COP28 side event - The 2023 IMO GHG Strategy: Defining the global level-playing-field for shipping decarbonization
09 December 2023
Your excellencies,
Colleagues from the International Maritime Organization and the International Renewable Energy Agency,
Ladies and gentlemen,
Dear friends,
Our maritime transport system is the lifeblood of the global economy, facilitating over 80 per cent of the world's trade volume.
Yet, this vital sector also contributes to nearly 3 per cent of global greenhouse gas emissions.
As sea-borne trade has grown, emissions have escalated by 20 per cent in just the past decade, a trajectory we simply cannot afford to continue.
Our message today, here at the COP, is very clear: bold, global action is necessary to decarbonize shipping.
However, to do this effectively, we must engage with all stakeholders in the shipping industry, to ensure that decarbonization is just, fair, and equitable.
We know, decarbonization will not be cheap.
Our Review of Maritime Transport 2023 echoes previous estimates that up to $28 billion will be required annually to decarbonize ships by 2050, and a staggering $90 billion per year will be needed for infrastructure development of carbon-neutral fuels by the same deadline.
Put simply, if decarbonization efforts are not accompanied by economic growth, sound multilateral regulation, and technological innovation, there is a risk that it will leave behind in the short-term exactly those countries that it stands to help the most in the long-term.
To better align with GHG emission reduction targets – set by IMO – the shipping industry also requires certainty and clear economic incentives to decarbonize.
Ship owners are facing a dilemma.
Either renew the fleet now while lacking clarity about future rules, fuels, and technologies, or wait until the alternative fuel pathway and regulations are clearer.
The good news is that despite the infancy of this transition – with 99 per cent of the global fleet still reliant on conventional fuels – there is hope.
21 per cent of new vessels on order are designed for alternative fuels, setting the stage for a new era.
This underscores the importance of system-wide collaboration, swift regulatory interventions, and robust investments in green technologies and fleets to make this transition work.
This underlines a basic truth: Shipping cannot decarbonize on its own. It requires action across the entire ecosystem, involving shipping and the energy sector.
Ports will need invest heavily in port cargo handling equipment, storage facilities and replace or construct new terminals.
Similarly, boat and port crews will need upskilling to handle ships running on alternative fuels and green onboard ship technologies.
There is a potential for developing countries to tap the renewable energy resources and contribute to the future fuel market.
Our technical assistance project on Sustainable Smart Ports - piloting the case for countries of Mauritius, Morrocco, and Ghana – will produce a methodology that will help ports accelerate their transition efforts in a way that is win-win for all parties involved.
At the same, UNCTAD is bringing to the COP a very important call for a universal regulatory framework applicable to all ships, regardless of their flags or ownership.
Economic incentives, such as levies or contributions tied to emissions, can accelerate this transition by making alternative fuels more competitive, and using the funds to invest and ensure that transport costs do not harm the most vulnerable economies.
We hope that conversations like these can garner momentum in this very important mission.
In closing, allow me to thank once more our partners at the IMO and IRENA, who are our greatest allies in this collective effort.
Your excellencies,
The cost of inaction is very high.
We do not have the luxury of time. The maritime industry is at a crossroads, and we cannot afford to hesitate.
Thank you.
