The United Nations International Maritime Organization’s (IMO) revised greenhouse gas reduction strategy puts shipping on course to exceed its current share of the world’s 1.5 °C carbon budget by 2032. As the IMO works to develop its enforcement mechanisms, nations and regions face an imperative to develop mandatory policies to align the industry with a 1.5 °C pathway.
International shipping is a significant contributor to global greenhouse gas (GHG) emissions, accounting for 3% of global, human-caused carbon dioxide (CO2) emissions in 2018 and roughly 11% of life-cycle transportation CO2 emissions in 2020.1 Air pollution from the shipping industry is estimated to be responsible for up to 266,000 premature deaths in 2020, accounting for the combined impacts of nitrogen oxides (NOx), sulfur oxides (SOx), and fine particulate matter (PM2.5), despite a 2020 rule that reduces the maximum allowable sulfur content of marine fuels from 3.5% to 0.50%.2 With maritime trade volumes expected to triple by 2050 from 2019 levels,3 aligning the global industry with a 1.5 °C-aligned pathway to zero emissions becomes more challenging—and more pressing—with each passing ship.
IMO Strategy Shortfall Triggers Urgency for Regional and National Action
In July 2023, the IMO adopted a revision to its initial 2018 GHG strategy, calling for international shipping to reach net- zero GHG emissions “by or around” 2050, with “indicative checkpoints” that call for reducing total GHG emissions by 20% by 2030 (striving for 30%) and 70% by 2040 (striving for 80%), both relative to a 2008 baseline (see Figure 1).4
Although the revised strategy sets higher emissions reduction targets than the initial strategy adopted in 2018, it still falls short of aligning the industry with a 1.5 °C pathway (see Figure 2). The International Council on Clean Transportation (ICCT) estimates that international shipping will still exceed its current share of the world’s 1.5 °C carbon budget by approximately 2032.5
While the IMO’s strategy sets aspirational targets, the measures IMO takes to implement the strategy can be mandatory. Regulations agreed under IMO’s International Convention on the Prevention of Pollution from Ships (MARPOL), an international treaty, are legally binding. However, existing IMO climate regulations that limit the carbon intensity of new and existing ships have been insufficient to reverse shipping’s upward trending emissions curve. The IMO is working to revise its existing regulations by 2026 and to develop new measures that can enter into force by 2027, including a GHG fuel standard to limit the life-cycle GHG intensity of the fuels used by ships. If IMO member states can agree to stronger climate regulations, there’s a chance to align shipping with a 1.5 °C-aligned emissions pathway, but the politics of IMO have so far made setting sufficiently ambitious climate policies slow and difficult. While international regulations have the greatest potential for achieving global emissions reductions from the sector, they will take time to develop. In the interim, national and regional shipping climate policies will be critical to progress.
National and Regional GHG Reduction Policies
To correct course for a 1.5 °C-aligned pathway, nations and regions will need to bridge the ambition gap with GHG reduction policies that account for shipping emissions and green fuel standards that gradually reduce the allowable emissions intensity of marine fuels. Of course, the inherently international shipping industry makes it challenging for any single country to unilaterally address the sector’s emissions. By adopting comprehensive policies intended to pair up with other nations’ policies, countries can lead by example and encourage others to follow suit. Coordinated global efforts can help create a level playing field, encourage technological advancements and accelerate the industry’s progress toward achieving zero emissions before the IMO’s “by or around” 2050 target.
As with climate mitigation and adaptation efforts at large, international collaboration on reducing shipping’s emissions is vital. By harmonizing national and regional GHG reduction policies, countries can help ensure that we cover 100% of the emissions from a ship’s domestic or international voyage. The European Union has taken a first-mover step to price shipping emissions by adding maritime emissions from 50% of extra-EU voyages and 100% of intra-EU voyages to the EU Emissions Trading System (ETS).
Beginning in January 2024, the ETS will be extended to cover CO2 emissions from all large ships (of 5,000 gross tonnage and above) calling EU ports, regardless of the flag they fly. The EU ETS currently covers CO2, but will be expanded to cover methane (CH4) and nitrous oxide (N2O) emissions as well, starting in 2026.6 CH4 is emitted by ships that use liquefied natural gas (LNG) as a marine fuel,7 and N2O could be a problem for ships that use ammonia as a fuel in the future. Other countries could adopt similar policies to ensure that 100% of a voyage’s emissions are captured by the combination of two countries’ accounting systems.
The implementation of national and regional GHG reduction policies will help ensure that all players in the shipping industry face similar regulatory requirements—irrespective of where the ships call port throughout their journey. This levels the playing field and will help reduce the practice of “flagging out,” where ships register under countries with lax regulations to avoid burdensome compliance standards.
A uniform approach promotes fair competition and encourages investment in sustainable shipping technologies. This creates a domino effect that can move the entire shipping industry toward a 1.5 °C-compatible timeline.
Green Fuel Standards in Shipping
National and regional policies that incentivize or mandate the use of low-carbon technologies and fuels can also spur innovation in the shipping industry. This leads to the development of greener and more efficient ships, contributing to the sector’s overall decarbonization.
One of the essential elements of the 2023 IMO GHG Strategy is a goal-based GHG fuel standard (GFS) regulating the phased reduction of the GHG intensity of marine fuels. The GFS will be developed in the coming years, with a goal of entering into force by 2027. Green fuel standards like this can be leveraged to impose mandatory reductions on the GHG intensity of fuels used by the shipping industry—ensuring steady progress towards emissions reductions targets. Green fuels, namely green hydrogen-based fuels, have the potential to significantly reduce emissions and support the transition toward a more sustainable shipping sector.
