According to a latest research, at least an investment of 1 trillion dollars in land-based and water-based infrastructure is needed to meet IMO. targets for cuts in carbon emissions by 2050.
To reduce the emission in maritime industry, the International Maritime Organization (IMO) has mapped out a plan of greenhouse gas emission by 2050, a target that will reduce the emission by 50% of the 2008 amount by 2050.
Such a transition would require a significant investment in infrastructure in new fuel production, supply chains and new or modified fleets, according to the GZC (Getting to Zero Coalition). A new study was conducted on behalf of the GZC by UMAS, a maritime advisory service provider that includes University of London and the ETC (Energy Transformation Commission).
Researchers estimated that the cumulative investment needed between 2030 and 2050 would be 1 trillion dollars to 1.4 trillion dollars, or an average of $50 billion to $70 billion annually for 20 years. If the shipping industry is to fully decarbonize by 2050, this would require further investment of some 400 billion dollars over 20 years, bringing the total to 1.4 trillion dollars to 1.9 trilliondollars.
The GZC, formed by the leading companies in the maritime, energy, infrastructure and financial industries, was formally established last year to promote decarbonization in the International shipping industry and promise to put commercial zero-emission deep sea vessels driven by zero-emission fuel into operation by 2030.
"We need to understand the scale of the challenge to address it,” commented Johanna Christensen, Managing Director of the Global Maritime Forum, a partner of the GTC.“Significant infrastructure investment is required for the shipping industry's shift to zero-carbon energy.The investment needed should be considered in the context of global energy investment, which stood at 1.85 trillion dollars in 2018.This shows that the green transformation of the shipping industry is considerable, so it is certainly achievable if the right policy measures are taken.”
“Our analysis suggests that though energy infrastructure and vessels are long-lived capital-intensive assets with slow development progress, we will see a disruptive and rapid change to align to a new zero carbon system, with fossil fuel related assets becoming obsolete or needing significant modification,” said Dr. Tristan Smith of University College London’s (UCL) Energy Institute.
The analysis indicates that the investment is needed in two areas: ship-related investment and land-based investment. Of these, land-based infrastructure and low-carbon fuel production facilities require the largest share of investment, accounting for about 87 percent of the total, including the investment in low-carbon fuel production and investment in land-based storage and refueling infrastructure needed to supply it.
On the other hand, only 13 percent of the investment required is in the vessel itself, including equipment and on-board storage facilities required to operate on low-carbon fuels for new builds or rebuilds. Investments related to ships also include investment in energy efficiency. It is expected that the investment in improving energy efficiency will grow due to the higher cost of low-carbon fuels compared to traditional bunker fuels.
Adair Turner, Chairman of the Energy Transformation Commission, said:" Most of the decarbonization in the shipping industry will be carried out on land. This is a systemic shift that goes beyond the capabilities of the shipping industry itself. We need to integrate upstream and downstream fuel value chains and start the transition of shipping to zero carbon energy. If done well, there would be a market opportunity worth trillions of dollars. "
According to IMO reports, the global carbon emission from ships was 1 billion tons in 2007, accounting for 3.3 % of the total global carbon emission. Due to the soaring global maritime trade volume, if the control measures are not implemented in time, the global carbon emission from ships is expected to increase by 150% to 250% in 2050, accounting for 18% of total global emission. Therefore, IMO and EU have taken a series of measures to control carbon emissions from ships in recent years.
On April 13,2018, IMO adopted an initial strategy on reducing greenhouse gas emissions from ships. The strategy proposes to reduce global shipping carbon emissions by 50 percent by 2050 compared with 2008, in order to push the process of zero carbon target. This is the first time that the global maritime community has set a carbon emission target. The strategy makes an overall arrangement for carbon emission reduction in international shipping industry, including implementation vision, emission reduction intensity, guiding principles, short-term, medium-term and long-term emission reduction measures and implications, while defining the supporting safeguards including capacity-building, technical cooperation and research and development. The short-term emission reduction measures include improving the existing energy efficiency framework, developing energy efficiency technologies, formulating energy efficiency indicators, formulating a national plan for marine emission reduction, optimizing ship speed, reducing port emissions, and developing alternative low-carbon or zero-carbon fuels. The medium-term measures include implementing alternative low-carbon or zero-carbon fuel projects, taking energy efficiency measures, establishing innovative emission reduction mechanisms such as market mechanisms, and strengthening technical cooperation and capacity-building The long-term measures include further developing and using zero-carbon fuels, so as to realize the decarbonization of the marine transportation industry in the second half of the century and encouraging the full implementation of innovative emission reduction mechanisms. IMO also indicated that the organization will finalize the global shipping carbon emissions strategy by 2023, based on the initial strategy.