Industry Issues

Carbon Emissions

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 members are engaged in numerous efforts to reduce carbon dioxide (CO2) and improve efficiency, and have actively supported development of a global, legally-binding agreement addressing CO2 emissions from ships through the International Maritime Organization (IMO).

Liner Shipping and Carbon Emissions Policy

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 reach in 2011 on mandatory, international energy-efficient vessel design standards that represent the first globally agreed upon standard 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 form the existing fleet. 

Discussion has led to a numberof proposals, often referred to as "market-based measures" or MBM, and how those MBM 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, efficiency-based systems and related proposals that involve a hybrid approach. The WSC and its members have 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.

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. The primary difficulty does not lie in industry opposition to a global agreement. Rather, the primary challenges lie in differences concerning what standards or treaty structure is appropriate and effective, and to what countries whould 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.

Advancing the Discussion at the International Maritime Organization

In January 2010, WSC made two submissions to the IMO to inform this debate in its early stages: 1) a proposal for a new international Vessel Efficiency System (VES) to be used for the management of CO2 emissions and 2) a paper discussing emissions "caps" and related policy issues for maritime shipping.  At the same time, the World Shipping Council prepared a paper to explain the various issues and the work of the liner shipping industry to address them. (Alternatively, view or download a presentation that summarizes key elements of the paper. Note this presentation is a PDF file. To view as an on-screen presentation, select View, View Full Screen Mode.)

In an effort to advance the discussion at the IMO on the difficult issues presented by the development of a new regime addressing carbon emissions, the World Shipping Council and the Government of Japan in February 2011submitted to the IMO a joint proposal to establish a new, legally-binding agreement, which would require new and existing ships to meet stringent, but realistic efficiency standards. These standards would increase in stringency over time and would result in a global fleet that is significantly more efficient and carbon-friendly than today's ships. This proposal is called the Vessel Efficiency Incentive Scheme (EIS) and is a further refinement of the previous proposal that had been submitted by WSC to the IMO in January 2010. The EIS provides that new and existing ships that meet specified standards would not be subject to any fees, penalties or costs other than those costs associated with the design and installation of more efficient ship technologies. Those ships that fall short of the specific standards would be required to pay a fee (or penalty) that is based on the amount of fuel consumed and how far short of the standard the sprcific ship falls. Vessel effiency standards would be established and measured using the Energy Efficiency Design Index (EEDI) developed by the IMO for newly-built ships.

In July 2011, WSC and Japan's Ministry of Land Infrastructure, Transport and Tourism issued a paper entitled "Design and Implementation of the Vessel Efficiency Incentive Scheme (EIS)" providing a further explanation of how this innovative carbon emission reduction proposal would work, and why it offers effciency, cost and environmental advantages when compared to other proposals. View or download the paper in letter size or view or download in A4 size.

In March 2012, the IMO made a decision not to apply the Energy Efficiency Design Index (EEDI) to existing vessels. This decision had negative implications for the proposals made by the WSC, Japan and the United States, whose proposals utilized the EEDI as a measure for assessing the efficiency of existing vessels. As a result of the March 2012 decision, the Government of Japan submitted a new proposal, which differed from the EIS proposal made earlier by WSC and Japan. The United States also made signficant changes to its propsal to establish a Ship Efficiency Credit Trading System (SECT). At this juncture, WSC has not chosen to endorse any proposal other than its EIS proposal.

Frequently Asked Questions about Carbon Emissions and Shipping

Q: Why is the liner shipping industry so important economically?

Q: Why is the shipping industry so important environmentally?

Q: How much carbon dioxide does the international shipping industry emit per year?

Q: What is the expected trend in carbon dioxide emissions from the shipping industry?

Q: Does international maritime shipping of goods produce more CO2 emissions than transporting locally produced goods because of the long transportation distances involved?

Q: What are the potential methods of reducing carbon emissions from marine shipping?

Q: What efforts are being made by the industry to reduce its carbon footprint?

Q: Why is the shipping industry participating in the effort to reduce carbon emissions and address global warming?

Q: What incentives currently exist for the industry to lower fuel use and carbon emissions?

Q: What is the current international process for regulating greenhouse gas emissions from ocean going vessels and what are the next steps?

Q: What are the issues that make reaching agreement challenging? Why is implementation difficult if everyone agrees on the need to reduce CO2 emissions?

Q: What challenges does the unique and complex nature of the shipping industry pose in crafting effective and responsible climate policy?

Q: What do these complexities and challenges mean for the likelihood of a carbon emission regime applicable to shipping?


WSC and Japan's MLIT explain this innovative proposal and why it offers efficiency, cost and environmental advantages when compared to other proposals


Shipping is the most carbon-efficient mode of transport yet reaching global agreement to address carbon emissions from shipping is complex.