Shipping industry aims to reach net zero by 2050
Over 90 percent of world trade is carried across the world’s oceans by an estimated 90,000 marine vessels. The shipping industry is responsible for a significant proportion of the global climate problem although a lot of industrialists, consumers, and fashion brands don’t pay heed to this issue. The shipping industry contributes 3% Green House Gas annually across the globe. If it were a country, it would be considered the sixth largest emitter, according to (europe.oceana.org).
Retailers ship huge volumes of clothes from production centers in countries such as China, Vietnam, and Bangladesh to consumers around the world, causing carbon dioxide emissions. The shipment of huge textile product containers in these marine ships has caught the attention of retailers and consumers recently. Overall, the textile industry is estimated to be responsible for between 2% and 8% of global greenhouse gas emissions, according to a United Nations Environment Programme “one planet” report published last month.
The bigger picture is that the shipping industry is going towards net zero by the year 2050 according to the latest data and agreements toward a sustainable future.
According to both the Paris Agreement and the maritime organization’s GHG strategy, the “Getting to Zero Coalition”- a group founded by the Global Maritime Forum and the World Economic Forum – has launched A Strategy for the Transition to Zero-Emission Shipping, an analysis prepared by University Maritime Advisory Services (UMAS). The transition strategy examines how policymaking at the national, regional, and global levels affects the transition to net-zero shipping. The GHG strategy actually unites all 175 member states in a common objective for ensuring a just transition to a 20-30% reduction in shipping emissions by 2030, progressing to a 70-80% reduction by 2040.
The shipping industry must achieve its 2030 breakthrough objective of having scaleable zero-emission fuels makeup 5% of the worldwide shipping fuel mix in order to adhere to the Paris Agreement’s 1.5 degrees Celsius target.
Global disruptions and challenges of green shipping
Due to the urgency of the industry to become decarbonized and net-zero carbon emission sector, some issues and challenges must be mitigated as soon as possible. There are a lot of political, environmental, economic, investment decisions, partnership, etc factors involved in the common objective and a plethora of challenges in the shipping industry right now.
In a BCG survey of 125 companies that rely on shipping, 71% of respondents said they would pay a premium for carbon-neutral shipping, and 63% of respondents expected they would be more willing to pay a premium within the next five years. But at least a premium of 10% to 15% over current rates would be needed to fund the industry’s transition to net-zero emissions by 2050.
Shipping companies face a highly uncertain regulatory environment. Despite the rules sanctioned by IMO, shipping companies need to go through several laws including fuel consumption, vessel improvements, EU ports, etc factors. The time consumption between the passing of several laws is hindering the pathways for net zero initiative.
According to GFMA, An estimated $2.4 trillion dollars will be needed for shipping to achieve net-zero emissions by 2050. The technological costs, investments, initiatives, and alternative fuel costs are a drastic situation to be considered. This huge amount of money is being transaction through several years of financial channels. The financing issue is still a fundamental issue regarding the net zero initiative.
According to the IMO, two levers—operational- and technological-efficiency improvements—have lowered carbon emissions per transported unit by 20% to 30% since 2008 and could cut them by a further 20% to 25% by 2050. These operational and technological needs can be fulfilled by the application of onshore computer systems and digital technologies, including machine learning and internet-connected sensors. Skilled labor forces are needed for this sophisticated program handling.
Benefits of Fashion industry by implementation of net zero shipping
The fashion industry could benefit from the net-zero initiative of shipping industry with the improved sustainability focus in the supply chain network. The improvised shipment logistics support can generally improve the overall apparel and textile network of huge orders and access to different continents.
For fashion firms, switching to more environmentally friendly shipping techniques could initially mean higher transportation expenses. These costs may be passed on to customers, which might result in increased fashion product retail pricing. The overall marketing towards go green initiative can help build customer reputation.
The fashion industry would likely collaborate more closely with shipping companies to develop new eco-friendly logistics solutions. These solutions can try to decrease cost of containers and other miscellaneous costs from shipping. The beneficial sustenance of both fashion and shipping industries can easily transition towards a better future. The fashion industry’s efforts toward net-zero shipping could raise consumer awareness about the environmental impact of fast fashion. As fast fashion is a scar on the face of the environment, radical change is necessary for the upcoming future.
The second-largest fashion retailer in the world, H&M, stated in 2022 that it had acquired eco-fuel for a “significant share” of its ocean transportation over the previous two years. By 2040, it intends to achieve “climate positive” status. Major retailers like Amazon and IKEA have promised to ship exclusively with zero-carbon fuel by 2040.
The problematic rules and regulations which are pending for years must be mitigated for the timely impact of green initiatives. Thus, compliance with fashion industry can be a strategic way forward. Fashion supply chain should be more compliant with green laws and rules about green shipping by 2050 for creating a balance. Thus, local and international brands will be privileged to adopt a sustainable approach to their fashion and accessories.
Strategic way of getting net zero initiative in shipping:
Current policy and industry actions are insufficient to support the shipping industry’s transition Policy makers need to assess the urgency of the situation for the greater good. Shipping companies must adapt quickly to certain measures and strategies for tackling the decarbonization system. The need to further optimize the logistic chain and its planning, including ports, is also identified as a short-term measure, alternative low-carbon and zero-carbon fuels, and innovative technologies to further enhance the energy efficiency of ships for greener shipping.
It is clear that the global introduction of alternative fuels and/or energy sources for international shipping will be integral to achieving the overall ambitions of IMO’s initial strategy for reducing GHG emissions from international shipping. There is room for all options to be considered, including electric and hybrid power, hydrogen, and other fuel types. Alternative fuels are essential for the industry to reach net zero by 2050. Major structural changes will be required to enable their adoption. Indeed, commercially viable zero-emission vessels must start entering the global fleet by 2030 to hit the net-zero goal.
Forming or joining alliances that will have a tangible effect on companies’ decarbonization efforts. Shipping firms should engage in cooperative R&D collaborations with shipyards and other ecosystem participants for the upbringing of long-term applications. They may exchange ideas and gain from increased size and improved resource management. Different managerial approaches can be gathered by the effective implementation of these strategies.
Companies should invest in solutions that improve maintenance and prolong asset life by analyzing data from ship-based sensors. They should also consider creating digital twins, which enable faster, better decisions by replicating equipment in a virtual environment. Collaborations between shipping companies along the value chain can open new pools of financing by demonstrating a broad sector-wide commitment and signaling to investors. These financial assets can bring change more susceptible to the fashion industry.
By being open about their decarbonization efforts, companies can encourage consumers to view their business as a safe environmental choice. Better transparency will also help players differentiate themselves from rivals. Thus, more profits can be gained from either end of the spectrum. With AI, it becomes possible to harness accurate and disaggregated emissions calculations and predictions. This would allow the industry to go beyond historical annual averages, or even emissions by company or individual ship per year.
Businesses that take the initiative today will benefit from several real benefits. Players may benefit from the enhanced brand impression, better customer acquisition and retention, and increased financing prospects by committing to net zero and taking proactive actions to achieve this aim. Additionally, by acting now, companies may encourage the development of practical solutions and assist shape laws in the next years, giving them a competitive edge over rivals.
Download Our Free Magazine
Get Industry Insights, Trends & Latest Innovations in the Textile & Apparel Industry
