In December 2019, Icebreaker One was presented at COP25 in Madrid. In the four years since then, we’ve undertaken projects spanning the fields of energy, finance and water, maintaining one common and integral thread, that the discovery, access and use of data can markedly accelerate our journey to net zero.
Now, in the lead-up to COP28, with a climate emergency on our hands, we want to reinforce this common thread, highlighting why our work is more pertinent than it has ever been. In order to achieve this, we’ll be revisiting past use cases. These demonstrate our action-led work, showing the potential impact better access to data can have, and its critical role in keeping us within the boundaries of the Paris Agreement.
Shipping & Net Zero
Shipping plays a crucial role in the world’s economy, with 80% of the world’s merchandise trade transported by sea. However, the shipping industry was responsible for emitting 1.07 billion tonnes of CO2 in 2020, according to The International Maritime Organization (IMO), with this figure projected to surge by 130% by 2050.
Navigating the murky waters of decarbonisation in the shipping industry has proven difficult. Not least because shipping was omitted from the Paris agreement in 2015, due to the difficulty in regulating ships, which were often owned by one country but registered with another. Following this, in 2018, the industry agreed to cut carbon in half by 2050 but these targets faced widespread criticism. Since then the IMO has revised its goal to net-zero emissions by or around 2050, as well as committing to an uptake of alternative zero or near-zero GHG fuels by 2030. Sadly, the vague language and absence of concrete targets indicate an uncertain future for the industry.
Icebreaker One’s role
In partnership with Lloyds Register, Icebreaker One undertook a project aimed at giving initiators and investors an understanding of how data sharing and risk model changes can expedite zero-emission ship financing. Not only did Icebreaker One uncover a severe lack of open data during this research period but we also uncovered a significant level of uncertainty in regard to local government policies. Namely, information of future green fuels and a lack of visibility on available funding.
Sheree Hellier, Lead researcher on the project states: ‘We interviewed a number of industry stakeholders to uncover what they perceive as the main challenges and opportunities for the decarbonisation of shipping. From a legacy-driven, fragmented industry to a lack of data sharing and transparency, the challenges are widespread. We explored how better access to data could drive investment in net zero shipping. Increased collaboration and transparency between major ship owners, particularly in regards to innovation and data sharing, underpinned our recommendations’.
Data to decarbonise
The potential benefits of enhanced data can be found, first of all, within vessel supply chains. Parallels can be drawn with the built environment, where adopting a whole lifecycle view of the asset or in this case, a vessel, can prove instrumental. It does, however, require a deep understanding of the shipping industry’s complex supply chain, comprising numerous stakeholders, geographical locations and logistical challenges. But, better access to data could enable end-to-end visibility of the supply chain, meaning stakeholders are better able to track cargo, creating market efficiencies. This improved transparency also has the potential to build trust amongst consumers.
Another potential avenue where data can accelerate decarbonisation in shipping is through Port grid connections. These aid the reduction of emissions while the ship is at berth, as well as providing power to those ships with batteries. With better, real-time data on vessel arrivals, departures and congestion, Port operators can optimise how they allocate power resources. Equally, shippers can plan their routes to be more energy efficient. Despite this, Icebreaker One discovered two key areas of contention with Port grid connections. The first being the disparity in infrastructure across Ports, with some lacking the funding and investment needed to provide the appropriate grid connection for vessels. The second issue is that some of the energy supplied by the grid is still derived from fossil fuels, undermining emission reduction efforts.
We have identified a lack of granular, real-time data as a common issue in many of the projects we work on. But, in the context of shipping, improvement in the granularity of data and more consistent metrics would enable stakeholders to fully assess their emissions and more accurately report their environmental performance, ensuring alignment with reporting frameworks. For example, under the IMO’s new certification scheme, all ships need to report energy efficiency and carbon intensity data, with ratings to be issued in 2024. For shipping companies, having the granular data to prove their commitment to decarbonisation may allow them to access debt instruments at preferential rates such as sustainability-linked loans.
Developments
The lack of hard targets poses a real problem for the decarbonisation of the shipping industry, especially given the United Nations recently pitting the potential investment required to do so at $100 billion. What’s more, the industry is not accustomed to sharing data, in particular, not with the end consumer. Shipping companies often retain data internally due to the need for frequent negotiation of commercial contracts and the sensitivity of such information.
Yet, the Energy Efficiency Existing Ship Index (EEXI) regulations (which will require ships to report on their energy efficiency from 2025) may serve as a catalyst. Enhanced data granularity holds the potential for shipping companies to prepare for impending regulations and align with net-zero goals, even if it requires a cultural shift in data sharing practices.
As we head toward COP28, the role of data in the shipping industry’s decarbonisation efforts remains more critical than ever. Data illuminates the path, providing transparency, accountability, and spurring innovation, vital components in our shared mission to combat climate change and reach net-zero.