There is an inconvenient truth for shipping as it gears up for COP26, the major international climate summit starting on Sunday in Glasgow. For the first time since the global financial crisis 13 years ago, shipping’s carbon intensity in 2021 is set to increase, an embarrassing turnaround in green fortunes at a time where regulators are looking more closely at the industry’s greenhouse gas emissions than ever before. Likewise, carbon dioxide emissions are on track for their greatest increase since the collapse of Lehman Brothers. The extraordinary trading conditions for many sectors in shipping in 2021 have seen ships speed up, as well as a huge portion of the fleet forced to idle off congested ports. These twin factors – speed and congestion – have seen emissions rise as well as carbon intensity increase.

Analysts remain divided on just how much emissions have risen year-on-year with Clarksons reckoning that CO2 emissions for the shipping industry will increase 5% in 2021 to reach 855m tons, accounting for 2.4% of global emissions. Even when compared to pre-pandemic 2019 levels, shipping is still on track to register a 1.5% increase in emissions this year, Clarksons data predicts. Mike Konstantinidis, CEO of Greek firm METIS, which runs an annual efficiency ratio (AER) index, has put the emissions growth figure far higher for the full year, likely hitting 15%. As well as the higher speeds, higher freight rates this year have seen many drydocking’s postponed causing unmaintained engines to consume more fuel, Konstantinidis pointed out.

Reacting to the increased emissions news, Faïg Abbasov, shipping program director at NGO Transport & Environment, said that shipping’s increased carbon footprint this year underlined the necessity for governments to focus far more on the industry. “Despite making record profits this year, shipping continues to use the dirtiest fuels and is on course to overshoot the Paris Agreement target by miles,” Abbasov said, adding: “Governments across the world can start tackling this climate menace by including shipping in their national climate targets.” Governments should deploy measures like carbon pricing and fuel mandates to speed up the transition to clean fuels like hydrogen and ammonia, Abbasov urged just days ahead of COP26. “With shipping companies making a killing, now is the time to make them pay to clean up their act,” the environmental campaigner demanded.

The record number of ships idling at gateway ports such as Los Angeles, Shanghai, or Hamburg this year is also widely expected to see an increase in emissions for communities living near major ports. Dr Tristan Smith from UCL Energy Institute, one of the world’s best-known academics looking at shipping and greenhouse gases (GHGs), told Splash Extra that the key to mitigating emissions during market gyrations seems to be logistics and operations management. “The last 12 months have shown how inflexible a lot of systems are and how lacking in resilience supply chains are and how unable they are to deal with small perturbations,” Smith said, comparing the congestion created to a positive feedback mechanism – it takes fleet out of productive service incentivizing those sailing to do so at higher speeds which then only add to the ships queuing up around ports. “If there was ever a time for modernization, digitalization and getting high quality, transparent and functional data access across the supply chain, surely it’s now. The interconnection with GHG is clear,” Smith said.

Kristinn Aspelund, co-founder and CEO at Ankeri, an Icelandic cloud platform determined to give the shipping community the data necessary to make sustainable transport decisions, concurred with Smith on how best to battle big market swings in the short-term. “We should not expect silver bullets but rather try to be better prepared,” Aspelund said, urging owners and charterers to build their business intelligence, automate workflows and become data driven. Former RightShip boss Martin Crawford-Brunt, who has this year debuted shipping sustainability advisory Lookout Marine, said that short-term carbon emissions in shipping can be mitigated through a better understanding of the actual vessel emissions, based on a completed round voyage; the loading, discharge, and any ballast legs to reach the load port. “When the actual emissions per round voyage – or a reliable and consistent estimate – is presented on the basis of the actual transport work done, not only the absolute emissions or based on unvalidated theory, the supply chain will be in a much better position to assess whether a more carbon efficient alternative exists for the carriage of the same cargo,” Crawford-Brunt maintained, suggesting the International Maritime Organization’s Energy Efficiency Operational Index (EEOI) is the best tool to achieve this.

COP26 starts on Sunday with shipping determined to be on the front foot as regulators around the world deliberate how best to slash shipping’s emissions. Determined to get its side of the story heard, the International Chamber of Shipping (ICS), a shipowning lobby group, is putting on a high-level green shipping conference next week in Glasgow. Reacting to the news that shipping emissions are up this year, an ICS spokesperson told Splash Extra: “To some extent, this is a natural consequence of the massively increased demand on shipping following the disruption of Covid-19.” The ICS spokesperson stressed shipping is committed to reach net zero carbon emissions by 2050.