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International carbon collaboration could reshape shipping markets

30 September 2022
Special Presidential Envoy John Kerry was one of many prominent speakers at the Clean Energy Ministerial 2022, held in Pittsburgh, USA. Credit: John Kerry/@ClimateEnvoy

Five industries representing more than 50% of global emissions need stronger international collaboration to deliver reductions in line with the Paris Agreement, according to the first report from a new group aiming to reshape major charter markets and accelerate development of green fuels and technologies.

The Breakthrough Agenda was signed by 45 nations at the COP26 climate conference in Glasgow last year to drive emissions reductions in the power, hydrogen, road transport, steel and agriculture sectors. The report – authored by the International Energy Agency, the International Renewable Energy Agency and the UN’s High-Level Climate Champions – delivers recommendations for greater cooperation to ensure that sustainable technologies and practices are attractive and accessible by 2030.

Francesco La Camera, Director-General of IRENA, said: “The joint report sends a strong signal ahead of COP27 that greater international collaboration can amplify ambition and accelerate progress. Advancing the transition to renewables is a strategic choice to bring affordable energy, jobs, economic growth and a cleaner environment to the people on the ground.”

To meet the Breakthrough Agenda pledges, up to 8TW of renewable power capacity will be needed by 2030 (compared to less than 3.1TW today). Renewable and low-carbon hydrogen production must scale up from less than 1Mt in 2020 to around 140-155Mt per year. And annual production of net zero carbon steel must increase 100-fold from a million tonnes today.

Among key recommendations that could influence shipping markets is that countries should work harder to develop interconnections for renewable energy, allowing multiple nations to share larger production capacity and build stronger markets. The number of demonstration projects for renewable hydrogen – including derivative fuels like ammonia and their potential use in shipping – should be increased and backed by targeted technical and financial assistance.

The authors also argued for advance purchase commitments from multiple countries to mobilise the investment needed in low-carbon steel production. Focused discussions also need to be started on how to ensure international trade facilitates the transition to sustainable agriculture.

The recent announcement of the Clean Energy Marine Hubs at the Clean Energy Ministerial is one maritime industry led initiative that seeks to meet the challenges set out in the report.