By concentrating efforts to transition ocean-going vessels to cleaner fuels, green fuels standards help create demand for sustainable fuel sources, driving investments in research and development. This, in turn, accelerates the advancement of green fuel technologies, making them more viable and cost-effective over time. This transition will not only reduce the industry’s climate impact, but ensure steady reduction of the industry’s air quality and environmental impact.
Again, we can look to the European Union for model policy here: its FuelEU maritime regulation imposes measures to ensure that the GHG intensity of marine fuels will gradually decrease over time, setting reduction limits of 2% in 2025 to as much as 80% by 2050. The regulation also institutes a shore power mandate beginning in 2030, requiring all passenger ships and container ships to use on-shore power supply for all electricity needs in major EU ports, reducing local air pollution. For ships that cannot comply, revenues generated from penalties will be used for projects in support of the maritime sector’s decarbonization.8
In the United States, California is leading the charge. Although California’s Low Carbon Fuel Standard (LCSF) does not yet apply to fuels used in ocean-going vessels,9 California was the first to adopt a shore power mandate for vessels in 2007, with compliance requirements first going into effect in 2014. The California Air Resources Board (CARB)’s Ocean-Going Vessel At Berth Regulation was amended in 2020, expanding the emissions control requirements to more vessels including tanker and roll on-roll off (or “ro-ro”) vessels, and adding new ports and terminals that serve these new vessel types. In October 2023, the U.S. Environmental Protection Agency (EPA) issued authorization for the 2020 At Berth Regulation which, when fully implemented, will deliver a 90% reduction in pollution from vessels at berth and reduce the potential cancer risk for port-adjacent communities by 55%. But with mounting pressure to address the state’s port pollution crisis,11 California faces an imperative to expedite implementation of the 2020 At Berth regulations and develop an ambitious and robust fuel standard for ocean-going vessels.
Conclusion
The IMO has agreed to an ambitious but not 1.5 °C-aligned climate strategy. The regulations IMO develops to imple- ment the strategy have the potential to bend shipping’s emissions curve, but they will take time to develop and begin implementation. In the interim, individual countries and regions can help fill the gap. By implementing national and regional GHG reduction policies to mandate emissions reductions from shipping, and imposing green fuels standards to accelerate the transition, countries will be better positioned to fulfill their climate commitments. Near-term actions that reduce emissions are critical if we are to have any chance of limiting global temperature rise to no more than 1.5 °C above pre-industrial levels.
References
- The International Council on Clean Transportation (ICCT), 2020. Vision 2050: A strategy to decarbonize the global transport sector by mid-century. See https://theicct.org/publication/vision-2050-a-strategy-to-decarbonize-the-global-transport-sector-by-mid-century/.
- Sofiev, M.; Winebrake, J.J.; Johansson, L.; Carr, E.W.; Prank, M.; Soares, J.; Vira, J.; Kouznetsov, R.; Jalkanen, J.P.; Corbett, J.J. Cleaner fuels for ships provide public health benefits with climate tradeoffs; Nature Communications 2018, 9; https://doi.org/10.1038/s41467-017-02774-9.
- International Transport Forum (ITF), 2019. ITF Transport Outlook 2019; OECD Publishing: Paris; https://doi.org/10.1787/transp_outlook-en-2019-en.
- International Maritime Organization, 2023. Revised GHG reduction strategy for global shipping adopted.See https://www.imo.org/en/MediaCentre/PressBriefings/pages/Revised-GHG-reduction-strategy-for-global-shipping-adopted-.aspx.
- Comer, B.; Carvalho, F. IMO’s newly revised GHG strategy: What it means for shipping and the Paris Agreement. ICCT, 2023. See https://theicct.org/marine-imo-updated-ghg-strategy-jul23/.
- The European Parliament. EU Action, Inclusion of maritime emissions in the EU Emissions Trading System (ETS). See https://climate.ec.europa.eu/eu-action/transport-emissions/reducing-emissions-shipping-sector_en.
- Pavlenko, N.; Comer, B.; Zhou, Y.; Clark, N.; Rutherford, D. The climate implications of using LNG as a marine fuel. ICCT, 2020. See https://theicct.org/publication/the-climate-implications-of-using-lng-as-a-marine-fuel/.
- The European Parliament. Regulation of the European Parliament and of the Council on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC (July 13, 2023). See https://data.consilium.europa.eu/doc/document/PE-26-2023-INIT/en/pdf.
- California Air Resources Board. Low Carbon Fuel Standard, LCFS Basics with Notes: Exemptions. See https://ww2.arb.ca.gov/sites/default/files/2020-09/basics-notes.pdf.
- California Air Resources Board. California’s regulation to reduce pollution from ocean-going vessels granted U.S. EPA authorization. October 18, 2023. https://ww2.arb.ca.gov/news/californias-regulation-reduce-pollution-ocean-going-vessels-granted-us-epa-authorization.
- Times Editorial Board. Editorial: Port pollution is a crisis. It’s going to take more than a $20 container fee to fix; The Los Angeles Times, October 26, 2022; https://www.latimes.com/opinion/story/2022-10-26/port-pollution-surge-pandemic.