11 research outputs found
Scottish ferries : sailing towards greater energy efficiency and decarbonisation?
The Paris Agreement, UK and Scotland Climate Change Acts provide a clear direction of travel for greenhouse gas (GHG) emissions. Scotlandâs climate targets would require that the domestic transport sector be nearly completely decarbonised. Existing analysis shows that there are inefficiencies in the procurement of ferries, both in Scotland and the rest of Europe, which mean that energy efficiency and decarbonisation opportunities may be forgone in certain situations. The age of ferries has a direct impact on their efficiency and the analysis shows that, whilst Scottish ferries are younger than their counterparts elsewhere, when disaggregating by operator, there seems to be some correlation between public and private operators with regards to age of the ferries. Implementation of incremental energy efficiency technologies and measures in ferries may be hindered due to market failures, and total decarbonisation may be hindered by non-market failures
An exploration of climate alignment in freight related investment decisions
Meeting the Paris Agreement temperature goals requires large redirection of capital flows from carbon intensive to low carbon technologies. For the transport sector alone, the IEA (2017) finds that full decarbonization requires cumulative 1.2-1.6 trillion. Financial institutions are therefore key actors in enabling the transition to a low-carbon economy and the numerous collaborative initiatives and commitments such as the Net-Zero Asset Owner Alliance or the Poseidon Principles have emerged highlighting the willingness of financial actors to support this transition.
Ensuring that investments are climate-aligned, i.e. that they are consistent with a downward trajectory to a decarbonization target, requires the development and wide adoption of rigorous climate-alignment methodologies and tools. However, there is no agreed decarbonization pathway and methodology in the freight transportation that allows investors to evaluate climate risk of their portfolios in a rigorous and comparable manner. These are particularly relevant for the freight transportation sector as assets long lifespans often exceed 20 years and current investments therefore create a carbon lock-in for the next crucial decades.
Focusing on three types of freight transportation â road, rail and shipping, the objective of this paper is to provide novel insights in three key areas. First, it intends to give an overview of the existing climate alignment tools and identify the ones used by financiers of the freight transportation assets to screen their investments. Second, it seeks to understand the barriers to the adoption these tools, and the challenges to making portfolios climate aligned. Finally, it will provide recommendations on a way forward for climate alignment on freight transport. This research uses a mixed methods approach to validate findings, combining a literature review, semi-structured interviews with financial institutions and a deliberative workshop
Exploring methods for understanding stranded value: case study on LNG-capable ships
To address these high-level questions, this paper undertakes a case study on the risks associated with a particular candidate technology/fuel for shipping: LNG (Liquefied Natural Gas). LNGâs application as a marine fuel is a relevant candidate for use in a case study because it is associated with new investment today, which is widely recognised to be incompatible with the long-run movement away from use of fossil fuels. However, it has been portrayed as a transition fuel on the pathway for shippingâs decarbonisation. In recent years, increasing numbers of ships have been built to be LNG-capable (e.g. with dual fuel LNG/LSHFO machinery and storage and supply equipment for LNG), and many more are on order. However, there is growing scientific evidence that shows the climate benefits are limited, if not negative, compared to LSHFO (Low Sulphur Heavy Fuel Oil), when considering a full lifecycle analysis of emissions and accounting for all greenhouse gases (GHG) emissions. Furthermore, there is growing evidence that the least-cost pathway for shipping to meet its required shift away from fossil fuels is to reach a mix of electrification, and use of hydrogen and hydrogen-derived fuels (ammonia, methanol). Under an assumption that liquid bio and synthetic methane with equivalent GHG reductions to ammonia/methanol will be less competitive than ammonia, this creates a risk that the more capital-intensive LNG-capable1 assets will have a more limited economic life and/or higher risk of stranded value than less capital intensive conventionally fuelled (HFO/LSHFO) assets
Closing the Gap
Shipping is a cornerstone of global trade and, as such, the GHG emissions created by shipping are significant and rising, accounting for almost 3% of global anthropogenic emissions (Faber et al. 2020a). Recent projections suggest that by 2050, shipping emissions will increase by between 90-130% of 2008 emissions by 2050 (ibid.). However, in April 2018, the IMO adopted the Initial GHG Strategy which set the ambition to reduce total annual GHG emissions by at least 50% by 2050, while pursuing efforts towards phasing out GHG emissions this century as a matter of urgency, consistent with the Paris Agreement temperature goal. With emissions projected to rise and international targets having been set, the question becomes, how these targets can be met by shipping? //
