Written evidence submitted by the Tyndall Centre for
Climate Change Research (MAR0008)

Authors: Alejandro Gallego Schmid, Alice Larkin, Branwen Tomos, James Mason, Simon Bullock

Introduction

The Tyndall Centre for Climate Change Research is an internationally recognised climate change research group, bringing together natural scientists, economists, engineers and social scientists to develop sustainable responses to climate change. Founded in 2000 as the first interdisciplinary research centre on climate change, Tyndall now includes researchers based in four UK universities, headquartered at the University of East Anglia. This submission is by researchers at the University of Manchester (Tyndall Manchester). All the views expressed in this submission of evidence are attributed to the named authors and do not necessarily reflect those of researchers within the wider Tyndall Centre or the University of Manchester. This submission is underpinned by over ten years of research activity on decarbonising shipping– including the ongoing UKERC low carbon aviation and shipping research project and the Supergen Bioenergy Hub.

Summary

• It’s essential that the UK sets a shipping target of zero CO2 emissions before 2050, delivering at least a third of these reductions by 2030: this is what is required globally to be compatible with the Paris climate goals[1]. The UNFCCC principles of responsibility and capability imply the UK should go faster than the global average, with 50% cuts by 2030 and zero by 2040[2].
• This target should include the UK’s share of international shipping emissions, as well as domestic shipping, to reflect the recent inclusion of international shipping into the Climate Change Act’s emissions accounting and be in keeping with the science.
• The UK now rightly includes international shipping emissions in its carbon budgets, however its method for accounting for these emissions is an underestimate. A more accurate measure would be to calculate these emissions on a voyage-based approach, which would align better with methodological improvements at global and EU levels.
• The Greenhouse gas (GHG) emissions of alternative fuels, including LNG, hydrogen, and bio-fuels, must be evaluated from well-to-propeller, using life cycle assessment techniques, before being promoted for use, to ensure that they provide indisputable GHG savings compared to conventional fuels.
• The modelling underpinning the Clean Maritime Plan (CMP) needs to be updated to reflect the new Government guidance on carbon values for policy appraisal. This will radically change what measures are deemed cost-effective, particularly in the 2020s, putting a far greater focus on early action.
• Policies to promote decarbonisation were flagged in the CMP but have not yet been delivered. Capital support for shore power projects, greater funding for a multi-year Clean Maritime Demonstration Competition (CMDC), a package of supportive economic instruments, and inclusion of international and domestic maritime emissions in the UK ETS are all priorities.
• There is an opportunity to align policy on air quality and climate change through updated guidance and policy support for ports, via an integration of Port Air Quality Strategies with the planned refresh of the Clean Maritime Plan.
• Wind-assist technologies are typically underestimated or side-lined as a decarbonisation option, globally and in the UK, and should receive greater prominence for policy support in the CMP refresh, given the need to deliver at least a third of required reductions by 2030.

Main submission:

This submission focusses on the environmental aspects of Maritime 2050, specifically those related to climate change mitigation. It covers 7 issues:

1)     Ambition and targets

2)     Emissions accounting: international vs domestic

3)     Emissions accounting: lifecycle assessment (LCA)

4)     Carbon prices in appraisal

5)     Policy support

6)     Integrating air quality and climate mitigation

7)     Wind-assist technologies

1              Ambition and targets

The Government’s approach to ambition on climate change and shipping has evolved since the publication of Maritime 2050 in January 2019. Maritime 2050[3] set a vision that “In 2050, zero emission ships are commonplace globally. The UK has taken a proactive role in driving the transition to zero emission shipping in UK waters and is seen globally as a role model in this field, moving faster than other countries and faster than international standards.” (section 8.2); it also said that the Government “will consider the merits of introducing a medium-term target for emissions of GHGs and air quality pollutants from UK shipping. Further detail on this consideration will be set out in the Clean Maritime Plan” (CMP) (para 47). 

The July 2019 CMP set out that, at the time, the UK’s share of international shipping emissions were not formally included within the UK Climate Change Act 2008, and although it stated that: “it is clear that targets are necessary in order to support an effective domestic regulatory environment”, the CMP concluded that “further consultation would be required to determine the exact nature of any binding target”.

