Why developing countries have the most to gain from the switch from fossil fuel oils to green fuels in shipping
Developing countries, African landlocked countries and those with significant ports, small island nations (SIDs) often with long distances for goods to travel, all have much to gain from robust decisions by the International Maritime Organization, IMO, later this spring, giving effect to its Greenhouse Gas Strategy. It is these decisions that are meant to make shipowners switch to low carbon fuels, resulting in emissions reductions of at least 20% and near zero fuels being significantly used (at least 5% of the fuel mix) by 2030. All this as part of a trajectory to zero emissions shipping by 2050.
Several small island states (SIDS) have long called for the IMO to act on climate, with the Marshall Islands, a key flag state, back in 2015 making a plea for the IMO and its member states to act. A group of countries, including a number of SIDS and Liberia are now calling for a flat fee on shipping emissions of up to USD 150 per tonne of CO2, and for incentives of “zero and near-zero” fuels.
The wide and growing support for the IMO to put measures in place for genuine shipping decarbonisation is hugely welcome and here we set out why it is in developing countries’ interest to rally around and support robust measures by the IMO. At a recent meeting sponsored by the IMO in Mombasa, Kenya, on the green transition of shipping in Africa, IMO Secretary-General Arsenio Dominguez called for action for the IMO GHG Strategy to succeed: “The IMO’s climate ambition is clear. The focus now should be on action and implementation, and IMO stands ready to support African Member States in their efforts.” At the same time, there were also concerns expressed during the meeting that African countries may stand to lose from shipping turning green. I made the following arguments at the meeting in Mombasa for why African countries should join SIDS in calling for strong IMO actions.
The green shipping transition is likely to present many SIDS and African countries with opportunities. Bunkering is likely to happen in a growing number of ports, as low carbon fuels are less energy dense and therefore will take up more space, with ships likely to have to bunker more frequently.
Today’s bunkering infrastructure is also in part built around the oil and gas industry, and where heavy fuel oil can be sourced. Many African countries have enormous potential for renewable energy and may become producers of green hydrogen derived fuels, in particular green ammonia. Relatively soon, many ports in Africa could have facilities to handle locally sourced green ammonia.
Talk of green shipping corridors, as highlighted in the COP26: Clydebank Declaration for green shipping corridors, may turn out to be slightly misplaced, as it is more a question of widespread low carbon infrastructure and fuelling opportunities. It is this widespread greening we should all rally around and ensure that part of the income from the IMO’s carbon levy is channelled to support this scale up.
Many SIDS are vulnerable to climate change and many of them are already suffering from rising sea levels. At the same time, many of these countries rely on long-haul shipping for the import and export of goods, making their economies vulnerable to increased shipping costs. The same applies to many African countries, which are vulnerable to climate change and high transport costs.
As noted in Carbon Market Watch’s recent article, the EU should ensure revenue from carbon levies supports these nations rather than being restricted to the maritime sector, as Least Developed Countries (LDCs) and SIDS need funds to build resilience, develop alternative fuels, and adapt to global heating.
There is little doubt that the transition will be costly, that shipping will be more expensive in the future and SIDS and all developing countries are likely to be more affected by this than many other economies. This has long been recognised by the IMO and several proposals have been floated for how a carbon levy can in part be used to support SIDS and developing countries more widely.
It is in all African countries’ interests to support Liberia and the many SIDS in the call for a shift and a carbon levy. We all, and many developing countries in particular, stand to benefit from limiting climate change. A set of strong IMO measures will also be important beyond the shipping sector, in order to provide confidence in our international system’s ability to move from commitments to real measures and pathways.
Jonas Moberg
CEO, Green Hydrogen Organisation