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27 July 2019
The longer shipping waits to tackle its carbon emissions, the sharper the shock to the industry, says LR report
FUEL oils will continue to make up a large part of shipping’s fuel mix as long as they remain cheap, but the industry must start to wean itself off of fuel oils soon if it is to stay in step with a decarbonising world, according to a report published by Lloyd’s Register.
Delaying the process of decarbonising shipping will necessitate more drastic and disruptive steps in the future, the study predicts.
The extra impetus for action comes after the 70th meeting of the International Maritime Organization's Marine Environment Protection Committee, and adds to warnings from industry groups that inaction on the part of shipping will lead to the sector contributing a larger share of global carbon emissions in the future, making shipping a prime target for aggressive regulatory intervention.
Low Carbon Pathways 2050 explores potential future scenarios for a shipping industry that retains its current 2.33% share of global carbon emissions as society decarbonises. The target in the three scenarios within the report is to stabilise global mean temperature within two degrees of pre-industrial levels, a lower target than that of the COP21 Paris Agreement.
Meeting that easier target through the adoption of alternative fuels and offsetting is possible, but will require major change to the industry, and needs to begin ‘imminently’, claims the report.
A decarbonising society will have lower demand for fossil fuels and so the demand for vessels to carry coal, oil and other hydrocarbons would fall, all of which is taken into account in the forecasting model. The behaviour of shipowners is also modelled, with fuel adoption tied to owners seeking to maximise profit.
As demand for fuel oils falls, so do their prices, thus increasing their cost competitiveness and slowing the migration away from heavy fuels and distillates. Over time however, refineries are expected to move away from creating fuel oils as demand falls, thus limiting supply.