What impact will COP26 have on the shipping sector?
Many shipping industry commentators believe the initiatives taken both at COP26 and at the subsequent IMO Marine Environment Protection Committee (MEPC) in London do not go far enough. Whether or not that’s the case, we think that the announcements made and initiatives taken will ultimately significantly affect all stakeholders – large and small – operating across the global maritime sector. Here we look at the reasons why the shipping industry is being forced to look at its current practices and being urged to review them in the context of global warming. We also examine some of the measures the international community signed up to at COP26.
The Shipping Industry And COP26: Why Does It Matter?
At the most basic level the world’s oceans and coastal communities are being placed at great risk by increases on CO2. The International Maritime Organization’s (IMO’s) Fourth Greenhouse Gas Study in 2020 paints a clear picture of the impact the shipping industry is having:
Shipping activity now contributes just under 3% of global green house gas (GHG) emissions
Between 2012 and 2018 CO2 emissions from the shipping industry have increased by 40 million tonnes or by 5.6%
Emissions are projected to increase to between 90 and 130% of what they were in 2008 by 2050
What Happened At COP26?
Key developments that will impact the maritime sector at the climate change conference included:
The Signing by 14 nations of the Declaration on Zero Emission Shipping By 2050. This document recognises, among a series of commitments, that climate change is a global crisis that demands efforts from all parts of the international shipping sector across the global fleet
The ‘phasing down’ of coal and fossil fuels and a commitment to cutting methane emissions. For the shipping industry these pledges are likely to see renewed interest in LNG, LPG, Methanol and other alternative fuel sources. On this note the Clydebank Declaration signed by 20 countries at
‘..the need for the formation of an international coalition between ambitious governments, to act together and demonstrate that maritime decarbonisation is possible, while unlocking new business opportunities and socioeconomic benefits for communities across the globe..’
The signatories of the Declaration support the establishment of green shipping corridors – zero-emission maritime routes between two (or more) ports.
The “Just Transition Maritime Task Force” was also set up during COP26. It aims to support crew and other seafarers and coastal communities during the transition to alternative energy in the maritime sector
What Is the IMO’s Position?
Just a week after COP26 the IMO held its Marine Environment Protection Committee (MEPC) meeting in London. The event was an early opportunity to reaffirm some of the commitments made by members of the IMO at COP26. In the view of some environmentalists however, the MEPC proved to be a disappointment.
Yes, there was recognition of the ‘urgent’ need to strengthen the sector’s sense of ambition in terms of its strategy to cut GHG in half by 2050. But several of the nations with the largest global share of the shipping sector spoke against the 2050 target. These countries included Brazil, China, Russia and Saudi Arabia. Further, a resolution to introduce the goal of zero emissions by 2050 was supported only by a minority of member states. Significantly several EU countries that had actually supported the zero-emission goal at COP26 failed to support this similar resolution at MEPC.
As experienced shipping and maritime lawyers it’s our view that doing nothing is no longer an option for the shipping industry. COP26 presented an opportunity for progress to be made in determining future strategies of the major players in the sector. But the steps taken must be built on. If consensus on a way forward does not emerge from within the industry it’s now clear that governments will act unilaterally to restrict and control shipping, especially if there is a perception that the industry is not acting as it should to control emissions.
Aside from the politics of the issue, there’s also a real financial risk to ship owners and others. It’s entirely possible that investors and financial institutions will desert those businesses not seen as going down the road to zero carbon emissions.
Source: By ParrisWhittaker – Jacy Whittaker and A. Kenra Parris-Whittaker