International Shipping

Whereas the Kyoto Protocol stipulated that developed countries should reduce emissions from international bunkers through the IMO, the Paris Agreement does not mention the IMO. Further, the Paris Agreement provides that countries are to set “economy-wide” reduction targets, which implies that emissions from international bunkers should be included in government climate targets under the Paris Agreement.

In the absence of ambitious action through the IMO, which has made limited progress in reducing GHG emissions since discussions on this topic started in 1997, national action is critical to keeping the Paris Agreement temperature limit of 1.5°C within reach. National governments need take responsibility for emissions from international bunkers, and actively work to bring those to zero.

The CAT has assessed whether and to what extent countries’ NDC submissions cover international shipping emissions. No country has adopted a quantified emissions reduction target for international shipping emissions in their NDC, though Cabo Verde may be heading in this direction. A handful have mentioned working through the IMO to further reductions in the sector, but most are silent on the issue. Download our NDC tracking sheet here for more details: CAT_2021_06_InternationalShipping_NDCTracking

For countries that the CAT analyses, we will also begin to track whether international shipping has been included in their net zero targets. This information will be available on individual country pages in the coming months.

Some countries have begun to address their international shipping emissions.

The United Kingdom includes its share of international shipping emissions in its sixth carbon budget for 2033-2037. The sixth carbon budget will take the UK emissions reduction target to 78% by 2035 below 1990 levels (Government of the UK, 2021; Transport & Environment, 2021). The UK has indicated that it will include international shipping emissions in its 2050 net zero target, but has not formalised this intention by enshrining it in legislation (Government of the UK, 2021). International shipping was not included in its 2020 NDC update. In 2020, the UK ranked eighth in terms of port calls in 2020 worldwide, it has thus the leverage to impose measures for vessels halting through its UK ports (UNCTAD, 2021).

The IMO may be forced to accelerate its pace with the recent release of the ‘Fit for 55’ package under the European Green Deal. Four proposed regulations are tackling either maritime emissions or facilities available at ports to facilitate the use of low or zero-carbon fuels.

In September 2020, the European Parliament voted to include international shipping emissions in the EU emissions trading scheme (EU-ETS) from January 2022 (European Commission, 2019; Reuters, 2020) and in July 2021, the European Commission presented its ‘Fit for 55’ package under the European Green Deal, including plans to achieve the Union’s target of a 55% GHG reduction by 2030 (European Parliament, 2021). The revised EU ETS includes international maritime emissions covering half of both incoming and outgoing voyages, ships at berth and intra-EU voyages. The scheme will not allow any free emissions allowances and thus will impose a real cost on ship owners. However, its full implementation will not take place before 2026 when 100% of emissions will be covered, starting with only 20% in 2023 (European Commission, 2021b). The proposed FuelEU Maritime regulation sets a binding emissions intensity reduction target measured in gCO₂ per MJ of 6% by 2035 and 75% by 2050 below 2020 levels (European Commission, 2021d). The revised directive on fuel taxation newly includes navigation and covers intra-EU navigation, fishing and freight transport incentivising the use of zero or low carbon fuels (European Commission, 2021c). By 2030, if proposed revisions are passed under the Alternative Fuel Infrastructure Directive, ports will need to provide shore-side power outputs to meet 90% of the demand however. Worryingly, the regulation incentivises as well the development of natural gas infrastructure at ports, leaving it to member states to decide on the level of deployment by 2025, being at risks to get stuck with high-cost stranded assets (European Commission, 2021a). In January 2019, the EU launched a Monitoring, Reporting and Verification system (EU MRV system), which requires ships calling at EEA ports to report their CO₂ emissions through the EU MRV. As a result, the IMO implemented a similar measure, the IMO Data Collection System, which is a concrete example of national actions driving implementations within the IMO.

In November 2020, the IMO’s MEPC adopted a resolution encouraging countries to develop national action plans to address shipping emissions. At the time of writing, only three countries (Japan, Norway and the UK) had made submissions.

Some actors within the sector have also taken action and adopted emission reduction targets. For example:

• Maersk, the world’s largest container shipping company, has pledged to achieve net zero emissions from operations in 2050 and to have developed carbon neutral vessels, commercially viable, by 2030 (MAERSK, 2019). The company has also recently called for a carbon price of $150 per tonne of CO₂ (Bloomberg, 2021).
• The Port of Rotterdam, the EU’s largest port and, in 2018, the world’s 11th largest port in terms of container cargo handling, has committed to cut its emissions by 49% in 2030 below 1990 levels and 95% by 2050, including maritime transport from and to the Port of Rotterdam (Port of Rotterdam, 2017; UNCTAD, 2019).