Three major developments occurred in 2021. First, in June the UK legislated the 6th Carbon Budget, which formally brought international shipping emissions into the UK’s Climate Change Act 2008 carbon accounting[4]. Second, the July Transportation Decarbonisation Plan (TDP) [5] committed to decarbonising domestic shipping by 2050 at the latest, and committed to push for greater ambition at the international level, to strengthen the IMO’s current target of 50% reductions on 2008 levels by 2050 (the IMO’s current targets are out of step with the goals of the Paris Climate Agreement[6]). The UK followed up this latter TDP commitment in a September submission to the IMO with the USA, Costa Rica and Norway[7], calling for zero global shipping emissions by 2050 at the latest. Third, at MEPC 77 in November, the IMO’s final communique “recognized the need to strengthen the ambition of the Initial IMO GHG Strategy during its revision process”[8], due in 2023.

The Government states that targets are needed, but these are not yet in place in the UK’s maritime strategy. This absence is problematic, as there is no clear overarching goal or interim targets to guide either progress or policy development. It is essential that the planned CMP refresh sets clear targets, reflecting the 2021 announcements. Three issues are critical: i) comprehensive coverage, ii) ambition commensurate with the overarching climate goals laid out in the Paris Agreement, and iii) interim 2030 goals:

1.1              Coverage

The CMP mentions targets for domestic shipping, but not for international. The UK has now legislated for the UK’s share of international shipping emissions to be included within its carbon budgets, so it is essential that targets in a revised CMP cover both international and domestic greenhouse gas emissions.

1.2              Ambition

Research by Tyndall Manchester sets out that for international shipping to play its part in limiting global temperature rises to the Paris 1.5OC would require an emissions pathway for carbon dioxide reaching zero emissions before 2050[9]. The principles of responsibility and capability in the UNFCCC[10] imply that richer developed countries would set tougher targets than the global average; this is also set out in the vision for Maritime 2050[11]. The UK should aim for zero emissions by 2040, for both domestic and its share of international shipping[12].

1.3              2030 targets

Global warming is determined by cumulative CO2 emissions over time. As such it is imperative that all sectors deliver deep emissions reductions in the 2020s, on a pathway to zero emissions before 2050. It is not possible to leave decarbonisation until the 2030s and 2040s and still be 1.5OC compatible – the required emissions trajectories in the 2030s to stay within the same 1.5OC cumulative emissions envelope would then become too steep to be feasible: see Figure 1 below.

Figure 1: The IMO’s targets and Paris-compatible 1.5°C pathways[13].

To allow manageable pathways in the 2030s and 2040s, immediate global shipping CO2 emissions reduction is needed, delivering cuts of at least a third by 2030; the principles of responsibility and capability imply that the UK should take stronger targets than this global average, implying 50% reductions by 2030, on a pathway to zero emissions by 2040.

2)    Properly accounting for international and domestic emissions

The UK has rightly decided to formally incorporate international aviation and shipping emissions into its carbon budgets. At present, the UK measures international shipping emissions on the basis of bunker fuel sales. Methods to calculate these emissions vary considerably, however the use of bunker fuel sales is particularly inappropriate for a country like the UK, due to the ease of bunkering at the nearby port of Rotterdam. This skews the UK’s true contribution and will distort effective policy making unless addressed. These issues have been addressed extensively in previous research by the Tyndall Centre[14] and by the UK Climate Change Committee[15]. The IMO’s 4th Greenhouse Gas report recommends moving to a “voyage-based” system for accounting for domestic and international emissions, and the UK’s Climate Change Committee say that if the new 4th GHG approach were adopted, this would approximately double the UK’s international shipping emissions as currently estimated[16]. Other approaches, such as apportioning based on freight imports, would see a six-fold rise in the UK’s international shipping emissions.

There will likely be a move to the “voyage-based” approach internationally in coming years, so there is good reason for the UK to adopt this early for its national emissions accounting for international shipping; this would lead to a greater focus on international shipping emissions, compared with the current focus on domestic shipping emissions.

3)    Emissions accounting: alternative fuel full life-cycle assessment

It is widely regarded by the shipping industry, policymakers, and in the academic literature[17], [18] that alternative fuels will play a key role in achieving the International Maritime Organisation’s (IMO) target of reducing greenhouse gas emissions by 50% by 2050, and in transitioning the industry to zero emissions in line with the Paris Climate Agreement[19]. It is, however, essential that fuels are viewed from a life cycle perspective, and that their environmental performances are assessed from cradle to grave, not just on their exhaust emissions[20].

