Deal to cut shipping emissions still to face toughest test

22 May 2018 9:45am

16 April 2018. By Emily Waterfield.

A deal to cap emissions from the world's $829 billion shipping fleet closes a longstanding gap in policies to tackle climate change. But with no laws to back up the new UN maritime-emissions agreement, the plan risks struggling to win over investors.

Representatives of more than 170 countries on Friday evening agreed to bring carbon-dioxide emissions from shipping to at least 50 percent below 2008 levels by the end of 2050. Analysts predict that meeting this target would mean most new ships would have to run on renewable energy by sometime in the 2030s.

The EU had pushed for a 70 percent cut, but welcomed Friday's International Maritime Organization deal as a first step. "This is a good starting point that will allow for further review and improvements over time," EU climate chief Miguel Arias Cañete and transport chief Violeta Bulc said in a joint statement.

But this "further review and improvement" is the real test for international regulators and investors.

The new deal isn't legally binding, leaving it at risk of being seen as empty promises when it comes to funding the necessary shift away from fossil fuels.

Ships transport more than 80 percent of goods traded around the world today, and are responsible for about 2.2 percent of global greenhouse-gas emissions, according to IMO data.

The US, which has a fleet with about $96 billion in commercial value, led opposition to Friday's emissions deal.

The IMO has said it will review the deal in 2028. Before that, the UN agency is expected to look into developing legally binding measures, such as improvements to ships' energy efficiency, and the promotion of low-emission fuels.

Tristan Smith of the University College London Energy Institute said he thought it was "likely" the 50 percent target would tighten even further.

"But even with the lowest level of ambition, the shipping industry will require rapid technological changes to produce zero-emission ships," Smith said in an emailed statement. Smith estimated that there are today more than 50,000 ships trading internationally.

Regulators have struggled for years to agree on a policy to cap emissions from the global trading fleet, which the UN trade agency UNCTAD estimates to be worth $829 billion.

Failure to finalize even a timetable for setting industry emission goals in 2016 saw regulators accused of undermining political momentum to tackle climate change, developed when an international climate deal was struck the year before.

US President Donald Trump's decision to take his country out of the 2015 climate accord further weakened global climate-change intentions, and upped the stakes for a shipping deal to be struck.

Only Saudi Arabia and Panama joined the US in opposing the text agreed on Friday evening, with ship-owning countries including China, Greece, Japan and Norway joining signatories endorsing the new policy.

Travelling home from the IMO talks this weekend — by plane, train, car or ship — regulators will have wondered if emission cuts from this troublesome sector can finally become reality.