Source: Data provided by Network for Transport and the Environment
Maritime shipping is the world's most carbon-efficient form of transporting goods - far more efficient than road or air transport. Yet, the industry seeks to further improve the fuel efficiency and carbon footprint of its vessels. Today's container ships and vehicle carriers enable the movement of tremendous volumes of goods across the world, which has fueled global economic growth in a manner considered implausible only 50 or 60 years ago.
The World Shipping Council (WSC) and its member companies are engaged in numerous efforts to reduce carbon dioxide (CO2) and further improve efficiency across the fleet. (See the Frequently Asked Questions or FAQ about carbon emissions and shipping below.)
Efforts focus on significant improvements to fuel economy with a subsequent reduction in emissions. These efforts include the introduction of new, larger and more efficient vessels, slow steaming and technical modifications to existing ships.
In April 2015, Drewry Supply Chain Advisors independently concluded that carriers' efforts are paying off when it declared in its Logistics Executive Briefing that "Shipping is cutting CO2 emissions."
The liner shipping industry through WSC is also working with governments at the IMO to develop effective international regulations that will result in reduced carbon emissions from shipping. Those discussions can be summarized as follows.
vessel Energy Efficiency Design standards
In recent years, discussions at the International Maritime Organization (IMO) have resulted in the development of an Energy Efficiency Design Index (EEDI) that led to the adoption in 2011 of legally-binding energy efficiency standards applicable to newly-built ships. The standards apply to ships built in 2013 and later and require all future ships to meet increasingly stringent fuel economy standards over time. Learn more
The EEDI (Energy Efficiency Design Index) represents a measure of the relative efficiency of a vessel by establishing an index to measure the inherent design efficiency of a given vessel in moving a given cargo volume over a given distance. Learn more
Vessel energy Efficiency operating standards
The World Shipping Council (WSC) has strongly supported the establishment of energy efficiency design standards for ships. These kinds of energy efficiency standards have been created for automobiles, appliances, and other types of energy consuming products. They can provide meaningful and lasting improvements in energy efficiency and reduce the amount of fuel required for operation. Because fuel costs are the majority of a container ship operator’s operating costs, ocean carriers have a huge interest in reducing the amount of fuel their ships consume, and have undertaken numerous initiatives to improve fuel efficiency – from reducing vessel speed, to sharing their vessels with other carriers, to building ever larger ships that are more energy efficient per unit of cargo carried.
As noted above, the IMO has adopted enrgy efficiency design standards that apply to the design and constrction of newly built ships. It would be much more complicated and challenging, however, for governments to design effective and reasonable regulations governing how one operates a piece of equipment that complies with specific full consumption limits. For example, a person may purchase a car that is designed to achieve X miles per gallon in city driving and Y miles per gallon on the highway; however, no government regulates how the purchaser operates the car from a fuel efficiency perspective once it has been purchased or what amount of fuel a given vehicle might consume in a single year. There are numerous variables that will determine how much fuel is consumed by a particular vehicle. Further, in marine shipping, ships are subject to changing commercial and environmental conditions as they move from one trade lane or geographic area to another. These changing conditions directly affect in-use fuel consumption, yet the increase or decrease in fuel consumption associated with changing commercial and environmental conditions is something that the operator has little or no control over.
Nevertheless, some governments at the IMO have proposed that the organization should consider developing regulatory standards that stipulate annual fuel consumption limits or operational energy efficiency standards that limit fuel consumption relative to a given proxy of work performed by the ship. This would be a very complex and uncertain endeavor. With the support of many other maritime industry organizations, WSC submitted comments to the IMO’s Marine Environment Protection Committee (MEPC) outlining a series of concerns and policy questions concerning proposals at the IMO to establish operational energy efficiency of ships. The paper received broad support from a majority of governments at the IMO, which has invited member governments to address the questions raised in the WSC paper. Further discussion of these issues is expected when the MEPC next meets in May 2015.
market based measures (mbm)
Governments, industries and consumers around the world are responding to concerns about the effects of carbon dioxide (CO2) emissions on climate change by determining how to design and operate vessels that generate less CO2, further improving the already impressive efficiency of moving goods by ship. Agreement was reached in 2011 on mandatory, international energy-efficient vessel design standards that represent the first globally agreed upon standards addressing CO2 emissions for any sector in the world. While these standards will further advance the efficiency of ships around the world, the WSC together with other organizations and governments, is engaged in discussions that explore how to further reduce emissions from the existing fleet.
Discussions at the IMO have led to a number of proposals for "market-based measures" or MBM, and how such measures might stimulate further advances and improvements in addressing CO2 emissions. MBM proposals include establishing a carbon tax on marine fuels, creating an emission trading regime applicable to shipping,and efficiency-based systems and related proposals that involve a hybrid approach. In 2010, the WSC proposed to the IMO that mandatory energy efficiency design standards be created and applied to both new and existing vessels through the establishment of a global Vessel Efficiency System (VES). As part of on-going discussions on this issue and as a refinement of earlier proposals, WSC and Government of Japan jointly proposed in 2011 that the IMO create a global Vessel Efficiency Incentive Scheme (EIS).
The WSC and its members have also argued that the most effective means to addressing carbon emissions from shipping is to improve the fuel efficiency and carbon footprint of ships themselves. Some proposals seek to generate large sums of money from shipping that would, in theory, purchase carbon "offsets" and fund other activities in other land-based sectors. See WSC Submittal to the IMO in 2010 on this issue.
Discussions at the IMO concerning the development of market-based measures applicable to marine shipping have not resulted in agreement on any market-based proposal including those proposed by WSC. It should be noted that international agreement on a comprehensive market-based system applicable to shipping across the world has proven to be very difficult for a variety of reasons. Challenges include differences among governments concerning what standards or treaty structure is appropriate and effective, and to what countries should the obligations and resulting costs apply to. The latter point is subject to substantial differences in viewpoint and numerous governments are engaged in protracted debate at the IMO and through the United Nations Framework Convention on Climate Change (UNFCCC) in an attempt to bridge differences on these fundamental issues.