n.d.). Glossary on GLOBAL WARMING OF 1.5 ºC.
- IRCLASS. (2013a). Implementing Energy Efficiency Design Index (EEDI). Indian Register of Shipping.
- IRCLASS. (2013b). Ship Energy Efficiency Management Plan (SEEMP). Guidance notes for ship owners and ship operators. Indian Register of Shipping.
- IRENA. (2021). A pathway to decarbonise the shipping sector by 2050. International Renewable Energy Agency.
- Jameson, P., Egloff, C., Sanders, U., Krogsgaard, M., Burke, D., Tan, M., Hegnsholt, E., & Nyheim, E. (2021, September 24). Global shipping’s net-zero transformation challenge. Boston Consulting Group.
- Jameson, P., Sanders, U., Egloff, C., Krogsgaard, M., Dewar, A., Schack, L., & Larsen, D.S. (2024, March 13). The real cost of decarbonizing in the shipping industry. Boston Consulting Group.
- Jameson, P., Schack, L., Egloff, C., Sanders, U., Krogsgaard, M., Barnes, W., Mohottala, S., Madsen, A., & Burke, D. (2022, December 13). Customers’ willingness to pay can turn the tide toward decarbonized shipping. Boston Consulting Group.
- Kivalov, S. (2024). Current threats to sustainable shipping – From war risks to climate changes. Lex Portus, 10(2), 15-24.
- Koilo, V., & Grytten, O. H. (2019). Maritime financial instability and supply chain management effects. Problems and Perspectives in Management, 17(4), 62-79.
- Koilo, V. (2021). Developing new business models: Logic of network value or cross-industry approach. Problems and Perspectives in Management, 19(2), 291-307.
- Koilo, V. (2022). Business model for integrated sustainable value creation: A supply chain perspective. Problems and Perspectives in Management, 20(1), 93-107.
- Koilo, V. (2024). Unlocking the sustainable value with digitalization: Views of maritime stakeholders on business opportunities. Problems and Perspectives in Management, 22(1), 401-417.
- Kumar, B. R. (2022). Case 15: Panama Canal Expansion. In Project Finance. Management for Professionals (pp. 177-181). Cham: Springer.
- Latapí, M., Davíðsdóttir, B., Cook, D., Jóhannsdóttir, L., Radoszynski, A. M., & Karlsson, K. (2024). Hydrogen fuel cells in shipping: A policy case study of Denmark, Norway, and Sweden. Marine Policy, 163, Article 106109.
- Levin, K., Fransen, T., Schumer, C., Davis, C., & Boehm S. (2023, March 20). What does “net-zero emissions” mean? 8 common questions, answered. World Resource Institute.
- Lind, M., Lehmacher, W., Kuttan, S., Carson-Jackson, J., Cummins, D., van Gogh, M., & Rydbergh, T. (2023). Effective partnerships to support maritime decarbonization. In M. Lind, W. Lehmacher, & R. Ward (Eds.), Maritime Decarbonization (pp. 157-171). Cham: Springer.
- Lind, M., Lemacher, W., Bentham, J., Kuttan, S., Tikka, K., & Watson, R. T. (2022, December 11). Four steps towards maritime decarbonizing actions: Playbook. Part 5. The Maritime Executive.
- Lynce de Faria, D. (2023). The (new) law of maritime safety: ship, states, conventions and their autonomy (2nd ed.). Portugal: Edições Almedina.
- Maritime Executive. (2021, January 3). Søren Skou Calls for USD 450 per tonne bunker tax to cut shipping’s CO2.
- MARPOL ANNEX VI. (2013). EEDI & SEEMP. MARPOL ANNEX VI.
- OECD. (2018). Decarbonising maritime transport: Pathways to zero-carbon shipping by 2035 (International Transport Forum Policy Papers No. 47). Paris: OECD Publishing.
- Oloruntobi, O., Mokhtar, K., Gohari, A., Asif, S., & Chuah, L.F. (2023). Sustainable transition towards greener and cleaner seaborne shipping industry: Challenges and opportunities. Cleaner Engineering and Technology, 13, Article 100628.
- Ozbiltekin-Pala, M., Kazancoglu, Y., Karamperidis, S., & Ram, M. (2024). Managing the risks against carbon neutralization for green maritime transport. Journal of Cleaner Production, 457, Article 142478.
- Parker, B. (2022, March 28). The new class of CII rating specialist impacting the bottom line. Marine Money.
- Pelić, V., Bukovac, O., Radonja, R., & Degiuli, N. (2023). The impact of slow steaming on fuel consumption and CO2 emissions of a container ship. Journal of Marine Science and Engineering, 11(3), Article 675.
- Persefoni. (2024, April 29). Decarbonization: Definition, examples, and why it’s needed.
- Qiao, M. (2021). New IMO Regulations on EEXI & CII to Cut Carbon Intensity from Existing Ships. eMARINA, 2.
- Reuters. (2023). Red Sea Crisis.
- Rojon, I., Lazarou, N. J., Rehmatulla, N., & Smith, T. (2021). The impacts of carbon pricing on maritime transport costs and their implications for developing economies. Marine Policy, 132, Article 104653.
- SBTi. (2021). The SBTi Net-Zero Manual & Criteria.
- SBTi. (2023). The Corporate Net-Zero Standard.
- Sheng, D., Li, Z. C., Fu, X., & Gillen, D. (2017). Modeling the effects of unilateral and uniform emission regulations under shipping company and port competition. Transportation Research Part E: Logistics and Transportation Review, 101, 99-114.
- Sun, J. W. (2005). The decrease of CO2 emission intensity is decarbonization at national and global levels. Energy Policy, 33(8), 975-978.
- Taskar, B., Sasmal, K., & Yiew, L. J. (2023). A case study for the assessment of fuel savings using speed optimization. Ocean Engineering, 274, Article 113990.
- Tuan, D. D., & Wei, C. (2019). Cradle-to-gate life cycle assessment of ships: A case study of Panamax bulk carrier. Journal of Engineering for the Maritime Environment, 233(2), 670-683.
- UMAS & GtZ. (2021). A strategy for the transition to zero-emission shipping. An analysis of transition pathways, scenarios, and levers for change.
- United Nations (UN). (n.d.). For a livable climate: Net-zero commitments must be backed by credible action.
- United Nations (UN). (2023). Review of Maritime Transport 2023: Towards a green and just transition.
- United Nations Framework Convention on Climate Change (UNFCCC). (n.d.). The Paris Agreement.
- WfW. (2021, February 4). Sustainable finance and shipping. Watson Farley & Williams.
- WRI/WBCSD. (2011). Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
- WRI/WBCSD. (2024). The Greenhouse Gas Protocol. A Corporate Accounting and Reporting Standard.
- Xue, Y., & Lai, K. (2023). Responsible shipping for sustainable development: Adoption and performance value, Transport Policy, 130, 89-99.