As emissions soar, cargo shipping faces a critical climate crossroads

A parade of giant cargo ships streams through the Panama Canal on any given day. Vessels carrying containers of bananas, salt, wine and precious metals sail north from South America to the Atlantic Ocean. Tankers filled with U.S.-made petroleum products and liquefied natural gas head south toward the Pacific. Hundreds of millions of tons of goods transit this Central American gateway every year.

Lately, however, that flow has started to slow.

An ​“unprecedented drought” is drying up the lakes and locks that carry ships through the 48-mile artificial waterway. Maersk, one of the world’s largest container shipping companies, has said the low water levels at the Panama Canal ​“are an example of the effects of climate change…which causes a ripple effect through the supply chain.”

The troubles in Panama arrive at a poignant time for the international shipping industry — the economic engine that moves roughly 80 to 90 percent of everything we buy and use.

This week, regulators began convening across the Atlantic in London to determine how quickly ocean-crossing ships will slash emissions and address their own contributions to the hotter, drier world that is disrupting their business. Oil-guzzling and gas-burning vessels contribute around 3 percent of annual greenhouse gas emissions, and more fossil-fuel-powered ships are hitting the water every year.

Members of the International Maritime Organization (IMO) are meeting near the banks of the Thames River through July 7 to revisit their five-year-old climate strategy. The U.N. agency’s existing goals call for reducing annual shipping emissions by at least 50 percent from 2008 levels by 2050, while also working toward full decarbonization of the sector ​“as soon as possible within this century.”

Climate advocates are calling on the IMO’s 175 member countries to dramatically ratchet up those targets, including by setting goals to halve shipping emissions by 2030 and achieve net-zero emissions as soon as 2040. Such benchmarks, they argue, would accelerate the adoption of low-carbon and zero-emissions fuels — including methanol, hydrogen and ammonia made from renewables — while also hastening the end of the diesel engine’s century-long reign over the high seas.

If the IMO opts for only modest revisions, experts say that could delay the development of cleaner fuels and energy-saving technologies, many of which are still in their infancy and will take many years and dollars to scale.

“The longer you wait [to act], the more ships are still entering into service that are burning fossil fuels and contributing to climate change,” said Antonio Santos, a federal climate policy director for Pacific Environment, who is in London this week and next for the negotiations. He noted that ships typically operate for 25 to 30 years, meaning that a diesel-burning vessel that hits the water today could still be running by the middle of this century.

“When it comes to avoiding the worst effects of climate change,” Santos added, ​“we’re running out of time.”

Emissions heading in the wrong direction

Scientists at the U.N. Intergovernmental Panel on Climate Change have warned that, in order to avert disastrous warming, the world will need to achieve ​“net-zero” carbon dioxide emissions by 2050. In order to do so, all sectors of the economy must make ​“immediate and deep emissions reductions” — starting yesterday.

In 2015, the world adopted a landmark climate accord known as the Paris Agreement, which called for limiting global temperature rise to 1.5 degrees Celsius above preindustrial levels. However, the agreement did not include pollution from international shipping and aviation; those industries were left to regulate themselves.

Two and a half years later, the IMO set its own climate targets, calling for a 50 percent emissions cut by midcentury. Delegates and climate advocates described the deal as both historic — given the shipping industry’s tradition of dragging its feet on environmental issues — and the ​“bare minimum” of what’s required to steer the shipping industry toward a cleaner course. A negotiator for the Marshall Islands likened the deal to reaching ​“first base” in a game of baseball.

The IMO’s 2018 strategy is not legally binding. But in recent years, shipping regulators have adopted a series of mandatory short-term measures that require new and existing ships to meet energy-efficiency requirements and to improve their carbon-intensity. (The latter is a measure of a ship’s CO₂ emissions, linked to the amount of cargo carried over a voyage.)

