Green Shipping

Being a small island nation at the bottom of the planet, New Zealand is heavily reliant on shipping to take its goods to markets around the world. In 2019, exports of goods accounted for roughly 20% of New Zealand’s GDP.

It’s not surprising then, that pollution from shipping must represent a significant part of the New Zealand economy’s impact on the environment. Even if it’s not captured in our own environmental foot-printing, it’s something that consumers overseas do consider when comparing imported products from New Zealand to locally produced alternatives.

And it’s not just the fuel use, and ‘food miles’ issues. It’s also the nature of the emissions from shipping. The apartment-block-sized engines used in cargo ships are powered by heavy fuel oil – the dirty leftovers from petroleum distillation. It’s such a thick sludge that it’s almost solid at room temperature and needs to be heated to over 140 degrees Celsius before it can be fed into the engine. And the emissions it throws off when burned are equally dirty, producing oxides of nitrogen and sulfur and more carbon emissions than almost any other fossil fuel.

Being up to a third cheaper than cleaner fuels, heavy fuel oil can properly be described as cheap and dirty.

Step in the International Maritime Organisation (IMO).

An agency of the United Nations, IMO is the global standard-setting authority for the safety, security and environmental performance of international shipping. Its main role is to create a regulatory framework for the shipping industry that is fair and effective, and universally adopted and implemented. It plays a key role in ensuring that ship operators cannot cut corners by compromising on safety, security and environmental performance.

From 1 January 2020,the IMO’s new emissions standards kicked in to substantially reduce harmful sulfur oxide emissions from ships, meaning significant benefits for human health and the environment.  This is a great step forward, but it hasn’t happened overnight. It’s been part of a plan that was agreed in 2008 and ratified in 2016, and has seen a range of solutions implemented. Some ships have adopted technology using new, cleaner fuels. Fuel suppliers have developed innovations in fuel formulations to improve the characteristics of heavy fuel oil. And some companies have installed scrubbers, to clean up exhaust emissions.

But the improvements won’t stop there. By 2050, the IMO requires that the shipping industry’s total emissions must be at least half of what they were in 2008. With projected growth in international trade and the number of ships at sea, Wired reports that this goal actually equates to an 85% reduction in emissions intensity per ship.

Johannah Christensen, the managing director of the nonprofit Global Maritime Forum is quoted in Wired describing that target as “like a moon shot”.

It’s not quite the same as John F Kennedy’s “We choose to go to the moon” speech encouraging the American people to support the Apollo space programme. IMO hasn’t put out a rousing vision. They’ve made it a requirement. However in both cases it’s not hard to imagine those responsible for making it happen hearing the challenge and scratching their heads wondering how they’ll do it.

In the case of shipping it means new fuels like hydrogen and ammonia and all the infrastructure required to store, transport and use those fuels safely and efficiently. A mammoth task.

Putting the significant challenges aside, this may be a model we can learn from and shows the role for sensible regulation as part of our toolbox in tackling climate change. Set reasonable rules in an industry which can be efficiently regulated, and the market will drive investment and innovation.

It also takes away the problem of the blinkered consumer. If all shipping is required to meet these standards (possibly at higher costs), there won’t be a low-cost alternative provided by someone operating at a lower costs and lower standards to tempt consumers with lower prices. The impact on the environment is a case of market failure which regulation can address by enforcing a minimum standard to prevent corner-cutters from winning consumers who are blinkered to anything but price and immediate product characteristics.

There’s still a case for winning hearts and minds a-la “we choose to go to the moon”, but sometimes regulation will have a role. Either way, there’s good cause to have confidence in the ability of innovators and scientists to develop new solutions, but surely the motivation is that much greater if facing a new set of rules.

Regardless, the IMO’s new requirements are good for a country like New Zealand, reliant on shipping and a clean-green image, and good for the planet. This truly is a case of “He waka eke noa” – we are all in the same boat.


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