Pro-Hydrogen Shipowners Use COP29 to Call for "Real Zero" Carbon Standard

 

This year's global climate conference on implementation of the Paris Agreement, COP29, is lightly-attended by major decisionmakers. National leaders like Xi Jinping, Joe Biden, Narendra Modi, Olaf Scholz, Lula da Silva and Emanuel Macron all decided not to attend this year, and with Biden soon to be replaced by President-elect Donald Trump, the U.S. is expected to withdraw from the agreement within months. But shipping's luminaries are out in force, including IMO Secretary General Arsenio Dominguez and who's-who of big players. 

During the conference, more than 50 shipping stakeholders released a call for action on a supply chain for hydrogen-based alternative fuels, led by Fortescue, the Australian mining giant with large-scale green hydrogen ambitions. Signatories included Anglo-Eastern, Adani, LR, ONE, MOL, Trafigura and Fortescue. Maersk, once the industry's leading champion of green hydrogen-based fuels, did not join the call. 

The petition calls for adopting ambitious mandatory measures on emissions at MEPC83 next April, in time for entry into force in 2027. First, the measures must include a greenhouse gas intensity fuel standard - a technical requirement - with a "strong penalty for noncompliance." Second, the group wants to see a global and appropriately-priced bunker tax, on the order of $100-150 per tonne of CO2 equivalent. This is equal to about $300-450 per tonne of bunker fuel. 

It also calls for strong standards for well-to-wake GHG emissions accounting, and for criteria that aim for absolute emissions reductions. 

"Fortescue does not believe so-called transition fuels [LNG] are the way forward. We need the IMO to agree to a zero emissions fuel standard," argued Fortescue founder and CEO Dr. Andrew Forrest, whose firm charters about 1,000 bulkers per year. "The choice is whether to waste the next 10 years on incremental measures that cost more and deliver less or deliver a Real Zero fuel standard that drives investment into real maritime decarbonization solutions."

Large shipowners' emissions compliance strategies have shifted away from hydrogen-based methanol and towards LNG over the past year, and order volume has surged at East Asian shipyards. Maersk's newfound interest in LNG dual-fuel ships may be the most prominent example. LNG-powered newbuild orders have outpaced methanol this year, though methanol newbuild volume continues to rise in absolute terms.