Industry Giants Commit to Transparent Reporting of Shipping Emissions
A group of the world’s largest energy, agriculture, mining, and commodity trading companies will for the first time assess and disclose the climate alignment of their shipping activities.
Seventeen of the world’s largest corporations using shipping services, including ADM, Anglo American, Bunge, Cargill Ocean Transportation, COFCO International, Dow, Equinor, Gunvor Group, Klaveness Combination Carriers, Louis Dreyfus Company, Norden, Occidental, Shell, Torvald Klaveness, Total, Trafigura, and Ørsted, came together as the founding members of the Sea Cargo Charter. The Sea Cargo Charter sets a new benchmark for responsible shipping, transparent climate reporting, and improved decision making in line with United Nations decarbonization targets.
“A standard greenhouse gas emissions reporting process will simplify some of the complexities often associated with reporting. It will encourage a more transparent and consistent approach to tracking emissions, which will be a critical part of making shipping more sustainable,” says Jan Dieleman, President, Cargill Ocean Transportation and Chair of the Sea Cargo Charter drafting group.
According to the announcement of the new initiative, the charter applies to bulk charterers with interest in the cargo on board as well as those who charter out the vessels and the owners and all charterers in a charter party chain. The standards of the charter apply globally, to all chartering activities where a vessel or vessels fall under the purview of the IMO.
“The shipping industry as a whole needs to adopt a transparent approach, advocated by the Sea Cargo Charter, in order to fully understand the sector’s overall greenhouse gas footprint and for us to collectively rise to the challenges faced,” says Rasmus Bach Nielsen, Global Head Fuel Decarbonisation, Trafigura.
The impetus for the initiative comes from the fact that according to estimates from the United Nations, the international shipping industry to carry around 80 percent of world trade and is responsible for two to three percent of global greenhouse gas emissions annually. Large industrial corporations, such as the seventeen signatories to the charter, are significant users of international shipping services. The shipping of crude oil, coal, iron ore, grain and other bulk commodities used worldwide make up over 80 percent of global seaborne trade.
The Sea Cargo Charter is a global framework that allows for the integration of climate considerations into chartering decisions to favor climate-aligned maritime transport. It establishes a common baseline to quantitatively assess and disclose whether shipping activities are aligned with adopted climate goals. The Sea Cargo Charter is consistent with the policies and ambitions adopted by member states of the International Maritime Organization (IMO), a specialized agency of the United Nations responsible for regulating shipping. This includes its ambition for greenhouse gas emissions from international shipping to peak as soon as possible and to reduce shipping’s total annual greenhouse gas emissions by at least 50 percent of 2008 levels by 2050, with a strong emphasis on zero emissions.
“The Sea Cargo Charter is an important step in laying the foundations for a net-zero emissions shipping industry. Collaboration such as this, from across the sector, is vital to scale-up customer demand for low- or zero-emissions shipping. This same spirit of collaboration is also vital in the pursuit of the technological advances needed to unlock decarbonization solutions, and in building industry support for regulation which can create an ambitious but level-playing field under which to invest. Building on this momentum we would like the IMO to use its 2023 strategy review to set the trajectory for the sector to move to net-zero emissions by 2050,” says Grahaeme Henderson, Global Head, Shell Shipping & Maritime.
The Sea Cargo Charter is intended to evolve as the IMO adjusts its policies and regulations and when further adverse environmental and social impacts are identified for inclusion. They also aim to support other initiatives developed to address climate, environment, and social risks in shipping.
“The Sea Cargo Charter enables leaders from diverse industry sectors to use their influence to drive change and promote shipping’s green transition by choosing maritime transport that is aligned with agreed climate targets over that which is not,” says Johannah Christensen, Managing Director, Head of Projects & Programmes at international non-profit, Global Maritime Forum.
The development of the Sea Cargo Charter was led by global shippers Anglo American, Cargill Ocean Transportation, Dow, Norden, Total, Trafigura along with leading industry players Euronav, Gorrissen Federspiel, Stena Bulk. The Global Maritime Forum, Smart Freight Centre, University College London Energy Institute/UMAS, and Stephenson Harwood provided expert support.