Global warming and international shipping. The costs of decarbonisation.

 

Currently, the shipping world is focussed on bunkers, and in particular the adaptations required following the introduction of the 0.5% Sulphur Cap on 1 January 2020. However, bunkers are also going to feature high on the list of possible ways of meeting the IMO’s target of reducing reducing carbon emissions from shipping by at least 50% by 2050 over 2008 levels. A new study https://u-mas.co.uk/LinkClick.aspx?fileticket=03IebWyJns8%3d&portalid=0 by UMAS and the Energy Transitions Commission for the Global Maritime Forum for the Getting to Zero Coalition costs the scale of cumulative investment needed between 2030 and 2050 to achieve the IMO target at approximately USD 0.8-1.2 trillion, or on average between USD 40- 60 billion annually for 20 years.

However, if the target is raised to decarbonisation by 2050, the study estimates extra investments would be needed of approximately USD 400 billion over 20 years, making the total investments needed between USD 1.2-1.6 trillion dollars. The estimate is based on ammonia (NH3) as the primary zero carbon replacement fuel  adopted by the shipping industry and although other fuels such as hydrogen and synthetic methanol, may compete with ammonia, their investment costs will not significantly change from those of ammonia.

The biggest share of this extra investment, 87%, will be in the on shore infrastructure and production facilities for low carbon fuels, with hydrogen production making up around half of this, and ammonia synthesis and storage and bunkering the other half. 13% will relate to ships include the machinery and onboard storage required for a ship to run on ammonia both in newbuild ships and, in some cases, for retrofits, and will include investments in improving energy efficiency, estimated to be higher due to the higher fuel costs of ammonia compared to traditional marine fuels.

Published by

Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to five editions and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment. He has also written and taught extensively on commercial law, trusts and environmental law. Simon will be a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he will teach on both the LLM (Carriage of Goods by Sea, Land and Air and Oil and Gas Law) and LLB programmes at Swansea.

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