Shipping's century-old lesson

Green Daily
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Laura Millan's Climate Report

When the diesel-powered MS Selandia set sail on her maiden voyage in February 1912, people were so astonished by the sight of an ocean liner that didn't spew steam they named it the "phantom ship."

With that first trip from Copenhagen to Bangkok, the ship proved a largely untested technology was cheaper, cleaner and more efficient than coal, to the point that it rendered steamships obsolete within a few years.

"There was no international organization or regulation," says Faig Abbasov, director of shipping at Transport & Environment, a Brussels-based nonprofit. "It was just one shipping company that decided to try it because it didn't want to rely on coal and everybody else just followed. The shipping industry has this interesting characteristic — it follows the trend."

History shows the industry, which could be responsible for about 10% of global greenhouse gas emissions by 2050, can change quickly when it wants to. Though it has so far delayed efforts to reduce its environmental footprint, green policy momentum in key jurisdictions and the rise of renewable power could herald another tipping point — if advances in new technologies like hydrogen provide a cheaper and better alternative.  

 

At the moment, more than 50,000 ships hauling 90% of the world's cargo emit as much carbon dioxide as Germany, the world's sixth-largest polluter. The industry doesn't pay taxes on fuel or carbon pollution in many countries and most shipping emissions go uncounted because nations don't take ownership of them. 

The United Nations' International Maritime Organization has also been slow to act. In 2018, it set a target for halving emissions by 2050, with specific rules aimed at cutting emissions 40% by 2030 expected to be approved in talks this week. The draft has been criticized by NGOs as insufficient: "Whatever they're going to implement is not worth the paper it's written on," Abbasov says.  

The European Union, responsible for one fifth of global shipping emissions, is planning to act regardless of the outcome of the talks. The region wants to regulate them as part of a broader push to become climate neutral by 2050. 

"If the EU manages to change the behavior and technology of that one fifth, the rest will just follow," Abbasov says. "If you want to sail to Europe you will have to make your ship compatible with EU legislation."

China is also taking action. It now requires regions to report shipping emissions to the central government, Abbasov says, and President Xi Jinping announced in September that the world's top emitter wants to become carbon neutral by 2060. In the U.S., President-elect Joe Biden pledged to "lock in enforceable international agreements to reduce emissions in global shipping and aviation." 

Meanwhile, private money is flowing into low-carbon technologies — echoing the bold bet Denmark's East Asiatic Company took on the diesel engine in 1912. 

Vestas Wind Systems A/S, the world's top wind turbine maker, has commissioned two low-emissions ships that will be able to on renewable hydrogen when the technology becomes commercially available. Cargill Inc., the world's biggest agricultural commodities trader, wants to attach giant sails to its cargo vessels to cut fuel use and emissions by a third. AirSeas, a spinoff of Airbus, has developed kites that help tow ships, potentially reducing fuel consumption by 20%. 

The overhaul might come down to bigger trends transforming power markets. A third of the cargo miles currently hauled by shippers comes from moving fossil fuels, 70% of which is oil, according to BloombergNEF estimates. The share of power generated from fossil fuels globally is expected to drop to 24% in 2050, from 62% today, BNEF says, a decline that will reshape the shipping business.

At a time when even Big Oil realizes the business model that has dominated the global economy for a century is coming undone, the shipping sector could take some advice from one of its founding fathers. On March 30, 1912, just five weeks after the MS Selandia's first trip, Shell Transport and Trading Company founder Marcus Samuel announced he would never build another steamer.

His words crossed the Atlantic Ocean through the Marconi Transatlantic Wireless Telegraph and made it to the pages of the New York Times: "Sir Marcus said that those who went on building steam engines with the knowledge now afforded were only courting disaster."

Laura Millan writes the Climate Report newsletter about the impact of global warming.

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