AMF #11 - Insights into COP28 and the Effect on Maritime Decarbonization

1.?Introduction

Over nearly three decades, the United Nations has organized an annual assembly, the Conference of the Parties (COP), dedicated to addressing the pressing issue of climate change. This global forum, which reached a critical moment with COP21, witnessed the historic adoption of the Paris Agreement in 2016. Comprising almost 200 nations, this accord established a collective commitment to limit the rise in the average global temperature to below 2?C (preferably 1.5?C) compared to pre-industrial levels. Central to this commitment is the submission of Nationally Determined Contributions (NDCs), outlining each member's plans for reducing carbon emissions.

The 28th COP (COP28) under the UN Framework Convention on Climate Change recently concluded in Dubai, United Arab Emirates, on December 13, 2023, resulting in the UAE Consensus. While various factors discussed during the conference held significance for the shipping industry as well with the first official acknowledgment within the COP framework that fossil fuels are considered the primary driver of climate change. It is worth noting that the inclusion of fossil fuels in international climate agreements only materialized in 2021 at COP26 in Glasgow, showcasing a delayed recognition that unfortunately lacked the necessary ambition.

The UAE Consensus during COP28 signifies a crucial milestone in global climate efforts. By addressing the root cause of climate change and recognizing the detrimental role played by fossil fuels, this agreement navigates toward more impactful and actionable measures.

2.?Pathways to 1.5°C

The Paris Agreement, established as a legally binding international treaty on climate change, found endorsement from 196 Parties during the UN COP21 in Paris, France, on December 12, 2015, and subsequently became effective on November 4, 2016.

Decisions made during COP28 outlined a collaborative agenda for Parties and partners to pursue substantial, swift, and continuous reductions in greenhouse gas emissions, aligning with the 1.5°C pathways. This marked the first explicit mention of the imperative to decrease 43% of GHG emissions by 2030 and a more substantial 60% by 2035 relative to the 2019 level. The clarification is provided that not all countries are expected to undergo decarbonization at an identical pace, hinting at the expectation that wealthier nations should take the lead. Although this leadership expectation is not explicitly stated, the directive stands. Moreover, countries are required to submit updated national targets by 2025.

A significant report submitted to COP28 by the World Meteorological Organization (WMO) underscored the accelerating pace of climate change and its impacts on our planet and daily lives through intensified extreme weather events. The year 2023 is virtually confirmed to be the warmest on record, already exceeding the 1.4°C threshold above the pre-industrial era when COP28 commenced in November. Projections for 2024 anticipate continued warmth, potentially surpassing previous records. The urgency to remain below the 1.5°C lower temperature limit of the Paris Agreement is emphasized, as we approach close to this threshold. The persistent rise in carbon dioxide concentrations in the atmosphere, setting record levels annually, signifies an ongoing path of temperature rise in the forthcoming decades due to the extended lifespan of CO2.

The truth is that actions are lagging in the race to fight against the alarming decline of vital glaciers and to mitigate sea level rise globally. The scientific community underscores the necessity of employing kilometer-resolution climate models to simulate extreme weather events and the rapid melting of Antarctic glaciers more accurately. This technological advancement is imperative for an enhanced understanding of climate dynamics and the complex challenges posed by climate change.

3.?Agreement to Move Away from Fossil Fuels

Upon the overwhelming COP28 agreement, it emerged a wider sense of approval, tempered by concerns, particularly from Small Island Developing States, expressing concern that the agreement may be insufficient.

The desire among most nations was for a robust declaration advocating for the gradual phasing out, or at the very least, a reduction in the use of fossil fuels. Instead, an agreement was reached, emphasizing the necessity to "transition away from fossil fuels in energy systems, in a just, orderly, and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.

The COP28 UAE consensus to shift away from fossil fuels stands as a significant step towards preserving lives globally. It symbolizes a united global call for urgent measures to safeguard human health and counteract the climate crisis. However, for this agreement to truly mark a historical turning point, achieving net zero by 2050 demands a substantial transformation in energy production and consumption patterns, shifting away from dependence on fossil fuels toward renewable and sustainable alternatives. The rapid scaling of financial and technical support is essential, proportional with the requirements of low- and middle-income countries, aiding their transition away from fossil fuels and adaptation to current and future climate change.

While the Global Stocktake?content places specific emphasis on transitioning from fossil fuels in energy systems, it is noteworthy that carbon-intensive industries extend beyond the energy sector. These industries, contributing approximately 22% of global emissions annually, pose challenges to decarbonization, particularly in sectors like cement, steel, and chemicals. Factors such as high heat requirements, process emissions of carbon dioxide, and economic constraints, including low profit margins, capital intensity, and prolonged asset lives, make abatement efforts more complex.

Consequently, the introduction of the Industrial Transition Accelerator (ITA) aims to deal these challenges head-on. Its mission is to accelerate decarbonization across diverse sectors, fostering collaboration among policymakers, technical experts, investors, and industries to swiftly scale emissions-reduction initiatives. This initiative not only seeks to stimulate the demand for green solutions but also advocates for policy changes, encourages novel financial products, and highlights opportunities to decarbonize hard to abate industries with high level of emissions. In essence, industries like shipping and cement, which have received inadequate capital for projects aligning with global climate needs, are at the forefront of this transformative initiative.

