By John Kerry, Visiting Statesman at Carnegie Endowment for International Peace, former US Secretary of State, and former Special Presidential Envoy for Climate
Many eyes in the climate community are focused on COP30 in Belem this November, but there’s another critical climate moment happening now in September: London International Shipping Week.
This can be a moment to put industry’s muscle behind the decisions that need to be made to reap the benefits and accelerate the opportunity presented by the International Maritime Organization’s (IMO) April embrace of the Net-Zero Framework, which is to be formally adopted by governments next month.
The maritime community understands the significance of this agreement, the very first to align action with the IMO’s 2023 climate strategy words: combining a mandatory greenhouse gas fuel standard with a pricing mechanism that can reward first movers, and stimulate a rapid, worldwide transition that’s just and equitable.
First, though, that Framework must be adopted, and I encourage all Member States to support its passage at October’s extraordinary session of the Marine Environment Protection Committee. This deal agreed in April is the result of long and complex negotiations and a victory for multilateral cooperation.
A cornerstone to this approach is ensuring that all greenhouse gas emissions – not just CO2 – are addressed as soon as the protections enter into force in 2027. Similarly, emissions will be regulated on a well-to-wake basis.
While some details remain open for further negotiation, the shipping sector must now plan for a clean energy market – with opportunities for asset managers and fleet owners to reap the advantages of being first movers.
The details of the Framework shouldn’t cut corners or dodge emissions commitments with teeth; fuel production should be backed by a robust sustainability criterion that accounts for elements of production such as indirect land uses changes.
These standards will help ensure the market accelerates and rewards solutions which are truly sustainable, scalable, and capable of delivering deep greenhouse gas emissions reductions. Current evidence suggests the e-fuels, or fuels made from renewable energy and green hydrogen, meet these criteria best. Use of these fuels must also be properly rewarded within the IMO’s Framework and supported by further national and private actions.
Some shipowners are already accelerating their turn towards this growing market and should continue to do so. In 2024 supply of alternative fuels such as ammonia or e-methanol was projected to be 50% higher than it was just in 2023. Their example is an important one for others who may believe that short-term fixes are a path of least resistance. Economic opportunity awaits those who act now to race to the other side of the shipping transition.
Customers are clearly ready and waiting for additional shipowners to make the jump. In February the second tender from the Zero Emission Buyer’s Alliance was launched, with 40 member companies looking to ship 1.5 million containers’ worth of goods on e-fuels. These commitments are commendable. More companies must join, and more investment is needed for this effort to succeed.
Beyond opportunity, it’s important to also consider risk. Reinvesting in the old way of doing things or patchwork short term solutions such as liquified natural gas could translate into stranded assets for these companies in short order.
Beyond fuels, to meet the full goals of the Revised Strategy energy efficiency solutions or technological innovations such as wind-assisted propulsion power should be deployed at greater scale. Many remain relatively underutilized.
Shippers can reverse this trend, not just for the immediate fuel savings, but for the degree of resilience these technical measures offer in the face of strengthening climate regulations. More tools exist today to help shipowners navigate these decisions, and the financial sector can offer more creative products to accelerate the transition.
At COP 26, as Special Presidential Envoy for Climate, I stood with CEOs from the world’s largest companies and we launched the First Mover’s Coalition to demonstrate a simple proposition: a gigantic industry-led demand signal for the climate solutions hard-to-abate sectors were longing to create.
In a short time, global shipping has risen to the challenge and developed many of the tools envisioned in that initiative. We now have enabling frameworks backing up the growing market for solutions that everyone at London International Shipping Week can embrace.
We are on the cusp of something exciting – proof that “if you build it, better solutions will come.” It’s an historic moment to stop waiting for perfection, get to work, and decide that we’re all first movers now – for our economy, and our future.
