7 minute read
Sustainability
Lowering shipping carbon emissions
It’s a long and winding road to decarbonisation, as TREVOR CRIGHTON reports
International Energy Agency research shows that road transport accounts for 15 per cent of total CO2 emissions. That’s as the International Maritime Organisation (IMO) reports sea freight is responsible for 2.5 per cent of global emissions.
This makes decarbonisation – the process of lowering the amount of greenhouse gas (GHG) emissions produced by the burning of fossil fuels – high on the green agenda, with the IMO aiming to reduce shipping carbon emissions by at least 40 per cent by 2030 compared to 2008 levels. By 2050, the aim is less 70 per cent, compared to 2008. As Nikol Hearn, CFA, analyst at Marine
Capital, says the IMO’s current strategy involves multiple steps. “The IMO has adopted mandatory measures to reduce emissions of greenhouse gases from international shipping under International Convention for the Prevention of Pollution from Ships (MARPOL) – the Energy Effi ciency Design Index mandatory for new ships, and the Ship Energy Effi ciency Management Plan,” she says.
“In January 2020, the IMO established a global sulphur cap of 0.5 per cent, forcing the use of low-sulphur fuel or the installation of scrubbers to ‘clean’ higher-sulphur fuels.”
The IMO has also Nikol Hearn established a series of baselines for the amount of fuel each type of ship burns for a certain cargo capacity. “Ships built in the future will have to beat that baseline by a set amount, which will get progressively tougher over time,” says Hearn. “By 2025, all new ships will be 30 per cent more energy effi cient than those built in 2014.” She adds that South Africa has appeared to signal participation in the IMO’s strategies by joining in the
“By 2025, all new ships will be 30 per cent more energy efficient than those built in 2014.” – Nikol Hearn
organisation’s GreenVoyage2050 Project, which seeks to speed up implementation of shipping decarbonisation measures.
Charting a greener course
The Sea Cargo Charter, meanwhile, was developed in 2020 with the goal of reducing shipping’s total annual GHG emissions by at least 50 per cent by 2050.
“The SCC enables consumer pressure on charterers to utilise low carbon emission ships, as signatories will measure the GHG emission intensity and total GHG emissions of their chartering activities on an annual basis, and will assess their climate alignment relative to established decarbonisation trajectories,” says Hearn.
Cost remains a barrier to reducing emissions in the industry, with Hearn citing the lack of initiatives in enacting change as tied to the way shipping experiences split incentives: the perennial problem being the pass-through of cost versus benefi ts.
SHIPPING FACTS
• 90 per cent of the world’s goods are transported via a ship at some stage of their production cycle. Per tonne of cargo moved, it remains by far the most effi cient mode of transport. • The UN estimates the total cost of decarbonising sea freight to be R23.6-trillion by 2050.
Source: ec.europa.eu, smithsonianmag.com
ROAD FREIGHT FACTS
• Road freight produces 16 800 kilotonnes of carbon emissions in South Africa each year, out of a total of 43 000 kilotonnes of annual transport emissions. • Of the total road transport loads in South Africa: - 58 per cent comes from bulk carriers - 13 per cent comprises retail/ FMCG goods - 11 per cent food and beverage products - 8 per cent abnormal loads - 5 per cent fuel carriers Sustainable transport - 3 per cent couriers - 2 per cent refrigeration
Source: ec.europa.eu, smithsonianmag.com
“In certain shipping sectors, the roles of owner, operator or service provider may be carried out by a single entity. In other sectors, such as dry bulk, this is not the case. The owner must make the investment in a new asset, or a fuel-saving technology, but the compensation they receive for making that investment is dependent on overall market conditions, the intended trade and fuel prices.
“A combination of regulatory change, market-based mechanisms, technological developments and broader market forces will all have to play a role, as one or two in isolation will not be suffi cient.”
The road to worthy
In the road freight space, Dr Lee-Anne Terblanche, supply chain project manager at Distell, says that the only current legislation in place to incentivise decarbonisation is the carbon tax, which forms part of the fuel price.
“There’s no direct law in South Africa that seeks to reduce emissions for trucks,” she says. “There are ISO standards and emissions play a role in roadworthiness tests, but there are still plenty of unroadworthy trucks on our roads.”
New Zealand, Australia, the UK and Sweden are currently leading the way in terms of legislation governing emission reduction targets and requirements. “Sweden’s laws say the country needs to be carbon neutral by 2045 and the UK by 2050, and companies are being actively pushed to comply,” says Terblanche. “Carbon neutrality has only been achieved by two small countries so far: Suriname and Bhutan.”
Terblanche’s believes that road freight emissions concerns aren’t particularly high on the agenda in South Africa. “Electricity generation is responsible for by far the most carbon emissions, followed by road freight, so a lot of focus is on reducing GHG emissions from electricity generation, because there are a lot more decarbonisation options in the space.”
The Road Transport Management System (RTMS) is a self-regulation initiative that supports the Department of Transport’s National Overload Control Strategy. Terblanche says that numerous transport companies have signed up for the RTMS, for which they should be commended. “The City of Cape Town implemented the RTMS across its Electricity Fleet Maintenance and Maintenance Services Department’s vehicles and saw numerous improvements, including reducing fuel consumption from 17 to 13 litres per 100km, saving R5.7-million over the period 2008-2016, improving their carbon footprint by 24 per cent and saving R4.2-million on repairs and maintenance,” she says.
Global green lockdowns
The pandemic has shown what’s possible if emissions are reduced – though that was only achieved by global lockdowns, according to Terblanche. “There was a massive decrease in emissions when production slowed and people stopped driving to work; it was a real ‘aha’ moment for industry in terms of the potential,” she says.
“New technology came into play including something as simple as a grocery delivery app like Checkers’ Sixty60, which meant a lower carbon impact by virtue of one courier delivering to 20 doors, taking 20 cars off the road.”
In the sea freight space, Hearn says that the pandemic has highlighted humanity’s interdependence on the natural environment and has raised public pressure on governments to address the targets set at the 2019 United Nations Climate Change Conference to ensure a global temperature rise this century well below 2C°, above pre-industrial levels.
“We see this is in the record number of green bonds issued in 2020 as well as the large number of initial public offerings in the green equity space, particularly on the Oslo Stock Exchange,” she says.
GREENER LOGISTICS
Dr Lee-Anne Terblanche of Distell says that countries like Sweden have introduced electric trucks for road freight and DHL has deployed electric delivery vehicles in New York, but those remain “fi rst world” solutions.
“Bringing that tech to South Africa is challenging in the face of the need for plentiful, reliable charging points – the infrastructure just isn’t available,” she says. “There’s not enough capital gains in buying a long-distance electric truck for transporting goods here yet.”
However, she believes that electric innovations can play a huge role in greening last-mile delivery. “E-bikes and drones can defi nitely play a role in solving part of the e-commerce problem statement, but I still think we’re far from seeing drone deliveries here.”
Marine Capital’s Nikol Hearn says that innovations like electric vehicles and drones will have a minimal impact on shipping, since shipping carries about 90 per cent of the world’s goods, and very much more so internationally rather than domestically.
“The use of cargo bikes in the UK has helped in lowering emissions in the supply chain, but the international shipping of goods is still a more signifi cant element on a mass scale. Going green is critical for the shipping industry as it creates 2.5 per cent of global CO2 emissions.”
