Now that COP26 is behind us, we must ask “What will be the impact for the maritime industry, emissions reductions, and what’s to follow?”
In this Chord X Insights, we highlight the key takeaways for the maritime sector and how the outcomes of COP26 will impact the industry’s decarbonisation goals.
At Chord X, we are proud to be part of the decarbonisation mission with the introduction of our ecoMax module. This emissions monitoring module allows fleet owners, operators, and managers to view CO2, SOx per MT and issue a daily report for compliance. Likewise, it allows owners to quickly assess how their fleet’s emissions are aligning with the IMO target of zero carbon by 2050.
Was COP26 important for shipping? In short, yes.
Why is COP26 important for shipping emissions?
The summit resulted in setting new targets for shipping emissions, which remain the responsibility of the UN and the IMO.
The consensus after COP26 is that current commitments and initiatives are not sufficient to limit the global temperature increase to 1.5°C. The silver ling, however, is companies seem to feel the pressure from key stakeholders to decarbonise and make lasting changes.
After COP26, we can observe two types of companies: those that fear being overtaken by their competitors and those that see opportunities in decarbonisation. Before, more than 200 companies signed a call to action for the Shipping Decarbonisation (link below) asking governments to commit to decarbonising the maritime industry by 2050. Net-zero, rather than zero carbon emissions, is the new standard, combined with carbon accounting, such as emissions trading.
3 key initiatives were launched at COP26:
- Green corridors;
- The future of the carbon market;
- LNG as an interim solution.
A total of 19 countries signed the Clydebank Declaration, which is a call for international partnership and the acceleration of zero-interest shipping corridors between at least two countries.
Chord X welcomes this initiative as we can progressively see how the public and private sectors are working together to achieve net-zero shipping. We continue to research and develop the solutions the industry needs to make the net-zero fleet a reality.
EU Emissions Trading Scheme (ETS)
The EU ETS will operate by setting limits on emissions by companies operating in the EU. These limits, or ‘credits’, can be bought and sold by individual companies, allowing large companies to emit more greenhouse gases (GHGs) into the atmosphere by buying these rights from other companies.
This strategy, also known as “cap and trade”, sets limits at the federal level while allowing companies to act independently, buying or selling their GHG emission rights.
Today, many companies rely on carbon credits to meet their zero emission targets and the COP agreement on carbon markets means that emissions trading is here to stay and will include the shipping sector from 2023. The price of allowances is currently, after the COP26, €66 per tonne of CO2.
To LNG or not to LNG
At COP26, the shipping industry was very vocal in calling for a global carbon tax and more ambitious emission reduction targets.
At Chord X, we see LNG as an interim solution before zero-emission fuel becomes a reality. The Global Methane Commitment, co-authored by the European Commission and the US, to reduce global methane emissions by at least 30% from 2020 levels by 2030, has been signed by over 100 countries and is likely to impact the attractiveness of LNG over this decade and possibly beyond.
Do you want to know more about the key initiatives above and how Chord X can improve the efficiency of your fleet? Don’t hesitate to contact us: email@example.com