Maersk has announced its decision to become carbon neutral by 2050.
To achieve this target the Danish shipping giant will face challenges by its own industries and international institutions.
On the 4th of December 2018, in the context of COP24 in Katowice, A.P. Moller – Maersk announced the goal of being carbon neutral by 2050 and having carbon neutral vessels commercially viable by 2030.
Maersk is the world’s largest containers shipping company, that transports nearly one in five seaborne containers.
According to the statement, the Danish shipping giant has already reduced its CO2 emissions by 46% thanks to efficiency improvements on fossil fuel-based technologies.
However, further improvements cannot significantly reduce emissions, but only keep them at current level.
To step up its game Maersk has decided to go all in and achieving decarbonization by transitioning to carbon neutral fuel and supply chain.
The fuel of choice could well be biofuel, hydrogen, nuclear, even solar or wind, or a combination of all these. What Maersk made clear is that it will heavily invest in R&D in the next ten years or so.
Many companies across all industries have taken steps in the direction of cutting emissions, even at considerable level.
Maersk, by announcing its intention to end emissions altogether has adopted a much more radical approach, especially considering the industry it is part of.
Container ships carry about 80% of global trade and they essentially use bunker fuel, which is a residue from crude oil, cheaper than petrol and diesel, but also a lot dirtier as it contains high level of sulfur.
In 2020 a regulation limiting the percentage of sulfur allowed in bunker fuel will enter into force, making it more expensive and difficult to use.
The shipping industry is still very far from the idea of banning the use of bunker fuel, and the decision of Maersk seems even more radical.
The unpreparedness of the industry is reflected at institutional level as well.
According to the UN’s International Maritime Organization (IMO), international shipping was responsible for 2.2% of total global emissions in 2012.
However, it wasn’t until last April that IMO reached an agreement to cut emissions by at least 50% by 2050, compared to 2008 levels.
Approved in October, the follow-up program by the IMO’s Environment Protection Committee (MEPC 73) was intended as a planning tool to reach the 2050 goal. Short-, mid- and long-term measures will contribute to the success of the strategy.
To this date, these measures are yet to be considered.
Maersk is part of an industry that is reluctant to change and dealing with institutions unprepared to face the challenges of global warming.
The shipping giant however can count on a leading position within the industry.
According to Jigar Shah, that commented the announcement at the episode of The Energy Gang of the 27th of December, Maersk could go as far as restricting the access to the ports it controls to those that do not reduce their carbon emissions.
We will see how far Maersk is willing to go.