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2021 IN REVIEW | Green Shipping In association with SwissRe
The transition to green shipping starts now If meaningful progress on decarbonising shipping is to be made, then insurers must be prepared to cover the risks that ship owners will face in the green transition, say Patrizia Kern, (above) Head Marine at Swiss Re Corporate Solutions, and Adam Watkins, (left) Chief Underwriter Marine & Head UK Property & Specialty Underwriting at Swiss Re Group The shipping industry is working flat out these days, driven by the surging demand for goods as the global economy rebounds from last year’s pandemic slump. But all those container ships and tankers criss-crossing the oceans are also contributing a rising share of greenhouse-gas emissions. In response, industry leaders in shipping, energy, infrastructure and finance banded together to issue a Call to Action for Shipping Decarbonisation before the COP26 climate conference in Glasgow. Their goal is for the shipping industry to be run entirely on net-zero energy sources by 2050. Major insurers and reinsurers are going further, establishing the Net-Zero Insurance Alliance. This group, co-founded by Swiss Re, will allow the insurance industry to put its underwriting expertise to work in driving the global transition to a low-carbon economy. Swiss Re is spurring shipping decarbonisation from both sides of our business. On the reinsurance side, the group is working with its clients to promote sustainable underwriting and offering assistance to help them align their businesses with net-zero goals. By adopting a partnership approach and The Marine Insurer | January 2022
developing common goals, we can jointly monitor the progress in our journey to net zero. Swiss Re Corporate Solutions is working with its insurance clients so we’re prepared to cover the risks involved in decarbonisation when new fuels and technologies are brought on line. The corporate insurance arm is also promoting safe and sustainable practices in the shipping industry through groups such as the Ship Recycling Transparency Initiative.
NOT BUSINESS AS USUAL The case for cutting CO2 emissions from shipping is clear. The industry currently accounts for nearly 3% of the global total, according to the International Maritime Organization (IMO). The IMO says that by 2050, greenhouse-gas emissions from the industry should be reduced by at least half from 2008 levels. But if business continues as usual, emissions could soar by as much as 130% in the next three decades. The Call to Action for Shipping Decarbonisation ramps up the ambition. By 2030, zero-emission fuels should account for at least 5% of consumption in international shipping, and commercially viable zero-emission vessels should be operating on deep-sea trade routes. Industrial-scale projects should be carried out to demonstrate that zero-emission shipping is viable at scale as well as to push down costs related to the transition and boost demand. While the private sector is leading the way, governments and regulators will also have to take policy action that makes zero-emission shipping and fuel production commercially viable and available to all. This point is made clear in the Call to Action, which was issued by the Getting to Zero Coalition, a partnership between the Global Maritime Forum, the Friends of Ocean Action and the World Economic Forum. Swiss Re is a signatory along with more than 150 companies and organisations.