The Maritime 2050 report states that there will be investment into maritime infrastructure and, therefore, the uptake of lower carbon fuels such as hydrogen, ammonia, methanol, natural gas and biofuels will be promoted within the UK. Careful consideration needs to be given to the whole life cycle impact of these alternative fuels, including the potential indirect effects associated. Some key factors to consider are:

3.1              Liquefied natural gas (LNG)

The uptake of liquefied natural gas as an alternative fuel for shipping has increased, as it offers a cleaner burning alternative to heavy fuel oil, that meets the IMO regulations of a global 0.5% sulphur cap, and a 0.1% sulphur cap enforced in Emission Control Areas (ECAs), under MARPOL Annex VI[21], [22].

Whilst its benefits from reduced sulphur and particulate matter emissions should not be disregarded, it is important to consider the methane leakages from LNG ships, and from natural gas infrastructure in general, as well as the levels of CO2 produced now and into the future. Methane slip would have to be reduced to 0.5% compared to current 3% average levels[23] if LNG tankers are to offer any GHG emission reduction compared to conventional diesel engines. This would, however, still not represent adequate progress, given that the goal is near-zero emission fuels, where greenhouse gas emissions are cut drastically and in absolute terms, not just kept static.

This must be taken into consideration before any decision to promote the uptake of LNG as an alternative shipping fuel. LNG is a high-carbon fuel, and it should not be used. While it is being phased out, efforts should be made to minimise methane leakage.

3.2              Hydrogen and derivatives (e.g. ammonia and methanol)

Currently, around 80% of hydrogen production worldwide is produced from natural gas using steam methane reforming (SMR), known as grey hydrogen[24]. Reliance on fossil fuel supply chains, and combustion of natural gas involved in the production process make grey hydrogen a high carbon fuel (9.2kgCO2. EQ/kg H2) when compared to other production methods, such as electrolysis using renewable electricity (0.3-1 kgCO2. EQ/kg H2)[25].

Producing hydrogen from natural gas results in fugitive emissions (direct methane emissions to the atmosphere from leakage). Fugitive emissions should also be considered and carefully monitored even when carbon capture and storage (CCS) is used alongside SMR for hydrogen production (also known as “blue hydrogen”). The use of CCS does not avoid methane leakage, a factor that needs to be accounted for when considering the environmental performance of blue hydrogen production[26].

Accounting for fugitive emissions is important when comparing hydrogen supply chains. Hydrogen should only be promoted for use within the shipping sector if there is a clear and viable pathway for production that is significantly lower in the near term in terms of GHG emissions. This should primarily include hydrogen production via electrolysis, on a large scale, using renewable electricity sources such as offshore wind (known as green hydrogen).

3.3              Biofuel feedstocks.

Biofuel production and use on board ships should only be promoted when there is a guarantee that the feedstocks used can be sustainably sourced, and that the supply chain offers a significant reduction in GHG emissions. This includes accounting, not just for carbon emissions, but also for ecological impacts such as eutrophication, as well as land use[27].

Consideration should always be given to how first-generation biofuel feedstock production (such as rapeseed and other food crops) can potentially contribute to food scarcity. The sensitivity of the impacts of agriculture on the environment should always be considered and minimised. Therefore, biofuel feedstock supply chains should be scrutinised and analysed from a life cycle perspective to ensure that there are no adverse environmental impacts to their production[28].  

3.4              Infrastructure associated with alternative fuels.

New, refurbished or refit infrastructure will be required to produce, transport and store alternative fuels. It is necessary to analyse the effects of these infrastructures from environmental, socio-economic and technical perspectives.

Case-by-case sustainability analysis (including carbon footprints) should be implemented on whether current infrastructure (including the ships themselves) could either be adapted, or have to be demolished and built new. In the case that the current infrastructure is not functional for the new purposes, effective deconstruction, to allow the reuse of materials and components recovered from other infrastructures, should be prioritised over demolition. Similarly, circular economy strategies should be considered for these infrastructures, like off-site construction (e.g. prefabrication of complete modules and individual component assemblies), materials optimisation (e.g. less amount and diversity of materials), maintenance and adaptability for future use and avoidance of the use of materials that prevent future recycling. All these actions also produce impacts (and emissions) and therefore, each case has to be analysed in detail to avoid potential trade-offs or rebound effects. 