For international shipping to align with the IMOâs Initial GHG Strategy, zero-emission fuels would need to become the dominant fuel source by the 2040s, gradually phasing out current fossil fuels. However, there exists a significant competitiveness gap between incumbent fossil fuels and alternative zero-emission options. This gap is the result of the existence of market barriers and failures, availability issues, a relative lack of information and regulation on safety, as well as the price difference in the fuels, which in turn is driven by R&D, infrastructure, and investment requirements. Projections suggest that across the 2030s and 2040s, zeroemission fuels will be approximately double the price of conventional fuel at best (Lloydâs Register & UMAS 2020). As a result, there is an urgent need for policy to close the competitiveness gap and ensure shipping meets its decarbonisation commitments. //
There is a range of potential measures to promote decarbonisation in shipping, including economic instruments or MBMs, direct regulatory approaches, information policies, voluntary initiatives, and national and regional action. This report provides an overview of different policy measures to address maritime decarbonisation and to close the competitiveness gap while enabling an equitable transition. Fairness and equity aspects are emphasised by e.g. the Initial IMO GHG Strategy. Therefore, the viability of any IMO climate policy instrument depends to a large extent on how these aspects are considered and operationalised. //
This report explains which policy options could help close the competitiveness gap and enable an equitable transition
Exploring financiers beliefs and behaviours at the outset of low-carbon transitions: a shipping case study
The promise and limits of private standards in reducing greenhouse gas emissions from shipping
Published online: 08 January 2017This article examines private standards that aim to mitigate greenhouse gas (GHG) emissions in shipping. These have emerged against a backdrop of regulatory inertia and the exclusion of international shipping from the Paris Climate Change Agreement. They are a product of complex governance arrangements and they have addressed areas of market failure that have held back fuel efficiency advances that are made possible by technological innovations. These private standards hold considerable promise but suffer to different degrees from certain weaknesses, notably a lack of transparency, a low level of ambition and concerns about data reliability. This article examines these deficiencies together with the reasons for them, and assesses the role that law could play in addressing them. It argues that the conditions may be present for the mitigation of shippingâs GHG emissions to become a site of âhybridâ governance, combining private standards and state/supra-state law in a productive way
Legal and contractual changes to enable operational efficiency
What are the legal implications of operational efficiency, and how can the inefficient artefacts of shipping contracts be phased out while driving uptake of specific clauses that encourage the transparency, cooperation, and benefit sharing that allow for more efficient operation of ships?
This paper explores this question as part of a series that examines the undervalued opportunity presented by operational efficiencies to reduce shipping emissions in the short term and pave the way for long-term decarbonisation solutions. The learnings presented here have emerged from a series of meetings and workshops gathering perspectives from experts across the maritime value chainâshipowners, operators, charterers, ports, and NGOsâas part of the Short Term Actions Taskforce. Other papers in the series provide an overview of the issue, and dive deeper into the identified solutions and enablers: the role of data, and the role of pilots
The Potential and Limits of Environmental Disclosure Regulation: A Global Value Chain Perspective Applied to Tanker Shipping
Exploring how transnational environmental governance and the operation of global value chains (GVCs) intersect is key in explaining the circumstances under which mandatory disclosure can improve the environmental footprint of business operations. We investigate how the governance dynamics of the tanker shipping value chain (a major emitter of greenhouse gases) limits the effectiveness of the European Union (EU) monitoring, reporting, and verification (MRV) regulation, which mandates the disclosure of greenhouse gas emissions for ships calling at EU ports. Although MRV seeks to help shipowners and ship managers save fuel and reduce emissions, it does not address the complexity of power relationsalong the tanker shipping value chain and currently cannot disentangle how different actors influence the design, operational, commercial, and ocean/weather factors that together determine fuel consumption. In particular, the EU MRV neglects to reflect on how oil majors exert their power and impose their commercial priorities on other actors, and thus co-determine fuel use levels. We conclude that, in its current form, the EU MRV is unlikely to lead to significant environmental upgrading in tanker shipping. More generally,we argue that regulators seeking to facilitate environmental upgrading need to expand their focus beyond the unwanted behaviors of producers of goods and providers of services to also address the incentive structures and demands placed on them by global buyers.<br/
Enablers and challenges to operational efficiency pilots
This paper explores this question as part of a series that examines the undervalued opportunity presented by operational efficiencies to reduce shipping emissions in the short term and pave the way for long-term decarbonisation solutions. The learnings presented here have emerged from a series of meetings and workshops gathering perspectives from experts across the maritime value chainâshipowners, operators, charterers, ports, and NGOsâas part of the Short Term Actions Taskforce. Other papers in the series provide an overview of the issue, and dive deeper into the identified solutions and enablers: the role of data, legal and contractual changes