Yet even if individual ships use less fuel, the problem is that more vessels continue to set sail every year, increasing the industry’s overall fuel consumption and associated emissions. Older, more polluting vessels are also sticking around longer. As a result, the industry’s CO₂ emissions rose by about 23 percent between January 2012 and April 2022, according to the U.N. Conference on Trade and Development.

“There’s been no progress in terms of actual emission reductions,” said Delaine McCullough, a senior leader at the Ocean Conservancy, a nonprofit advocacy group. ​“We still have yet to hit peak [shipping] emissions, which means emissions continue to grow.”

Solutions emerge but are only getting started

For all of its shortcomings, the IMO’s initial strategy has helped launch a wave of investments in cleaner shipping technologies in the last five years.

It’s the beginning of what experts say will ultimately be a trillion-dollar, multidecade enterprise to clean up tens of thousands of merchant ships. That includes not only building new ships but also installing dramatically more wind, solar and other renewable energy sources to create the clean alternative fuels needed to power shipping’s transition.

Maersk and CMA CGM, two of the world’s top container shipping giants, have placed orders for dozens of vessels that can run on methanol. The common chemical can be used as an alternative ​“drop-in” fuel, and it doesn’t produce harmful soot or particulate matter when burned. Most of today’s methanol supplies are made using fossil gas. But if produced using renewables, methanol can sharply curb carbon dioxide emissions compared to using oil-based fuels — though it still emits some CO₂ when burned.

For a longer-term fix, a growing number of companies in the United States, Europe and Asia are working to make ammonia a reality for giant ocean-crossing vessels. The toxic compound is mainly used today to make fertilizers, plastics and cleaning products; like methanol, it’s also primarily made using fossil fuels in energy-intensive processes. But ammonia doesn’t produce CO₂ emissions and is relatively energy-dense as a fuel, making it easier to store on board than hydrogen or batteries.

Major ports around the world are starting to establish ​“green-fuel corridors” to boost the production and distribution of methanol, ammonia and other fuels at common destinations. In one such initiative, the ports in Shanghai and Los Angeles — the No. 1 and No. 17 busiest container hubs in the world, respectively — are developing plans to launch the first zero-carbon container ship to cross the Pacific Ocean by 2030.

Operators of existing ships are also increasingly adopting technologies that can immediately reduce their fuel consumption, including high-tech wind sails and towing kites and sophisticated digital platforms that help ship operators chart more efficient voyages.

“The first movers know the transition will happen,” said Marie Cabbia Hubatova, director of global shipping at the Environmental Defense Fund in London. ​“Many stakeholders are starting to realize that, the later the [shipping] sector moves, the more expensive it will be.”

All eyes on the IMO 

At the same time, pressure is mounting outside the walls of the IMO to curb pollution from cargo ships.

Earlier this year, European policymakers adopted rules to reduce the ​“well-to-wake” emissions-intensity of fuels used on board ships trading in the European Union, starting on January 1, 2025. In the United States, legislators are pushing to impose similar measures on ships doing business in America’s ports through the Clean Shipping Act, which was recently reintroduced in Congress.

And retail giants such as Ikea, Target and Walmart — under fire from environmental groups and consumers — are pledging to move their products off of fossil-burning ocean freighters in the next decade or so.

After years of frustrations, such developments are lending a fresh, if cautious, sense of optimism to this latest round of IMO negotiations, said Hubatova, who is attending the meetings. She noted that, unlike in prior years, the general public is becoming increasingly aware of shipping’s role in spewing not just planet-warming gases but also health-harming air pollutants in port communities.

However the IMO decides to act, the revised targets are just the beginning. In subsequent meetings, delegates will still need to set new binding policies for curbing shipping emissions, including potentially by putting a price on ships’ emissions. Such a measure could help raise much-needed funds to spur adoption of cleaner fuels — particularly in developing countries that are bearing the brunt of a hotter climate despite contributing the least emissions, Hubatova said.

“I’m hoping that member states will agree on something that’s in line with 1.5 degrees,” she said. ​“I think there is a good chance it will happen. And I’ve never felt optimistic about the IMO before — let’s put it that way.”