Decarbonization has become a global imperative and a priority for governments, companies and society at large. This paper brings together stakeholder perspectives, new insights and research on the progress on decarbonization in the shipping sector in an updated report, All Hands on Deck 2.0. This report helps provide a ‘temperature check’ across the sector on progress since the first report was published in 2020, and augments the 12 original solutions with near-term actions that can accelerate decarbonization.
Decarbonization requires transformational change across the sector, leadership, and the involvement of multiple stakeholders. Although change is happening, and the focus on decarbonization has increased across governments, companies and society at large, there is growing consensus that more should be done across sectors to reach net-zero by 2050. The shipping sector has a unique role to play as the backbone of global trade, it is not only a sector that shoulddecarbonize, but is also an enabler of global decarbonization through the transportation of low-carbon fuels.
A push toward action
The first report on decarbonizing shipping, All Hands on Deck, published in 2020, revealed the barriers to, and readiness factors for, decarbonization. It highlighted 12 solutions toward decarbonization by 2030 and offered a longer-term view on other changes that may be required. This updated report, All Hands on Deck 2.0, helps serve as a refresher or “temperature check” across the sector, to assess the prevailing views, sentiments, and concerns in the industry. It helps provide a high-level overview of progress since the publication of the first report, and adopts a nearer-term view, to emphasize a selection of specific, more immediate actions that should enhance the solutions originally identified, what should happen right now, and who should do it.
To develop this update, Deloitte Netherlands and Deloitte UK re-engaged more than 25 leaders across segments of the shipping sector to share their perspectives on the decarbonization challenge. This update also draws on research and analysis that gives depth to the perspectives shared.
Shipping’s progress in decarbonization
Despite the complexity of decarbonization in shipping, some pockets of progress have been seen in the past two to three years since the launch of the first report. Market and customer demand for alternative fuels has grown in some shipping segments, with most signs of voluntary demand coming from the customer-facing (B2C) container segment, where the potential to exact a “green premium” from cargo owners is greatest. Regulatory incentives have become more concrete, for example through two IMO-led measures for design and efficiency: the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Index (CII), both of which became effective on 1 January 2023. Technology alignment has improved, as the growing maturity of alternative fuel technologies, and clarity on their development timescales, are starting to drive greater clarity on the likely set of dominant fuel pathways for different deep-sea segments. Finally, there is positive movement on asset replacement as demand for vessels that are capable of using lower-carbon alternative fuels such as liquefied natural gas (LNG) and methanol has increased significantly in the past two years.
These results are encouraging, but not yet at sufficient scale. The magnitude of action and investment should step up with speed if the shipping sector is to make meaningful progress toward the ambition articulated by many countries and companies across the globe to achieve net-zero by 2050. All Hands on Deck 2.0 highlights six critical recommendations that complement the 12 solutions originally proposed. These solutions are:
1Book-and-claim is a chain of custody model that allows the administrative flows and claims about aproduct to be separated from the physical flows of the material, enhancing the transparency ofspecific claims regarding materials or products and thereby supporting the reliability of theseclaims.
To learn more download the All Hands on Deck 2.0 report.
“The progress on building coalitions and stakeholder groups across the sector that have been seen since the first report reinforces the fact that decarbonization of shipping requires collaboration across industry stakeholders. While the progress is a cause for optimism, the research and insights show there is still more to be done, with urgency, to scale up early solutions if the sector is to meet its aspirations. The additional solutions in All Hands on Deck 2.0 focus on more concrete, near-term actions the shipping industry can address without delay.”
— Wendy Rudder, Partner, Deloitte Netherlands