By Lohitakshaa Mohapatra
Amidst growing environmental concerns, the COP28 held in Dubai has been significant. The summit brought international shipping, as well as maritime transport in general into the limelight, thus pushing the need for decarbonizing shipping.
The International Maritime Organization (IMO) Assembly in its 33rd session adopted new strategic plans for the six-year period from 2024 to 2029. It issued strategic directions, one of which was “Respond to climate change and reduce greenhouse gas emissions from international shipping.”
According to the UNCTAD, the international shipping industry is engaged in approximately 80% of the global merchandise trade. It also states that this sector is responsible for about 3% of the world’s greenhouse gas emissions and has increased by 20% in the period from 2012 to 2023. Such an alarming rate of increase has made it vital for organizations to collaborate and come up with a collective approach to decarbonize.
There are several hindrances to the approach. Uncertainty over finding an alternative to fossil fuels has delayed the necessary investments to be made. Moreover, as analysed by the UNCTAD, “decarbonizing the world’s fleet by 2050 could cost $8 billion to $28 billion annually, with an additional $28 billion to $90 billion needed each year for the carbon-neutral fuel infrastructure.” Such an expensive cost for decarbonizing is beyond the capacity of many of the developing nations and would be detrimental to their economic growth.
For the above reasons, the UNCTAD and the IMO have partnered up to start a project to deal with the problems. The project aims to assess the impact decarbonization on developing nations as well as to remove uncertainty for investors. It has also come up with certain policy recommendations to manage the same. These are:-
- Establish a universal regulatory framework applicable to all ships, regardless of their flag of registration, country of ownership or area of operation, to avoid a two-speed decarbonization process and fragmented solutions and exemptions that distort the level playing field for shipping and trade.
- Implement regulations that help minimize uncertainty, which currently hinders the investment decisions of shipowners, shipyards and ports.
- Encourage investors and financial institutions to substantially boost funds for research and development in clean-fuel shipping technologies and infrastructure.
- Introduce a levy on fuels or carbon price to make alternative fuels more competitive, while generating funds that can help smaller and vulnerable economies to achieve a green and just low-carbon transition.
Subsequent to COP28 and IMO Assembly’s 33rd session, APM Terminals and DP World jointly announced the creation of Zero Emission Port Alliance (ZEPA), with the aim to decarbonize the container handling equipment in ports. ZEPA has conducted research and has found battery electric cargo handling equipment to be an alternative to diesel operated ones.
The imperative to decarbonize international shipping is slowly but certainly gaining momentum with key initiatives like the UNCTAD and IMO project, advocating for a universal regulatory framework for sustainable technologies. Despite challenges, collaborative efforts, such as the formation of the ZEPA show signs of a shift toward greener practices, emphasizing the need for collective action in addressing the environmental impact of the shipping industry.
Centre for Maritime Law 