November 29 2023 – A key milestone was reached in July 2023, when Member States of the International Maritime Organization (IMO), during its 80th Marine Environment Protection Committee (MEPC80) meeting, agreed on a revised greenhouse gas (GHG) strategy. Whereas the IMO’s initial strategy from 2018 set the industry on a path to decarbonise, the revised strategy now lays out a clearer pathway for an accelerated, large-scale shift to zero-emission fuels, which need to account for the majority of the sector’s energy use by 2040. This is a crucial step not only for shipping but for the global community as a whole.

Key takeaways

  1. Transition to zero-emission fuels: The International Maritime Organization’s (IMO) revised greenhouse gas emissions strategy sets critical targets that will require a significant and accelerated shift to zero-emission fuels. The strategy’s target of 70% (striving for 80%) reduction in absolute emissions would likely require the average ship to reduce its greenhouse gas (GHG) intensity by ~90% by 2040, when increased trade volumes are accounted for. More immediately, the strategy aims for 5-10% of the energy used in shipping in 2030 to have zero or near-zero GHG emissions. Both targets point to the need for substantial investments and development in zero-emission technologies within an ambitious timeline.
  2. Industry and policy measures: The adoption of mid-term measures in 2025, including a fuel standard and a GHG pricing mechanism, will be crucial. A combination of measures is essential to create certainty of demand for new fuels, and flexibly incentivise a rapid and equitable transition.
  3. Just and equitable transition: It’s important to ensure that the transition is just and equitable, leaving no one behind. This includes considering the impacts of measures on different countries and regions, as well as developing policy frameworks that address the opportunities and needs of the Global South.
  4. Public-private collaboration and industry action: Pilot projects, operational efficiency improvements, green shipping corridors require collaborations between industry and public authorities as well as researchers in paving the way for shipping’s energy transition.
  5. Fuel choices: Reaching the GHG reduction targets will require a mix of strategies, including improving energy efficiency and making specific fuel choices. Transition solutions now have a short window for commercial viability. The focus needs to be on scalable zero-emission fuels like e-ammonia, e-methanol, and green hydrogen, as these will need to make up the majority of the sector’s fuel use by the late 2030’s.
  6. Global implications and collaboration: The outcomes of the IMO’s strategy will impact the global shipping community. International collaboration, policy adoption, and technology development are crucial elements to meet the set targets.
  7. National and regional policy action: To ensure an energy transition aligned with the goals of the Paris Agreement, the strategy needs to be backed by ambitious national and regional policies, as well as industry initiatives to maximise investments in zero-emission shipping.
  8. Urgency and early action: While the industry has made progress in operational and technical efficiencies, achieving the 2030 and subsequent targets demands further innovation, investment, and collaboration for zero-emission fuels. Early adopters will play a crucial role in leading the way for the broader industry.

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