Shipowners promise a lot, but emissions are only growing

On the bow of the cruise ship in the port of Amsterdam is a hashtag: #savethesea. The elegant letters on the huge MSC Euribia are meters high. The cruise ship was briefly in Amsterdam at the beginning of June. The new boat costing 900 million euros – with a water theme park and 945-seat theater – made a stopover on her maiden trip from the yard in Saint-Nazaire in France to Copenhagen in Denmark.

With a fleet of 22 ships, MSC Cruises is one of the largest providers of ocean cruises in the world. In addition, the Swiss-Italian MSC is the world number 1 in container transport.

The MSC Euribia is the ‘greenest’ cruise ship of the shipping company, hence #save-thesea. And that is what it would like to tell in Amsterdam. To a group of MEPs, for example, who, at the shipping company’s invitation, are given a tour of the surprisingly clean engine rooms.

“This is our best attempt yet to be carbon neutral by 2030,” Gianni Onorato later said in a room on board. “We show that we don’t just talk about sustainability,” says the Italian CEO of MSC Cruises. “We also show how we invest in it.” MSC has to – otherwise, for example, their ships will be denied access to the Norwegian fjords.

And the entire shipping industry has to. The maritime sector is under increasing pressure from politicians and climate activists to do much more against ship emissions.

Shipping is responsible for 90 percent of global freight transport, but also for 3 percent of global CO2₂emissions. Ships also emit all kinds of other pollution. Sulfur, nitrogen, particulate matter, for example, for which there are strict standards. And unlike container ships and tankers, cruise ships also do this close to the built environment.

Important shipping summit

How shipowners should go green, and how governments want to enforce this, is the focus this week a meeting of the United Nations Maritime Organization. The 175 member states of the International Maritime Organization (IMO) are meeting in London for the eightieth meeting of the Marine Environment Protection Committee (MEPC80). That is the most important shipping summit of the year.

Will the IMO finally agree that it wants to be climate neutral in 2050, in line with ‘Paris’? The organization currently assumes a 50 percent reduction in CO₂ in 2050, compared to 2008. Large container shippers such as MSC, the Danish Maersk and the German Hapag Lloyd have already stated that they want to be climate neutral by 2050. Dutch shipowners, mostly SMEs, also want to be net zero by 2050 at the latest.

The Royal Association of Dutch Shipowners (KVNR) last week called on the IMO to take its responsibility and to agree that the shipping industry wants to keep global warming below 1.5 degrees. In the British journal Lloyd’s List Annet Koster (KVNR) and representatives of several international trade associations argue for ambitious climate action: net zero emissions from international shipping in 2050. Other questions in London are: will there be a global CO₂-levy for seagoing vessels? Will part of it go into a fund for developing countries and poor island states? And can the IMO do more to ensure that cleaner fuels than heavy fuel oil are more readily available worldwide?

Liquid gas (liquefied natural gas, LNG) is such a cleaner fuel. Not the cleanest, but the fuel on which MSC Euribia bases its green claim. According to MSC, LNG reduces CO by 20 percent₂emissions (and much less sulfur and nitrogen emissions).

Leaking methane

Liquefied gas also has disadvantages: it remains a fossil, including emissions. Also notorious is the leakage of methane, a worse greenhouse gas than CO₂. And LNG is expensive (and in demand, after the boycott of Russian gas).

“LNG is also far from being available in every port,” says CEO Onorato. “That does not make sailing on this fuel easy. We have now made agreements with suppliers in Marseille, Kiel and Rotterdam. My belief is that we should not gamble on one technology, but try as many things as possible.”

Onorato is so enthusiastic about all the sustainable improvements on board that he almost claims that for the climate it is better to book a cruise than to stay at home. “We recycle all the waste, reuse the heat from the engines, purify our wastewater until it is cleaner than many people from the tap.” The ship is painted with anti-algae material; this way it glides more smoothly through the water and that costs less fuel. “The cleanest energy is the energy we don’t use.”

