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Home » Ocean Transportation » Shipping Industry 'Struggling to Keep Up' With Pressure to Cut Emissions
SCB FEATURE

Shipping Industry 'Struggling to Keep Up' With Pressure to Cut Emissions

A view from the front of a cargo ship loaded with containers in the ocean
Photo: SHansche, iStock
August 8, 2024
Nick Bowman, Senior Editor

As the European Union and International Maritime Organization (IMO) have each sought to curb greenhouse gas emissions from shipping, the industry struggles to keep up with tightening regulations.

The IMO currently aims to cut maritime greenhouse gas emissions by at least 40% by 2030, while the EU's goal is for a combined 55% reduction across shipping, aviation and energy sectors. Starting in 2025, the EU will also require shipping companies to surrender their EU allowances — carbon credits that allow companies to emit a certain amount of carbon dioxide (CO2) — covering 40% of their reported emissions. That will increase to 70% in the next year, and then 100% from 2027 onwards. For that to happen, though, the technology and infrastructure need to develop beyond where they currently are. 

"The shipping industry is under a huge pressure to decarbonize, but the industry itself is struggling to keep up," says Antonia Panayides, an attorney and transportation partner with Reed Smith, a law firm that represents clients in aviation, shipping, logistics, manufacturing and environmental services. 

Panayides believes that the shipping industry can eventually get to "a much greener place" when it comes to emissions, but says that it will also take a lot more time, money and commitment from global governments to spin up the necessary resources. She also notes that the industry still doesn't have a long-term green fuel alternative for vessels, beyond liquified natural gas (LNG), which emits less CO2, but is seen as little more than a stopgap since it costs more, requires expensive and specialized low-temperature storage systems, and is prone to leaking methane (a harmful greenhouse gas in its own right). 

Beyond LNG, methanol, ammonia and hydrogen have all shown promise in the long term, although each carry their own pitfalls. According to sustainability nonprofit World Resources Institute, methanol is easier to store at most temperatures, but its also highly flammable, requires substantially larger fuel tanks, and the infrastructure needed to source its ingredients has yet to be scaled up enough to make it widely available. Both ammonia and hydrogen emit little to no CO2 when burned, but carry a high risk of leaking, and require more complex equipment and training to safely store and contain them.

Read More: Which ‘Green’ Fuel Type Will Ship Operators Adopt? Time Will Tell

"All of this is still being tested," Panayides says. "If a ship owner is going to build a vessel now, what fuel should it go for? It remains to be seen."

And while it's feasible to eventually get the necessary infrastructure in place to support a large-scale transition to green fuels, she posits that the shipping industry simply hasn't been able to keep up with the regulations being put in place. In the years to come, Panayides says, global governments need to work with the shipping industry to ramp up capacity for sustainable fuels, develop efficient delivery systems to transport that fuel, and then find ways to create safe storage in areas that are easily accessible.

"I think a lot of people recognize the long term benefits of protecting the environment," she says. "However, the change will take time, and the regulations need to recognize that, and take into account that the industry can only do so much in a short period." 

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