Decarbonising global shipping could cost over $1tr
Image credit: reuters
Decarbonising the shipping sector will cost more than $1tr (£770bn) and require a significant investment in land-based infrastructure, a study has found.
The University Maritime Advisory Services (UMAS) said that just 13 per cent of investment needed to allow shipping to reach net zero carbon will actually be spent on the ships themselves; the rest should be put towards low-carbon infrastructure on land, such as infrastructure to enable the use of alternative fuels by ships.
The funds would mostly be spent on machinery and onboard storage required for a ship to run on low carbon fuels in both newbuilds and retrofits, the report found. Ship-related investments would also include energy efficiency improvements, which could surge in popularity due to the higher cost of low-carbon fuels compared to traditional marine fuels.
The global shipping fleet currently accounts for 2.2 per cent of overall CO2 emissions. The sector is under pressure to reduce those emissions, and other forms of pollution. About 90 per cent of world trade is transported by sea. The UN shipping agency, the International Maritime Organization (IMO) aims to reduce the industry’s greenhouse gas emissions by 50 per cent from 2008 levels by 2050: a target that will require the swift development of zero- or low-emission fuels and new ship designs.
Professor Tristan Smith, one of the report’s authors, said: “Energy infrastructure and ships are long-life capital-intensive assets that normally evolve slowly. In the next three decades however, our analysis suggests we will see a disruptive and rapid change to align to a new zero carbon system, with fossil fuel aligned assets becoming obsolete or needing significant modification. Even though regulatory drivers of this system change such as carbon pricing are only starting to be debated, the economic viability of today’s investments and even the returns on recent investments will be challenged, and the sooner this is factored in to strategies and plans, the better.”
In their first study into costs, researchers estimated that the cumulative investment needed between 2030 and 2050 would be between $1tr to $1.4tr, or an average of $50bn to $70bn annually for 20 years.
UMAS said the “risk” was that zero emission ships are deployed without decarbonisation of fuel production which merely shift the emissions upstream.
The publication of the report coincides with an announcement from Prime Minister Boris Johnson that the UK will end its support for thermal coal mining or coal power plants overseas. He said it made no sense for Britain to cut its carbon emissions from power generation at home while supporting coal-fired projects abroad: “Not another penny of UK tax payer’s money will be directly invested in digging up coal or burning it for electricity,” he said. Instead Britain would focus on helping countries extract and use oil and gas in the cleanest way possible and on encouraging investment in solar, wind and hydropower schemes, he said.
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