3.5              Alternative fuels lifecycle assessment: conclusion

The UK should be innovative and progressive when considering carbon goals for shipping and therefore aim to achieve much more than just the IMO’s current legislation[29]. Although non-fuel based measures will be needed to cut GHG emissions in the short term[30], GHG cuts will require the significant uptake of alternative fuels in the long term. However, it is essential that assessments of the viability of these fuels are understood from a full life cycle perspective. Without considering the upstream impacts from fuel production, storage, and transportation, the total greenhouse gas emission reduction that alternative fuels can achieve will likely be overestimated which is a significant risk for climate change impacts.

The potency of methane as a greenhouse gas should also be accounted for, and its short term impacts on the climate should not be downplayed. Considering the scale of the shipping industry, methane leakage from both LNG tankers and hydrogen production has the potential to cause a significant, and irreversible contribution to global warming. This must be accounted for when analysing future fuels, and their supply chains.

When considering infrastructure requirements, a circular economy approach is integral to ensure that the shipping industry’s transition to zero CO2 emissions is sustainable, and ships’ end of life stages should also be considered during design to be in line with climate goals.

Finally, tools such as life cycle assessment should be utilised regularly to guarantee reliability in supply chains, and to ensure that alternative provide indisputable GHG savings.

4)    Policy appraisal: Carbon prices

The modelling underpinning the CMP sets out Marginal Abatement Cost Curves for measures to cut shipping emissions, using the standard values from BEIS for carbon in policy appraisal. This modelling shows that 38% of business-as-usual emissions could be abated at less than £88t/CO2e, the BEIS price for 2031. However, in September 2021 BEIS introduced a major revision of this policy[31], to align carbon valuation with the new net zero targets enshrined in the Climate Change Act. These              new values are broadly triple the old values. The new values of £285/tCO2 in 2031 imply that abatement of over 90% of what they call ‘business as usual’ emissions is justified[32]. The CMP refresh should update modelling to at least reflect the new carbon price values, or more ideally be reassessed in line with Paris Agreement Goals.

5)    Policy support

Decarbonisation measures in shipping suffer from a major competitiveness distortion, because marine fuel oils globally do not pay the vast majority of the costs their pollution imposes on society and economies. Progress to address this at IMO level is extremely slow, and still stalled, with even a proposal for an extremely low $2 a tonne of fuel levy to fund R&D unable to pass through the IMO last year. In this context, national policies are essential to support deployment of decarbonisation. However, despite the CMP’s guiding principles to “move quickly” and “be bold”, in the three years since the CMP, practical UK policies to help shipping and ports decarbonise have been slow to materialise:

• Shore power is acknowledged as an option the UK should pursue, but it was only in February 2022 – three years on – that consultation on possible policy support has been issued. Barriers to UK shore-power deployment and solutions to them are set out in Tyndall Research[33]. In this, the pivotal policy to enable deployment is central Government funding support - something necessary in every shore-project worldwide. However, this policy option is conspicuously absent from the February 2022 consultation. The Tyndall research suggests that alongside grant funding, the Government should act to reduce the taxes on shore power electricity, as occurs in other European countries, to enable it compete more fairly with less taxed marine fuel oils. This could be complemented by regulation to mandate shore power installation by ports and ships, as has been recently proposed by the EU in its Fit-for-55 package[34].
• Economic instruments for maritime sector decarbonisation were identified as necessary in CMP, but despite being flagged in 2019 and twice in 2021 that these would be considered, this has not yet appeared.
• There has been a consultation on extending the Renewable Transport Fuel Obligation to alternative fuels such as ammonia and hydrogen for the domestic maritime sector. Electricity was explicitly excluded from this, with the consultation stating that measures to support electricity would be included in a future consultation[35].
• The Clean Maritime Demonstration Competition allocated £23m to innovative shipping projects and was heavily oversubscribed. These projects are nearing completion, the Government has said the CMDC will be extended. On March 10th, the Government announced £206m funding for research into clean maritime technology, and the very welcome establishment of a unit to coordinate action on maritime decarbonisation, UK SHORE[36]. However, the sums involved are small in comparison with those available for transport infrastructure and decarbonisation funding in other transport modes – for example the £1600 million for vehicle charging networks[37], including the £950 million Rapid Charging Fund for EV charging infrastructure in motorway and A road service areas[38].
• The EU is proposing to include maritime emissions in the EUETS from 2024. The UK version of the EUETS does not include maritime emissions: this should be corrected to ensure greater alignment of the two systems, and better alignment of the UK ETS with broader UK maritime decarbonisation strategy. At the time of writing, the UK has just issued a consultation on including domestic maritime emissions within the UK ETS[39] – this is very welcome; our initial view is this should be extended to include the UK’s share of international shipping emissions, mirroring the proposed approach for EUETS. The EUETS proposal covers 100% of emissions for intra-EU voyages, and 50% of emissions for voyages beginning or ending at EU ports.

