The 8th edition of the Economist Group’s World Ocean Summit took place March 1 – 5, 2021 and hosted representatives of the major firms leading the international shipping industry. The voices of companies from different parts of the supply chain, including vessel owners, charterers, investors, shipbrokers, etc., dominated the shipping panels of the virtual event. Their message was clear: the industry is committed to eliminating carbon emissions from the sector in the upcoming decades, but the task will be challenging.

The industry has already started trying to reduce its emissions with actions that aim to decrease the intensity of the operations, including increasing the number of containers per ship, lowering vessels’ speed or growing their size. But these measures are limited. After a certain point, these changes will start to have diminishing returns as ships approach the point of inefficiency. Ultimately, only a transition to a zero-carbon fuel will enable the shipping industry to truly decarbonize, which is needed to constrain global temperatures to less than a 1.5°C increase. As this transition must happen by around 2035, crucial decisions need to be made now.

There is no doubt that the technology for this transition is available. Despite the fact that alternatives to current fuels are at different stages of development, the panelists at the World Ocean Summit agreed on the potential to implement fuel alternatives, given efforts to scale access, ensure affordability and meet the industry’s potential demand. Among the most mentioned fuel alternatives were hydrogen, ammonia, methanol, biofuels and Liquid Natural Gas (LNG), each one encompassing different challenges and environmental implications. The decision of which one to scale must consider their entire life cycle and greenhouse gas (GHG) emissions, as this approach reveals that some of these options can be even worse than current fossil fuels. For instance, LNG is strongly supported by some companies because they are able to use it with minimal additional investment and because it emits 30% less CO₂ than fuel oil when burned. However, methane—a GHG with 28 times greater warming potential than carbon dioxide—is released during its production and use, which can outweigh any other climate savings from the fuel.

The international nature of the shipping sector adds to the complexity of the task. Although these companies are investing in their fleets to reduce their emissions, the lack of strong international regulations means they can be out-competed by firms that keep operating in the traditional way. The panelists observed that the International Maritime Organization (IMO, the UN entity in charge of regulating the shipping sector globally) has had success regulating other pollutants like sulfur in the past, but is now demonstrating a concerning low level of ambition regarding decarbonization. In the upcoming months, the IMO will play a crucial role in setting the ground rules that will decide the future of shipping emissions.

Other voices in the shipping panels contributed their perspectives on moving towards decarbonization. Representatives of the European Union urged developed countries to lead by example, and wholesale companies, such as IKEA, which rely heavily on the shipping industry, emphasized the need for collaboration throughout the supply chain.

But the missing voices in the room were those from developing countries and Small Island Developing States (SIDS), which will be strongly affected, not only by the impacts of climate change but also by the upcoming decisions that will take place at the IMO. No shipping panels featured representatives from these nations, which meant the economic and environmental impacts on these vulnerable places were not properly addressed. Greater participation from these countries in the IMO and events such as the World Ocean Summit will mean more equitable decision-making for the global shipping sector.

The real challenge is not only decarbonizing the sector but doing it quickly enough to help meet climate targets. The world is running out of time and drastic actions must be taken, which will only occur if all parties are on board. Thus, we urge the IMO to set a strong framework to push the sector forward towards a timely decarbonization pathway.