Zero-emission fuel target insufficient to meet IMO 2030 ambition – MMMCZCS

Even the International Maritime Organisation's (IMO) recently revised greenhouse gas (GHG) strategy will fail to reduce emissions substantially this decade, a new report finds.

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In July, the IMO’s Marine Environment Protection Committee (MEPC) adopted a revised GHG strategy with the ambition of achieving net zero emissions “by or around” 2050. The indicative checkpoints call for 20-30% reductions in greenhouse gas (GHG) emissions by 2030, and 70-80% reductions by 2040.

The strategy also aims for 5-10% of the total energy used onboard ships to have zero- or near-zero GHG emissions by 2030.

Moreover, back in 2018, it set a target for vessels to “reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050” compared to 2008 levels. It maintained this target in its revised GHG strategy.

A recent MMMCZCS report forecasts that even if the shipping sector meets both IMO's green fuel uptake and carbon intensity targets, it is estimated to only achieve a 17% reduction in GHG emissions by 2030, from 2008 levels.

ClassNK made a similar assessment earlier this year. If the shipping sector uses only 5-10% of zero- or near-zero emission fuels and technologies by 2030, it will fall short of the IMO's reduction target of 20-30%.

MMMCZCS has calculated that shipping will undershoot the IMO's 20-30% reduction target by 3-13%. And that gap needs to be bridged by radically increasing green marine fuels uptake, MMMCZCS argues.

Some studies have tried to the approximate the amount of alternative fuels required to meet the 2030 goals.

The IMO’s 5% green fuels uptake ambition entails the use of 5.3 million mt/year of green hydrogen, 28.1 million mt/year of e-methanol or 29.8 million mt/year of green ammonia, according to a report by UK-based University Maritime Advisory Services (UMAS) and the two climate coalitions Race to Zero and Getting to Zero.

These fuel types are considered to be zero- or near-zero-emission because they are produced from green hydrogen using renewable electricity, which can enable them to have a near-zero-carbon footprint on a well-to-wake basis.

Going a step further, classification society ClassNK estimated that e-methanol and green ammonia should constitute at least 25% of the total bunker fuel mix to achieve the IMO's 2030 checkpoint. This will be roughly be equivalent to 106 million mt/year of e-methanol or 114 million mt/year of green ammonia by 2030, it said.

Energy efficiency a priority

According to MMMCZCS, it will cost around $200-300 billion by 2030 to produce this scale of alternative fuels that will help shipping meet the 2030 checkpoints. Investing in additional energy efficiency measures onboard ship can help to reduce these costs.

Scaling up energy efficiency measures will require double-digit billion-dollar investments, the report forecasts, but every dollar spent on energy efficiency will save up to four dollars in fuel production costs.

“Investing in energy efficiency on board vessels can substantially reduce the costs of transitioning from conventional vessels to green vessels,” the report said. “If the energy efficiency on board vessels is improved, then each vessel would require less fuel, thereby reducing the demand for alternative fuel, and, in turn, lowering the cost of producing these alternative fuels.”

Policy measures crucial

Moreover, MMMCZCS has recommended that mid-term measures - like GHG pricing or a feebate mechanism, and a GHG fuel standard - must be formulated by 2025 and enforced by 2027, for shipping to meet emission-reduction targets.

“The regulatory process in the IMO is set to implement measures to bring its 2023 GHG strategy into action as soon as 2027. With vessels having a lifespan of about 25 years, this means that vessels which are now beginning to start operations will be a part of the industry transition towards net-zero in 2050,” the report reads.

“The revised strategy is a sign for the entire industry that the business case for all new vessels must account for a future where they will have to be able to run on sustainable fuel. Vessels hitting the water must be either dual-fuel [capable] or capable of being retrofitted [dual-fuel ready] in the near future,” it concluded.

By Konica Bhatt

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