How shipping can go full steam ahead towards net zero

The sun rises over a cargo ship near Cullercoats Bay on North Tyneside. PA

As he sat in a Bloomberg Philanthropies forum at Cop28 last week, the Australian tycoon Andrew “Twiggy” Forrest would have been proud to get a shoutout from the stage.

Mr Forrest was hailed by US climate envoy John Kerry for sailing an ocean-going vessel from Singapore to the summit on ammonia fuel. As a symbol of a breakthrough in the push for net zero, this is a pretty breathtaking feat.

But as one character from Evelyn Waugh’s 1938 novel Scoop might have observed, this was truth “up to a point”. The vessel in question reportedly has four engines, and conventional fuel took it on its way on the high ocean while the ammonia engines were operating during Cop28.

Some good progress then, but also a measure of how much further the shipping industry has yet to travel to make its full contribution to the shift away from fossil fuels. The good news is that insiders seem to think progress is possible.

Admittedly Cop28 is not the forum to ultimately bring the shipping industry into the framework of the UN’s climate change regime. That role belongs to the International Maritime Organisation (IMO), a UN body that this year agreed that the industry, which accounts for about a twentieth of all greenhouse gases, would aim for a mid-century net-neutral position.

For a measure of how this would work, I caught up with Bo Cerup-Simonsen, the chief executive of Maersk McKinney, which is a consultancy advising the maritime industry on net-zero. He says the industry’s prime goal is to offer its clients shipping that is zero-climate impact.

The IMO can drive the change to meet the target. With the lifetime of a ship stretching 25 years, the replacement of vessels is something that can probably only take place at the rate of 5 per cent a year. Add to this the question of where the future fuels are going to come from and how the port infrastructure is built up to support the new ships with alternative fuel requirements.

An old boat in the area where the Aral Sea once was, in Muynak, Uzbekistan, in June. The Aral Sea was once the world's fourth-largest inland body of water. AP

It is vital that the maritime industry is able to balance its own needs and the wider demand for hydrogen supplies

That is why Mr Cerup-Simonsen’s view is that Cop meetings are the place where plenty of consequential new ideas are born for the industry, even as the IMO is the place where the hard regulations are laid down.

Hydrogen is a resource that is much talked about in the future of shipping. Despite reservations about it being a tough fuel to handle, there has never been a dangerous incident in its history. However, it does need new infrastructure.

The Hydrogen Declaration at Cop28 set out a range of ambitions on a gas that could soon tap its long-known potential.

Tomorrow in Antwerp, the launch of the largest hydrogen-powered ship yet will take place. The Hydrotug 1 is the world’s first hydrogen-powered tugboat, an important demonstration that the fuel can be used for powerful engines.

The thing about hydrogen as a fuel is that it will require a new boom in transportation just as liquefied natural gas has done over the past 20 years. That will push up demand for ships and infrastructure too.

It is vital that the maritime industry is able to balance its own needs and the wider demand for these hydrogen supplies. Incidentally, Mr Forrest is at war over the standardisation of the industry, something that could yet complicate the march on the net-zero targets.

The International Renewable Energy Agency, a UN agency mandated to facilitate the adoption and sustainable use of renewable energy, issued a report that projects that hydrogen production would rise five-fold by 2050 to make up more than a tenth of global energy use. Renewable hydrogen will meet the bulk of the projected demand, which would offset a quarter of the transport industry’s emissions.

Hydrogen is prized for the promise of decarbonised electricity. Almost all the current hydrogen stocks have been made by chemical or petrochemical processes. But if solar, carbon capture or nuclear power is used for the “reforming” of the gas (from water), a much smaller carbon footprint is created.

King Willem-Alexander of the Netherlands, left, and North Rhine-Westphalia's State Premier Hendrik Wuest, centre, stand in the engine room of a hydrogen ship in the port of Duisburg, western Germany, last month. AFP

At Glasgow’s Cop26, an agreement was made to back green corridors for shipping. This was a prod that the maritime industry needs to embrace for its development as a player in the sustainable movement.

Despite all this, it is not certain that hydrogen will take first spot. Speaking to the industry bible Lloyd’s List, Carlo Raucci, a decarbonisation consultant at the LR Maritime Decarbonisation Hub, highlighted the still diverse range of options on future fuels and how having options creates a happy headache for shipowners.

He also said investors are fearful of the risk of stranded assets. First movers need initiatives such as green shipping corridors as a means of reducing the uncertainty.

Moreover, the shipping industry is used to pinch points shaping its fortunes.

The Strait of Malacca is China and Japan’s oil corridor, but it narrows at one point to 65 kilometres. The Black Sea barely functions as an artery of the global wheat trade, as it has been hit by the Russian war in Ukraine.

The Houthi attacks in the Gulf of Aden are the worst challenge to the free movement of east-west trade since the Somali pirate attacks petered out in 2011. Already more than a dozen major trading vessels have gone the long route around the Cape of Good Hope since the attacks began.

Transportation of the new fuels is vital to the world’s transition, just as it is with the existing mix.

It is vital that shipping can overcome its own record of using traditional fuels and establish new renewable fuel supplies for both its own vessels and the world economy. Sustainable outcomes for net-zero rest on the prospects of maritime success.