Post by account_disabled on Mar 3, 2024 20:01:06 GMT -8
The world’s shipping heavyweights are not investing in key technologies to reduce their carbon footprint, according to a new report from CDP, an environmental non-profit and investment research provider. The sector is now at risk of not meeting the International Maritime Organization’s (IMO) targets to reduce greenhouse gas emissions by 50% by 2050.
The report, “A Sea Change,” ranks 18 of the largest publicly listed shipping com Betting Number Data panies, representing $62 billion of market capitalization, on business readiness for a low-carbon transition.
According to CDP, shipping accounts for up to 3% of global emissions and 10% of transport emissions — roughly the same as aviation — and is an integral part of the global economy, transporting around 80% of the world’s trade in physical goods. Marine freight is the least emissions intensive way of moving cargo, but freight demand is on the rise, which will require the sector to rapidly reduce its carbon emissions.
Against the backdrop of the IMO’s recent strategy to reduce the industry’s greenhouse gas emissions by half by 2050, there is heightened pressure on shipping companies to take a long-term approach in curbing their carbon footprint. To date Maersk, HMM, and Norden are the most ambitious in setting long-term targets to reduce carbon emissions, consistent with the IMO’s strategy. However, the report finds there is a gap between the cutting-edge carbon neutral technologies available to companies, and the forms of innovation they are developing
CDP’s analysis of marine innovations finds that only three are actively developing technologies that can have a transformative impact on the industry. Companies such as NYK are working towards developing zero-emission vessels for 2050, while Maersk and Norden are actively pioneering the use of “second generation” biofuels produced from waste sources such as cooking oil. Wider innovation trends currently focus on technologies and fuels that only deliver marginal improvements.
Slow steaming — slowing down ships significantly below their maximum speed — is an important short-term solution capable of reducing carbon emissions by up to 30%. Thirteen of the 18 companies were found to have a formal slow steaming policy including K Line, HMM, Euronav, and COSCO, which have established “super slow steaming” policies. Although slow steaming is positive in the short term, it could result in more voyages to meet growing demand, eroding the emission reductions made by slowing down ships.
The research also finds that while container companies that carry consumer goods such as clothing and food are resilient to long-term decarbonization trends, they are facing increasing scrutiny and pressure as their customers look to cut emissions from their supply chain. On the other hand, bulk and tanker companies that transport fossil fuels and other commodities face risks from changes in demand for these products due to wider decarbonization trends.
Other key findings from the report include:
Retrofitting existing fleets could be the most efficient strategy over the short term before more transformative technologies become viable — 14 companies show evidence of retrofitting which includes derating engines and the installation of new propellers.
Low-carbon fuels — including biofuels, hydrogen and ammonia — can deliver significant emission reductions. However, these are underdeveloped with only Norden and Maersk showing evidence of supporting the development of second-generation biofuels.
As a sector faced with low margins and high debt, it’s challenging to secure the required financing to innovate. This requires collaboration with original equipment manufacturers.
Liquified natural gas (LNG) plays a significant role as a transition fuel in the IEA’s below 2°C scenarios, presenting a growth opportunity for ships carrying LNG out to 2040.
The shipping sector has poor rates of disclosure — only five companies in the universe completed CDP’s 2018 climate change questionnaire, and only four are official supporters of Mark Carney’s Task Force on Climate-related Financial Disclosures (TCFD).
Board level oversight of climate issues is very low compared to other sectors. Only three companies have a formal climate committee at the board level.
The report, “A Sea Change,” ranks 18 of the largest publicly listed shipping com Betting Number Data panies, representing $62 billion of market capitalization, on business readiness for a low-carbon transition.
According to CDP, shipping accounts for up to 3% of global emissions and 10% of transport emissions — roughly the same as aviation — and is an integral part of the global economy, transporting around 80% of the world’s trade in physical goods. Marine freight is the least emissions intensive way of moving cargo, but freight demand is on the rise, which will require the sector to rapidly reduce its carbon emissions.
Against the backdrop of the IMO’s recent strategy to reduce the industry’s greenhouse gas emissions by half by 2050, there is heightened pressure on shipping companies to take a long-term approach in curbing their carbon footprint. To date Maersk, HMM, and Norden are the most ambitious in setting long-term targets to reduce carbon emissions, consistent with the IMO’s strategy. However, the report finds there is a gap between the cutting-edge carbon neutral technologies available to companies, and the forms of innovation they are developing
CDP’s analysis of marine innovations finds that only three are actively developing technologies that can have a transformative impact on the industry. Companies such as NYK are working towards developing zero-emission vessels for 2050, while Maersk and Norden are actively pioneering the use of “second generation” biofuels produced from waste sources such as cooking oil. Wider innovation trends currently focus on technologies and fuels that only deliver marginal improvements.
Slow steaming — slowing down ships significantly below their maximum speed — is an important short-term solution capable of reducing carbon emissions by up to 30%. Thirteen of the 18 companies were found to have a formal slow steaming policy including K Line, HMM, Euronav, and COSCO, which have established “super slow steaming” policies. Although slow steaming is positive in the short term, it could result in more voyages to meet growing demand, eroding the emission reductions made by slowing down ships.
The research also finds that while container companies that carry consumer goods such as clothing and food are resilient to long-term decarbonization trends, they are facing increasing scrutiny and pressure as their customers look to cut emissions from their supply chain. On the other hand, bulk and tanker companies that transport fossil fuels and other commodities face risks from changes in demand for these products due to wider decarbonization trends.
Other key findings from the report include:
Retrofitting existing fleets could be the most efficient strategy over the short term before more transformative technologies become viable — 14 companies show evidence of retrofitting which includes derating engines and the installation of new propellers.
Low-carbon fuels — including biofuels, hydrogen and ammonia — can deliver significant emission reductions. However, these are underdeveloped with only Norden and Maersk showing evidence of supporting the development of second-generation biofuels.
As a sector faced with low margins and high debt, it’s challenging to secure the required financing to innovate. This requires collaboration with original equipment manufacturers.
Liquified natural gas (LNG) plays a significant role as a transition fuel in the IEA’s below 2°C scenarios, presenting a growth opportunity for ships carrying LNG out to 2040.
The shipping sector has poor rates of disclosure — only five companies in the universe completed CDP’s 2018 climate change questionnaire, and only four are official supporters of Mark Carney’s Task Force on Climate-related Financial Disclosures (TCFD).
Board level oversight of climate issues is very low compared to other sectors. Only three companies have a formal climate committee at the board level.