ANALYSIS of the IMO’s net zero policy plans feels far more 2023 than 2026. But it’s still worth doing, because of what could happen in 2027 and the years that follow.

The Maersk Mc-Kinney Moller Center for Zero Carbon Shipping estimates that the Net-Zero Framework could reduce emissions by 35%-55% by 2040, by which year transport costs would be about 20% higher.

The most talked-about alternative plan on the table — the Panama-Liberia-Argentina “market-driven” fuel standard — would reduce emissions by about 1% a year to 2050, since in practice the only fuels allowed would be diesel and LNG.

The green debate at IMO is really a debate about the future of LNG.

Countries that sell a lot of fossil fuels oppose taxing them, as do shipowners with big investments in transporting frozen gas.

The countries that want the NZF adopted (and there are more of them than you think) tend to be those with green industries that would benefit, or cash-strapped countries particularly vulnerable to climate change.

But the other thing to keep in mind is energy independence.

The world’s reliance on a single, war-torn part of the world for most of its oil and gas comes at a cost, as consumers are finding out.

That will create emergency demand for US LNG but also increase countries’ desire to lessen their dependence on fossil fuels in the long run.

Green energy is easy to ignore when it’s far too expensive compared with dirtier energy. But a protracted oil shock, and more climate disasters, could put these ideas back in play.

Declan Bush
Senior reporter, Lloyd’s List

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