Shipping accounts for 2 to 3 per cent of the world’s total greenhouse gas emissions

The model boat on display in a cavernous hall near Oslo’s airport is only a few metres long. But for the shipping industry it could be revolutionary. 

The Yara Birkeland — when delivered at full size — will be the world’s first electric and autonomous container ship. The battery-powered vessel, due to start operations in 2020, would eliminate the need for 100 daily truck trips in southern Norway, reducing dust and noise in the local area and eventually cutting running costs for Yara, the fertiliser maker behind its creation. 

“There is a lot of talk about electric ships but to do it is a big difference,” said Bjorn Tore Orvik, the logistics manager at Yara behind the project.

“A way of disrupting one industry is by taking technologies from other industries, putting them together into a new context. I think this will be the new container business on short-sea shipping,” he added. 

If any industry needed disrupting it is shipping. Long known as a foot-dragger on climate change, the container shipping sector transports four-fifths of global trade. Other vast ships transport myriad commodities from oil and coal to grain and cement. But such vessels are some of the dirtiest individual forms of transport in the world and shipping accounts for 2 to 3 per cent of the world’s total greenhouse gas emissions. 

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After a long period of evasion and denial, the industry has sputtered into life. Ola Elvestuen, Norway’s environment minister, called the April announcement by the UN’s shipping regulator that greenhouse gas emissions would be cut in half by 2050 as “the most positive climate news this year”. 

Maersk, the world’s largest container shipping line, topped that this month by telling the Financial Times that its goal was to have zero carbon emissions by 2050. “We will have to abandon fossil fuels,” said Soren Toft, Maersk’s chief operating officer. 

But not everybody in the industry buys into the idea of targets. John Lyras, a member of one of Greece’s most prominent shipowning families, told a conference last year that he was sceptical of the benefits of such targets. “If we really want to reduce CO2 emissions to zero today we can do it in two ways: we can stop trading, or we can go back to sail,” he said provocatively, pointing to his company’s logo of a sail boat. 

At the heart of the debate is what can replace bunker fuel. A generic name for the type of fuels used on ships, bunker tends to be at the cheaper and dirtier end as it comes from the residue of crude oil after other products are extracted. 

The International Maritime Organization has put in place a cap on sulphur levels — which are extremely high in bunker fuel — by 2020 while Mr Toft said that Maersk had cut its CO2 emissions per kilometre travelled by almost half in the past decade. 

Containers sit stacked next to gantry cranes in this aerial photograph taken above the Port of Ningbo-Zhoushan in Ningbo, China, on Wednesday, Oct. 31, 2018. President Donald Trump wants to reach an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms, according to four people familiar with the matter. Photographer: Qilai Shen/Bloomberg
Known as a foot-dragger on climate change, the container shipping sector transports four-fifths of global trade © Bloomberg

But to get to an absolute cut in emissions of 50 per cent by 2050, or Maersk’s zero target, a radical change in ship design will be needed. While solutions like Yara’s Birkeland ship could work for short journeys — Norway already has dozens of electric ferries — they are not suitable for the long distances container and cargo ships have to travel, often several thousand kilometres at a time. 

“The picture of our industry is that we are rich and dirty. But the fact is that we are the most energy-efficient way to transport goods already,” said Harald Solberg, chief executive of the Norwegian Shipowners’ Association, pointing to seaborne freight’s advantages over aircraft or trucks. 

He conceded that as of today “we have no solution for the long trades”. But he added: “It’s very important that we as an industry move ourselves from the back to the front seat of the car and start taking responsibility for this important issue.” 

Several potential solutions are being examined. One is to use hydrogen in fuel cells to power ships — with ABB, the Swiss-Swedish engineering group, one company aiming to commercialise the technology. The world’s first hydrogen-powered ferry, for cars and passengers, is due to enter operation in 2021 on Norway’s west coast. 

“Where we [Norway] really are ahead is in transportation. We are showing that you can have a quicker transition than could be expected,” said Mr Elvestuen. Mr Solberg called fuel cells “perhaps the most promising today”. 

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But he and Mr Toft are clear that there is unlikely to be any “silver bullet” for long-distance shipping where other solutions that have been mooted include biofuels and even nuclear power, as used by submarines and icebreakers. 

“We actually believe that the result will be multiple solutions. The solution we need to get towards is a fuel or propulsion mechanism that has a very high-energy density, which makes it different to cars,” said Mr Toft. 

He expects new innovations and new partners to play a role as well. “It’s important that we don’t think there’s a silver bullet out there that will solve the issue. I don’t want to rule anything out. 

“It’s very easy to say sails for container ships doesn’t make sense because you’re loading and unloading thousands of containers,” he said, adding that the industry had achieved efficiency gains in the past decade that would have been unthinkable at the turn of the century. 

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Although 2050 might appear a long way off, there is a real sense of urgency. The average life of a ship is about 20 years, meaning that the new design of boats needs to be in place by around 2030. 

Mr Toft said that the hardest part would be to get everybody in the supply chain to work with equal intensity. But he added that environmental impact was rising up the list of concerns for Maersk’s customers. “We can’t wait to get all the ducks lined up,” he said. 

Climate change is certainly a threat to the way the shipping industry has operated in recent decades but Mr Solberg is keen to see it as more than that. “Climate change is one of the biggest concerns for us. It’s obviously a challenge but we also see it as a big opportunity for us as an industry and we have to invest in this opportunity,” he added.

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About this series

The impact of climate change has become much more visible in the past year, from physical impacts such as hurricanes and wildfires to those from climate-related legislation. Companies are now taking notice like never before. As in any great disruption there will be winners and losers from this change. FT reporters examine some of the industries that will be most affected

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