Charting the route to sustainable shipping

Research carried out by Dr Ioannis Moutzouris, Onassis Associate Professor of Shipping Finance and Sustainability at the Costas Grammenos Centre for Shipping, Trade and Finance discussed the particular challenges the maritime industry faces in its route to more sustainable shipping.

The research suggests that shipping companies are unlikely to commit completely to decarbonisation unless stronger economic and regulatory incentives are implemented.

The main challenges highlighted in the report include the technological, financial and regulatory barriers it must navigate in order to achieve its goal of net zero emissions by 2050. The shipping industry is responsible for around 2-3% of greenhouse gas emissions, and some ambitious targets have been set, including the International Maritime Organization’s (IMO) which initially sought to reduce emissions by 40% by 2030 but are now aiming for net zero by or around 2050.

There must be a shift from fossil fuels to cleaner technologies and fuels, the whitepaper noted, but these fuels are costly, scarce, and uncertain with regards to long-term viability.

In the short-term period, shipping owners and operators can reduce their carbon footprint through operational changes such as slower sailing speeds; vessel design improvements; transitional fuels like liquid natural gas; and partial reliance on renewable propulsion such as wind assist systems.

Ultimately, a greater reduction in greenhouse gas emissions requires expensive new vessels, which will require financial incentives to be adopted by companies.

The whitepaper took stock of a ‘trilemma’ for shipowners – invest in cheaper polluting vessels, pay more for greener ships, or delay investment altogether.

A general trend of the price shipping companies can charge for transporting freight and new ship orders has fallen sharply, reflecting investor anxiety and putting further pressure on the industry.

Uncertainty over emerging fuels and related technologies and geopolitical unrest has also exacerbated the challenges.

London International Shipping Week saw the UK government announce a £1.85 million investment in funding towards the UK National Clean Maritime Research Hub, designed to speed up decarbonisation in shipping, and it also secured a further £2 million funding for a Liquid Hydrogen Research and Innovation Facility.

Logistics UK’s Senior Policy Manager Alexandra Herdman said: “Decarbonising the maritime sector is one of the most complex challenges in global logistics, and this whitepaper rightly highlights the need for financial and regulatory incentives to accelerate change.

“While shipowners and operators are taking steps to reduce emissions through operational efficiencies and transitional fuels, real progress towards net zero will depend on clear policy direction and coordinated investment in new technologies and infrastructure.

“Logistics UK welcomes the government’s recent funding commitments, but a comprehensive strategy – aligned internationally – will be essential to give businesses the confidence to invest in greener fleets and ensure the UK remains a leader in sustainable shipping.”