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Shipping, like aviation, accounts for just under 3 per cent of all global emissions. That's a billion tonnes of greenhouse gases. So why do we hear so little about shipping? Probably because unlike planes, few of us will ever set foot on a container ship. And in the absence of dramatic events like the 2021 blocking of the Suez Canal, it's out of sight and out of mind.
But 90 per cent of goods are moved by sea, the majority on large vessels that run on heavy fuel oil and leftover residue from the crude oil distillation process that is extremely polluting. Surprising then that neither the Kyoto Protocol nor the Paris Climate Accords dealt with shipping. It was left up to the UN's International Maritime Organisation.
In 2018, the IMO's 174 member states, many of whom are heavily reliant on shipping, agreed to cut greenhouse gas emissions by at least 50 per cent by 2050 compared to 2008. This put the IMO on a collision course with organisations that introduce net-zero targets, including the EU.
Since 2018, ships arriving at EU ports have had to account for their fuel consumption and CO2 emissions. Now the EU proposes that ship owners would pay for polluting by buying carbon credits, not only for emissions on journeys between member states, but for 50 per cent of voyages starting or ending at EU ports.
Critics argue this is an opportunistic tax levied by the EU that will not reduce emissions. Supporters say change has to come from somewhere. That somewhere could also be from shipping itself. In 2018, Denmark's A.P. Moller-Maersk, the second largest container shipping line in the world, pledged to go net zero by 2040.
It has also undertaken to have the first carbon-neutral operated vessel on the water by 2023. And recently ordered 12 container ships capable of running on carbon-neutral methanol. The cost of using these new fuels will be passed on to Maersk customers who have made their own commitments to decarbonise their supply chains.
In theory, if consumers choose net-zero products, net-zero supply chains will be delivered. In reality, consumer choice alone will not be enough. The cost of heavy fuel oil must rise to make green fuels competitive, which will inevitably make our goods cost more whether we like it or not.