International Maritime Organization Reaches Deal to Cut Greenhouse Gas Emissions from Ships
Shipping regulators have concluded on a plan for reducing carbon dioxide emissions for ships. International Maritime Organization (IMO) regulators have agreed that the shipping industry should cut carbon emissions by a minimum of 50% by 2050 as part of the industry’s contribution to the Paris Agreement. There will also be a 40% improvement in ship efficiency by 2030 and a 50% to 70% improvement by 2050. In adopting this plan, the shipping industry will be able to phase out greenhouse gases and set a cap on emissions.
Current estimates show that shipping contributes approximately 3% of global carbon emissions. While the international shipping community has agreed to begin the transition to a low-emissions future, it still needs to address how and when the regulations will actually start being implemented. The IMO will now have to start exploring options such as a carbon tax on fuel to promote more fuel-efficient ships and the use of alternative fuels. The industry will require technological changes to help produce zero carbon fuels and propulsion systems. Vessels will be moving from fossil fuels to a combination of electricity, batteries, renewable fuels derived from hydrogen, and potentially bioenergy.
“If you were building a ship or planning to build a ship in the 2020s it will likely need to be able to switch to non-fossil fuels later in its life, a factor insurers and shipping financiers will need to consider in their business plans through the next decade,” the UCL Energy Institute said.
Joanne Mantis is an admiralty and maritime attorney focused on maritime business disputes and financial transactions.