August 25, 2022
The need to decarbonise the global shipping industry
The shipping industry has a significant environmental impact. Ships emit noise, water, and oil pollution – and are also responsible for more than 18% of some air pollutants.
Today, shipping is powered almost entirely by fossil fuels, with the industry accounting for 2-3% of global CO2 emissions, a figure that could rise to 17% by 2050 if left unregulated. However, recent advancements in zero-carbon shipping fuels and zero-emissions technologies means decarbonising the industry by 2050 is now a realistic goal.
To meet the goals of the Paris Climate Agreement and ensure shipping is sustainable, transformative action is needed. For the industry to reach zero emissions by 2050, the sector will need to shift entirely to scalable, zero-emission fuels (SZEF) – likely those based on zero-emission hydrogen. These fuels are not available today, so the transition is expected to follow an “S-Curve”, with a period of development, deployment, and standardisation of fuels, vessels, and business models this decade. This will be followed by a very rapid diffusion phase beginning sometime around 2030.
Achieving around 5% of SZEF use in global deep sea shipping by 2030 will be crucial in order to rapidly expand zero-emission solutions in the following two decades. The most urgent actions the sector must take today are those that will contribute to this goal – and that’s where green shipping corridors come in.
The benefits of green shipping corridors
A green shipping corridor is a shipping route between two or more major port hubs, on which zero-carbon emissions ships and other emissions reduction programmes are deployed, and emissions reductions are measured and enabled through public and private actions and policies.
To set the industry on the path to zero emissions by 2050, the entire zero-emission shipping value chain will have to be demonstrated at scale, in multiple locations globally, over the course of this decade. Pilot programmes and new technology have already been implemented with success. However, scaling these initial efforts into the complex shipping industry will be challenging.
The world's first green shipping corridor
On January 28, 2022, the Port of Los Angeles, Port of Shanghai, and C40 Cities announced a partnership of cities, ports, shipping companies, and a network of cargo owners to create the world’s first green shipping corridor – the Los Angeles – Shanghai Green Shipping Corridor.
Through this partnership, ports and industry leaders will decarbonise goods movement between the largest ports in the United States and China, and develop a replicable, scalable green shipping corridor model for the world to use.
This trans-Pacific trade route is one of the most carbon-intensive shipping corridors in the global economy. It has a high profile given its importance among public-facing consumer goods companies and as the nexus between two global economic powers.
A vital partnership for the global shipping industry
The partnership between Shanghai and Los Angeles intends to achieve its decarbonisation goals by developing a ‘Green Shipping Corridor Implementation Plan’ by the end of 2022. It will include deliverables, milestones, and roles for the partnership. The Los Angeles - Shanghai Green Shipping Corridor is a major step for the industry, because it can be a catalyst for change on a global scale.
Green corridors can act as ‘special economic zones at sea’. They have favourable conditions in terms of fuel production, ship operations, policy and the regulatory environment, investment, and cargo owner demand. These conditions can be used as leverage for accelerated action, to allow policymakers to create an enabling ecosystem with targeted regulatory measures, financial incentives, and safety regulations. Green corridors can help to catalyse accelerated decarbonisation by creating ripple effects that will transform the industry and reduce shipping emissions on other corridors too.
The partnership will develop a framework to track emissions reductions and monitor progress towards achieving the interim and key goals. It will leverage the magnitude of the corridor to advocate for technological advancement, infrastructure development, and fuel availability. The vital initiative will help set the industry on a path to zero emissions by 2050, in this crucial decade for global climate action.
Photos courtesy of the Port of Los Angeles.