Despite all good, green intentions, market leader MSC Cruises turned out to be the most polluting cruise company in Europe last year. That states the European climate organization Transport & Environment. T&E criticizes the choice of cruise operators for LNG (40 percent of their new ships will sail on it). “LNG is better against air pollution but harmful to the climate,” said T&E. Investing in an ‘intermediate solution’ such as liquefied gas stands in the way of more radical innovation, the organization believes. MSC Cruises says in a response that the company is investing heavily in sustainable fuel and is taking steps against methane leakage.

Also the transport economists of ING state that international shipping must do more to reduce the climate impact. Otherwise, emissions will not decrease. The maritime sector emits more than 680 million tons of CO every year₂ out. If it remains with small green steps, maritime emissions will remain around 600 million tonnes in the coming years, according to ING in a report on synthetic marine fuels (May 2023). This is mainly due to the expected growth in global sea freight, with 15 percent in 2030. As long as Western consumers continue to buy more in Asia, shipping will grow.

Better maintenance, less emissions

Now emissions can be reduced without harming global trade. That suggested research agency CE Delft last week. . With technology already available, ship emissions could be reduced by a third to a half by 2030, according to the Dutch researchers. CE Delft not only mentions cleaner fuels, but also measures to operate more efficiently: better maintenance of the engines, more consideration for the conditions at sea.

CE Delft also concludes that the costs for emission reductions are not too bad. Halving emissions in this decade would increase the total cost of shipping by 10 percent. According to the researchers, this is nothing compared to the costs of climate-related damage for industry (and society) if shipping is unable to limit emissions.

How can shipping become cleaner? In the aforementioned report on synthetic fuels, ING outlines three strategies.

First, temper the demand for maritime transport. This could be done by producing more locally (nearshoring) or reuse it. But, says ING, less transport due to less world trade does not seem a realistic option. Second, also mentioned by CE Delft, improve ship efficiency. That may stop the growth of emissions, according to ING, but will not bring the shipping industry to ‘net zero’.

Third, replace fossil marine fuels with bio- and synthetic fuels. That is not easy either, according to ING. “There are few alternatives to the cheap, heavy and nasty diesel fuel used by most ships.”

There is a great demand for biofuels – also in aviation, road transport and chemicals – but the amount of raw materials is limited. This concerns biomass, used fat, vegetable residues.

Will ships then be able to sail climate neutrally on chemically made, synthetic fuels such as methanol, ammonia and hydrogen in the future? Container shipping company Maersk announced an order last week for six ships that can (also) run on methanol.

How sustainable that is depends mainly on the production of the fuels. Is it grey, blue or green? Gray hydrogen is made with natural gas, so it is not climate neutral. In the production of blue hydrogen (using gas), most of the CO₂ captured. That is already more climate-friendly. Green hydrogen or methanol are based on energy from the sun or wind. “The shipping industry will only make things worse if it starts using synthetic fuels that have been produced in an unsustainable way,” said ING.

More bunkering?

All this makes synthetic marine fuel expensive: ‘blue’ 2 to 5 times more expensive than fossil, ‘green’ 4 to 9 times. And transport costs rise even more: the volume of cleaner fuel is greater than traditional fuel. Then you can do two things: install larger tanks or stop more often between say China and Northwest Europe to refuel (bunker). With the first option there is less space on board for the cargo. That costs money. The second option takes time, and therefore money.

But perhaps, say the researchers at ING, synthetic fuel is not (only) too expensive, but fossil fuel is (also) too cheap. The European Commission has come up with something for this: the ‘Fit for 55’ climate plan states that a levy must be paid for ships in proportion to the ‘carbon intensity’ of the fuel on which they sail. The more fossil, the more expensive. The Commission is also including shipping in the European emissions trading system.

Prefer global tax

International shipping prefers global agreements rather than EU measures. They ensure fairer competition. At the climate finance summit in Paris last week, a growing number of countries voted for a CO₂– levy on sea transport. On the one hand to encourage carriers to invest in environmental measures, and on the other hand to support countries affected by climate change.

According to the World Bank A global levy could raise $50 to $60 billion annually. The EU is in favor of a levy, which may be around USD 100 per tonne of fuel. Japan is also in favour, as are many island nations in the Pacific Ocean. The US doubts.

In 2021, then Maersk CEO Søren Skou stated that container shipping must invest billions to become sustainable. But the consequences for consumers are minimal, says Skou: 6 cents on a pair of sneakers from Vietnam.