THE difficult part of change is the doing of it.

A flurry of climate targets and trajectories pumped out of the shipping industry in recent years were hard-won exercises in collective agenda-setting, but the industry has been struggling with the longer and more arduous task of turning aspiration into action.  

No amount of ambition can disguise the inconvenient truth that the shipping industry is not currently on a trajectory to meet the net-zero targets aligned with the 1.5°C climate goal set out in the Paris Agreement.

And the macroeconomic climate is not helping the environmental one. 

The likelihood of an imminent global recession tipped over from possible to probable this week, at least in the eyes of World Bank economists. An extended war in Europe, an energy and food supply crisis and spiralling inflation leading to demand destruction do not set a conducive tone for the multi-trillion dollar, generational investments required to deliver a zero-emissions industry. 

That is not to suggest that progress to date has not been made — it has.

Zero-carbon fuels will not start to emerge until at least 2026 and even then in small pilot projects, but the engine designs and ship specifications are already being touted by yards in Asia. 

Such statements inevitably belie the scale of the tasks ahead, not least in terms of safety standards and guarantees regarding a highly toxic and explosive mix of options. But the industry is at least now getting comfortable with the core range of fuel pathways open to them that could ultimately make up a multi-fuel future.

The technical readiness of the industry must now be matched by fuel supply, regulatory clarity and the thorny issue of who pays for the cost differential in the zero-carbon energy transition. 

Putting a price on carbon remains something of a political wild card, but the political balance inside the International Maritime Organization is evolving to the point that a breakthrough on market-based measures is feasible within the next year. 

The expectations of COP26 to supercharge political ambition may have fizzled out before reaching the IMO, but the political balance now comes down to a group of swing state governments that no longer represent the insurmountable barrier to progress they once did. 

Progress is back on the table for negotiation and, put simply, a global market-based measure for shipping is more likely than it was even 12 months ago.

So why the cause for concern?

Well, decarbonisation of shipping rests on the availability of zero-carbon fuel at sufficient scale to allow 5% of the fleet to be running on it by 2030. That is a tall order and while possible, is not probable largely because financial risks have hampered the best of intentions. 

When Trafigura backed a €20m ($19.5m) hydrogen feed study back in August 2020, it did so without understanding whether there would be a market.

For the next phase of the project, the banks are going to have to stump up €600-€800m. This is simply not going to happen without an underlying cashflow and an offtake agreement. 

So far, nobody in shipping seems willing to take the excessive risk of a fuel that will, in all likelihood, be at least two to three times the price of current fossil fuels without understanding if there is a market.

Without regulatory clarity, that hydrogen is more likely to end up fuelling heavy duty trucks than it is ships. And therein lies the challenge of a green fuel supply for shipping. 

Shipping is not decarbonising in isolation and there are other sectors equally aspirational and arguably more ready to fight for the same supply of zero-carbon fuel. 

Decarbonising shipping is no longer a shipping problem. It never has been. It is a process by which the shipping industry integrates itself into the global value chain and starts realising that it cannot achieve progress in silos. 

Amid the cacophony of UN climate week interventions heard this week, the most significant advancement came from the banks that make up the Poseidon Principles upgrading shipping emission reduction targets to net-zero by 2050. 

Granted, no shipping company has yet gone to the wall for want of green finance, but it is an inevitability that it will happen given the tightening noose of environmental, social, and governance-linked capital. This is not a shipping specific problem, but it does present a problem for shipping.

The scope-three disclosures, which cover the entire value chain of a business from the extraction of its raw materials through to its suppliers and on to its end users, are driving change, whether the shipping industry makes progress or not. 

The progressive wing of the industry — in the thick of the UN events this week in New York and Pittsburgh — is seeking political alliances and finance solutions. It is more interested in talking development funding than fuel density.

But it remains to be seen whether the rest of the industry is prepared to follow them outside of the familiar, but too often myopic and insular confines of shipping’s fragmented technical approach to problem solving.

The solutions to zero-carbon shipping, and the answer to why the industry is struggling to find pace and scale in its aspirational targets, do not lie in talking to the shipping industry. It is time to stop talking about shipping’s decarbonisation problem and start engaging in a global energy transition.