HONG KONG SHIPOWNERS ASSOCIATION

香港船東會

Press Release

ICS REPORT REVEALS SCALE OF CHALLENGE TO DECARBONISE SHIPPING

11 2020

The ICS has issued a report in the lead up to MEPC75 (16-20th November)  “Catalysing the fourth propulsion revolution” , attached as Annex B, . They have also issued a press release promoting the report, attached as Annex A .  
 

The report is part of ICS’s  campaign to highlight the scale of the challenge of decarbonisation and to reinforce support for the industry led proposal for an R&D Fund. 

 

The focus of the report and communication is to highlight the scale of the challenge, to reiterate the industries commitment to full decarbonisation, in line with the IMO 2050 strategy, and to reiterate the need for urgent research and development which will act as de-risking mechanism for transformation. 

 
The report provides 6 key takeaways in the executive summary:-
 
1. International shipping is key to the global economy, transporting about 90% of global trade volumes, using 4 million barrels of oil a day – 4% of global oil production – equivalent to over a third of the daily production of Saudi Arabia. The value of cargoes shipped by sea is close to $7 trillion annually, more than the entire GDP of the world’s third largest economy, Japan. The sheer size and scale of today’s ships and the daily volume of trade they transport requires a colossal power input. The energy used by a typical container vessel crossing the ocean could provide power for 50,000 homes. 

 

2. Presently, moving such a huge amount of goods results in significant carbon emissions and the shipping industry produces 0.9 gigatonnes – 2% of the global economy’s total CO2 emissions – similar to aviation but less than the 2.4 gigatonnes of the global road transportation sector. While too high, shipping’s carbon emissions are much lower that some other key industries such as the global cement industry that produces more than double the amount of CO2. 

 

3. A fourth propulsion revolution to end the shipping industry’s dependence on fossil fuels will be required but there are multiple hurdles to be overcome before full decarbonisation can be achieved. New fuels will need to be developed along with novel propulsion systems, upgraded vessels and an entirely new global refuelling network. 

 

4. Currently, zero-carbon fuels and technologies do not exist at the size and scale needed to catalyse this revolution. However, there are several promising potential zero-carbon fuels and technologies, including ammonia, hydrogen and electric batteries, but each of these pose specific challenges that require a huge amount of R&D before they can become commercially viable on a global basis. 

 

5. Ammonia and hydrogen are less energy dense compared to oil meaning that ships will consume up to five times as much fuel by volume. If the global fleet all adopted green ammonia fuel, ammonia production would have to rise by 440 million tonnes – more than treble current production – requiring 750 gigawatts of renewable energy. This means that shipping alone would consume 60% of the world’s current renewable energy production of 2,537 gigawatts. The battery challenge is just as great: a typical container vessel would require the power of 10,000 Tesla S85 batteries every single day meaning that it would require 70,000 batteries in order to sail for a week. 

 

6. In order to turn the fourth propulsion revolution into reality, the industry is proposing the creation of a US$5 billion R&D fund paid for by a levy on marine fuels, to be overseen by the industry’s global regulator, the UN International Maritime Organization. 

 
Further information will be provided as it comes available following MEPC75 and whether the industry led R&D fund will be accepted as a low cost risk reduction measure.