As per the United States-based research institute RTI International, climate change-related disruptions in the shipping industry will end up costing up to USD 10 billion per year by 2050.
“Many climate-related issues are wreaking havoc on the industry, with recent examples including severe water level drops in the Mississippi River and supply chain interruptions in the Panama Canal,” the North Carolina-based non-profit organisation noted in its study.
“The change in climate impacts the overall productivity of a vessel; the routes are affected, resulting in changes in plans and cargo losses,” it stated further, as it predicted another loss figure of up to USD 25 billion a year by 2100 due to the damage and disruption caused by ports alone.
The shipping sector has reportedly been sluggish of late, when it comes to cutting carbon emissions. Although Danish shipping and logistics company Maersk has been using Green methanol to power its container ships, the fuel’s high price and restricted supply have hampered the transformation process.
Worldwide Greenhouse gas emissions from the shipping sector, as of November 2023, are around 3%. The RTI International’s findings come at a time when the sector has committed to acquiring net-zero emissions by 2050, with experts asking for the implementation of vigorous measures to meet the targets set forth in the Paris Agreement.
The agreement was adopted at the 80th meeting of the International Maritime Organization’s Marine Environmental Protection Committee (MEPC), conducted in the earlier half of 2023. The pact united all 175 member states in a common objective, which was to ensure “a just and equitable transition to a 20-30% reduction in shipping emissions by 2030, progressing to a 70-80% reduction by 2040.”
The roadmap involves setting robust interim emission reduction targets for 2030 and 2040, apart from committing to a lifecycle approach for assessing emissions to avoid shifting emissions from sea to land, specifying a clear and rapid timeline for adopting and applying binding regulatory measures and last but not the least, making a commitment that shipping industry’s green transition will be just and equitable, and leave no one behind.
“Over the next seven years, the 2030 target will be met by transitioning 5-10% of marine fuels to zero-emission alternatives, in alignment with the Climate Champions 2030 Shipping Breakthrough. Additionally, all ships being ordered from now on must be capable of running on zero-emission fuels by 2040 if they are to be useful for their full lifespan. Global mandatory measures and regulations will enter into force in 2027, consisting of a global GHG fuel standard and an economic measure that sets a price on GHG emissions based on the full lifecycle emissions,” the pact read.