6)    Climate Change and Air Quality: Port Air Quality Strategies

In 2019 the Government issued guidance for Ports to produce Port Air Quality Strategies (PAQS), but despite many ports submitting draft plans to the Department for Transport, there has been little movement from Government since. The CMP refresh offers the chance for integration of measures in ports to tackle both air quality and greenhouse gas emissions, and the Department for Transport should update the PAQS to make these mandatory, and also provide policy and capital support for port infrastructure investment, such as shore power. Research for Aberdeen Harbour Board highlights that CO2 emissions from ships at berth are over 100 times higher than from land-side electricity use in the port[40]. Consequently, measures to cut fuel use by ships in port should be seen as a priority for ports’ actions on climate change mitigation, and would also cut local air pollution.

7)    Wind-assist’s potential has been under-estimated, and it should receive greater support

Wind propulsion technologies are available to install on new and existing ships today, which positions the technology as a solution that can provide important emission reductions in the short-term to tackle cumulative shipping emissions. In contrast to some other studies, new Tyndall research demonstrates up to 24% carbon reductions in a year by employing a wind propulsion system on routes with beneficial wind[41]. The research highlights that some routes linked with the UK are particularly suitable, such as those in the North Atlantic Ocean[42] and North Sea[43]. The UK is thus ideally situated to be an early adopter and future global leader of this innovative emerging technology.

The IMO’s Fourth Greenhouse Gas Study[44] calculates carbon savings of only 0.8% from wind across the global fleet, which is the kind of figure more typically used to dismiss wind propulsion as a realistic proposition to decarbonise shipping. However, Tyndall’s new research shows that integrating wind propulsion with weather routing can cut CO2 by over 17% for Panamax bulk carrier ships even when averaged over a range of geographically dispersed routes[45]. This challenges the existing assumption that wind propulsion has limited potential. This is especially true for sectors of the fleet – such as bulk carriers – that are well-suited for the technology. However, investing in kites could also be particularly beneficial for UK shipping, as they offer a wind solution for ships with relatively small amounts of available deck space, such as for offshore vessels.

Financial incentives would encourage the development of innovative demonstration projects for wind technology systems in the UK, particularly for small and medium enterprises (SMEs) of which there are many within the shipping sector. Moreover, providing innovative funding structures to early-stage sail developments, such as multi-stage funding programmes (e.g.[46]) which concentrate up to 100% funding to the most promising emerging solutions, is an important route for the UK to pursue. For example, sail developer Norsepower exemplify the case for early-stage funding; they received 100% funding from the Finnish government to develop a Flettner rotor and are now the leading sail providers in the industry. Other promising sail types, such as wing sails and kites, are currently in earlier development phases so developers can struggle to secure funding to develop a test rig given private sector investors are typically reluctant to invest in early stage, risky or expensive technologies. This delays the development of this important technology opportunity with its realistic potential to make significant cuts in CO2 in in the near term. Wind propulsion systems would therefore benefit from funding mechanisms that provide a substantial faction of the total funding requirements to advance and demonstrate the capabilities of these emerging solutions.

The UK government needs to support investment in wind propulsion technology systems to support and develop emerging UK companies in this promising new sector. Moreover, Maritime 2050 must place a much greater focus on understanding the potential for this technology to cut CO2, particularly given the need to deliver at least a third of the CO2 reductions necessary by 2030.

March 2022

Endnotes