Teppo Säkkinen
Senior Advisor, Climate, Energy and Industries
Finland Chamber of Commerce
Member of the European Economic and Social Committee
Finland
Climate policies impact the future of the maritime sector. Currently, international shipping takes 2 % of global emissions. To keep track with global efforts to reach net zero emissions by 2050, emissions from international shipping should decrease by 15 % by 2030 according to the International Energy Agency IEA.
While the target is somewhat moderate, the scope of the challenge is highlighted by the fact that nearly all shipping is powered by fossil fuels. Multiple technological solutions exist to decarbonize shipping, but few are yet utilized in commercial scale.
The good news is that phasing down fossil fuels in other sectors will also decrease maritime emissions. A big chunk of all maritime transport is actually oil tankers and bulk carriers hauling fossil fuels from production sites to consumption elsewhere. Transport of coal, gas and oil constitutes an astounding 40 % of global shipping tonnage. Therefore, using less fossil fuels on land means also less demand for the transport of fossil fuels by sea.
Maritime climate policies must build on feasible technologies and solutions for decarbonization in the sector. Low carbon fuels will be the most significant tool for maritime decarbonization, as full electrification is still a far-off solution for ships running long streaks at seas. Many bio-based or synthetic fuels are interchangeable with their fossil counterparts and can be used in existing engines with little or no modification. Some emerging fuels, such as green hydrogen or ammonia require specific fuel systems.
Fuels have their drawbacks. To put it bluntly, we cannot expect to replace fossil fuels in all uses with alternative fuels. The production cost, energy demand, low energy efficiency and availability of feedstock place constraints for the availability of zero and low carbon fuels. Policies should therefore encourage electrification in all sectors where it’s feasible and target low-carbon fuels to sectors such as shipping. The sun is setting for the combustion engine in land transport, but at seas it will remain indispensable for long.
Still, electrification does have a role to play in shipping. Plugging ships to shore power can substitute running fuel engines to generate electricity at ports. Electric motors are creeping into smaller boats or as auxiliary engines for bigger ones. More creative solutions are emerging, too. Ships can harness the wind with rotor sails to complement engines, harking back to the age of sails.
Cutting emissions in not only about technology. Good practices building on logistical efficiency and digitalization, such as just in time arrival to ports can both reduce emissions and decrease costs. Instead of crossing oceans on full steam, burning excess fuel on the way only to wait for hours or days to dock, ships can optimize their speed to match available slots at the destination.
Since this January, maritime transport has been part of the emissions trading system of the European Union. The ETS has been a powerful tool in reducing the emissions from energy and industry by putting a price on carbon. The annual decrease of available emissions allowances creates a tight market and forces companies to face higher prices or cut emissions. Additional EU regulation aims to boost the demand and infrastructure for low carbon fuels in maritime sector.
EU policies are evolving with the times. Whereas the Green Deal was the flagship policy of the previous EU Commission, the new mandate will focus above all else on European competitiveness and security. This does not, however, mean a U-turn on climate. Rather, phasing down fossil fuels is seen as improving the energy security of Europe by decreasing foreign dependencies. The new Commission is expected to soon propose an ambitious midway climate target for 2040.
Policies to decarbonize shipping must be anchored in the understanding of the sectors’ vital importance for the society and the economy. For countries around the Baltic sea, up to 90 % of export and import run through sea, year-round also in severe winter conditions. Keeping maritime logistics effective and cost competitive while decarbonizing is therefore vital for our economies, industries and for the security of supply.