Can Philanthropy Help Decarbonize the Maritime Shipping Industry?

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In the race to reduce the world’s carbon emissions and their negative impacts on the planet, a new report pitches an unlikely industry as the next philanthropic frontier for decarbonization opportunities: maritime shipping.

The heavily fossil-fuel-reliant industry reaches every corner of the earth, representing almost 90% of global trade. Lumber. Microwave ovens. Volvos. These products — and millions more — commonly ship around the globe to end users via ocean-going vessels.

Even though the maritime shipping industry accounts for almost 3% of global emissions, it has been largely overlooked as a climate solution or as a philanthropic endeavor. The new report by the Aspen Institute and the Global Maritime Forum comes at a time when funding for climate mitigation is surging, after decades of middling philanthropic interest. Extreme weather events, a more powerful climate movement and more uber-wealthy philanthropists — some relatively young and more acutely aware of the crisis — have made climate change a top-tier cause in the sector.

But it can still be a tough issue to navigate, and the report seeks to point new and old donors alike to a perhaps unexpected giving strategy. At first glance, maritime shipping may seem too vast and complex to decarbonize or for funders to make an impact. But the report argues that a few unique industry features make it a strong candidate for greater philanthropic investment.

First, while the sector is vast, its regulation is not. The International Maritime Organization (IMO), an organization of the United Nations, regulates the entire industry globally. The benefit of this single lever was one of the realizations that motivated the ClimateWorks Foundation to deepen its commitment to decarbonizing the sector in the aftermath of the Paris Agreement. They saw maritime shipping decarbonization as a logical expansion of their work toward green energy and curbing super pollutants.

“In some ways, maritime shipping isn’t that hard to decarbonize,” said Jason Anderson, ClimateWorks’ program director, governance & diplomacy and super pollutants. “Industries like cement and steel don’t have a global regulator, so the IMO gives you a place to have these conversations and a focal point.” Even though progress is slow and often frustrating, he says, the IMO provides a space for the European Union, the United States, China, or other big entities and invested stakeholders to “play off against each other and try to have some ambition to move forward.”

To be clear, the transition of maritime shipping to zero emissions is in its earliest stages. The ships, and the ports that refuel them, will need to transition to zero-emission fuels, such as green hydrogen and green ammonia, a daunting logistical and economic prospect. The lifespan of ships runs roughly 12 to 20 years, so transitioning them to green technology requires new designs and alternative fuel development, which in turn requires confirmed buyers to motivate its production. All of these pieces need to come together.  

But a few industry players are giving critical momentum to the field. According to the report, AP Moller Maersk, one of the world’s largest shipping companies, ordered 19 vessels that can run on green methane fuel, an act that was followed by other companies.

“There are only about 90,000 ocean-going vessels in the world,” Anderson observed. “You compare that to the billions of cars, and suddenly, it starts to look like something you can really wrap your hands around.’”

There is also plenty of room in the sector for more — much more — philanthropic investment. Anderson ballparks the current private annual investment at about $20 million, up from just a few million per year when ClimateWorks first got involved. He calls this amount “just a pinprick,” uniting a small community of people and a circle of experts.

Bolstering this sector momentum and drawing greater philanthropic investment motivated the report, according to Ingrid Irigoyen, Aspen Institute associate director, ocean and climate, and a co-author of the report.

“I think there has been a broader realization that the ocean is one of the most important mitigators of climate change,” said Irigoyen. “It's also tremendously impacted by climate change, and many ocean industries can and need to decarbonize. It is all interconnected.”

Irigoyen hopes the report will help bridge traditional ocean funders to climate from a historical focus on conservation, marine wildlife, and sustainable seafood and fishing, as they recognize that addressing climate change is critical to ocean health and their missions. 

“As you decarbonize certain ocean industries, there can be benefits for marine species, for local communities living near the ocean, and for emerging issues like ocean noise pollution,” said Irigoyen. “So if we’re going to decarbonize, why not, in the midst of that tremendous effort, also intentionally find those benefits that fit more squarely into the strategies of traditional ocean conservation funders?”

The report, “Accelerating a Zero-Emission Transition in Maritime Shipping: The Solutions Landscape and Opportunities in Philanthropy,” provides what Irigoyen describes as a brief, credible introduction to “investable decarbonization opportunities” for philanthropies considering entering the field or expanding their marine or climate work.

“We need so much more capacity in this space,” Irigoyen said. “Decarbonizing maritime shipping has gone from a hopeless case to where many of us are really optimistic about the ability to make change, but we’re behind schedule,” said Irigoyen. “The sooner we get that strong support from NGO and philanthropic partners, the more successful our movement will be.”

The report highlights five categories with specific actions where new funder investments could add to the momentum, aligning with a wide range of funding windows and strategies.

1. Build a community of action among maritime shipping industry stakeholders. From cargo owners to shipbuilders and beyond, collaboration to ensure a zero-emission shipping industry is needed. For example, ClimateWorks supports Ports for People, which works to bring together local port communities, port authorities, city councils, and boards of governors to advance zero-emission shipping.

2. Increase demand for zero-emission solutions, particularly from shipping industry customers. While some significant stakeholders like Maersk have stepped up demand for zero-emission fuels, the next stage will require getting cargo owners and consumers to demand or support zero-emission transport for their goods.

3. Improve policy and regulation globally to accelerate the transition to zero-emission shipping. This includes initiatives that leverage consumer and shareholder advocate pressure and ensure equity of decarbonization solutions in small island developing states and least developed countries. These are issues ripe for philanthropic partners. ClimateWorks pursues initiatives in this area, too, supporting Transportation & Environment, which works to promote EU policy advances.

4. Foster technological innovations, especially in energy efficiency and carbon emission tracking. Energy efficiency measures span everything from route optimization to propulsion devices. The report recommends maximizing the efficiency of fossil-fuel-using ships as a critical stopgap measure while the industry transitions to long-term efficiency solutions and zero-emission fuels. A second area of critical need is developing a tracking system to ensure that the manufacturing, development and delivery of new fuels are indeed emission-free.

5. Enable deployment of solutions through green shipping corridors. Green corridors have emerged as a concept for showcasing and integrating zero-emission technologies and incentivizing companies and countries to decarbonize their shipping. Decarbonizing the sector requires integrating ports, seaboards and vessels. According to the report, “green corridors simplify this complex challenge by focusing efforts on specific promising routes.” Funder investment in developing these corridors, which are still in their early stages, can help ensure their success and expansion.

As the list implies, maritime shipping presents a sobering reminder of what makes climate change so difficult to address. Decarbonizing an industry relied on worldwide to sustain quality of life encompasses technical, economic, social, political and global issues across a complex timeframe and a planet of jurisdictions.

Irigoyen believes getting it done and getting it done right is critical.  

“There are many poor people on this planet that cannot afford to pay a whole lot more for basic goods,” Irigoyen said. “We need the right policy support, and we need the right partnerships to ensure that this happens quickly but also thoughtfully.”