4. Renewable Energy and Energy Efficiency Improvements by 2030

The agreement on fossil fuels signifies a global consensus to shift away from them, aiming to inspire motivation and mobilize resources toward expanding renewable energy and reducing emissions. This commitment aligns with the International Energy Agency's (IEA) objective to triple the world's installed renewable energy generation capacity by 2030, a pledge supported by approximately 130 countries as of December 8.

This collective commitment forms one of the IEA's essential strategies to limit global warming to 1.5°C above preindustrial levels by the century's end, encompassing nations responsible for 40% of global carbon dioxide emissions from fossil fuel combustion, 37% of total global energy demand, and 56% of global gross domestic product (GDP).

Noteworthy is the absence of China and India, major greenhouse gas emitters, among the 130 signatories. Yet, both nations endorsed the New Delhi Leaders Declaration by the Group of Twenty (G20) in September, pledging to pursue and encourage efforts to triple renewable energy capacity globally by 2030. Additionally, just prior to COP28, the Chinese and U.S. governments affirmed in the Sunnylands Statement their joint commitment to pursue efforts to triple renewable energy capacity globally by 2030.

The IEA's prediction suggests that if the current pace of renewable growth persists, countries can attain the goal of triple global renewables by 2030. The sustenance of this upward path relies on government incentives, favorable interest rates, and economical manufacturing costs. However, uncertainties loom between now and 2030, given the varying costs of constructing renewable power plants and associated infrastructure. These costs depend on country-specific factors such as regulations, material inputs, capital, land, and labor expenses.

5. Reduction Non-CO2 Emissions, Including Methane by 2030.

COP28 has reached an agreement focused on addressing methane emissions and other non-CO2 emissions within this decade. Simultaneously, the commitment entails the phasing out of inefficient fossil fuel subsidies that do not facilitate the transition. Recognized for its potency as a greenhouse gas, methane is approximately 86 times more effective at trapping heat than carbon dioxide over a 20-year period, necessitating its targeted reduction to align with the goals of the Paris Agreement.

This accord builds upon the Global Methane Pledge introduced by the EU and US during COP26 in 2021, serving as the primary coordination platform for global methane emissions reduction. With over 150 countries, collectively responsible for more than half of the world's methane emissions, reaffirming their commitment to reduce methane output by 30% by 2030 compared to 2020 levels. This pledge, originating from COP26 and widely supported by governments, businesses, and civil society groups, underscores the global dedication to addressing this critical issue. Nevertheless, the absence of support from significant methane-emitting nations underscores the ongoing necessity for diplomatic initiatives and engagement.

Furthermore, prominent oil and gas companies have committed to ambitious targets for reducing methane emissions from their operations, ranging from a 50% reduction by 2030 to achieving near-zero methane emissions by 2050.

A significant development is the presentation of the first-ever EU law designed to reduce methane emissions in the energy sector, establishing world-leading standards for measuring, detecting, and stopping emissions within the EU and globally. Additionally, the EU and its Member States have pledged €175 million to support the Methane Finance Sprint, aiming to catalyze collaborative efforts across government, industry, and philanthropy to reduce methane emissions in the energy sector. This initiative includes facilitating the methane data revolution through the utilization of new satellites.

Another significant announcement entails the EU Commission's commitment to developing a roadmap for the global implementation of the "You Collect, We Buy" scheme by COP29. This innovative scheme incentivizes companies to capture and commercialize gas that would otherwise be wasted through venting and flaring, contributing to climate action and energy security. The EU and Algeria will collaboratively pilot this scheme.

To dive deeper into the topic of Methane Emissions, you can explore the article through the following link: AMF #9 - Understanding Methane Slip: A Key Challenge on the LNG-Powered Vessels

6.?Discussions Around Carbon Capture, Utilization, and Storage (CCUS)

As COP28 unfolded, the discourse on fossil fuels took center stage, and the focus shifted prominently to the technology of carbon capture. Three key subjects regarding carbon removal, carbon capture, and carbon markets took attention within the global stocktake, delving into markets under Article 6 of the Paris Agreement and the mitigation work program.

Within the global stocktake process, there was an opportunity to gain enhanced recognition and more explicit guidance regarding the role of carbon removal in climate change mitigation. This guidance holds significance for its incorporation into the forthcoming round of national climate pledges in NDCs, expected by 2025. Section 28 of the stockpile encourages Parties to contribute to global efforts, aligning with the Paris Agreement and accounting for their unique national circumstances, pathways, and approaches. In paragraph (e), emphasis is placed on abatement and removal technologies, including carbon capture, utilization, and storage. Additionally, ocean-based carbon removal methods are outlined in a distinct point under section 35.

Anticipating the next round of long-term strategies, the carbon removal community has a focal point. The global stocktake decision urges countries to submit their revised long-term strategies by COP29. Overall, the global stocktake decision explicitly references CCUS in the context of the next global stocktake. The heightened urgency surrounding removals may see further enhancement, and the forthcoming guidance is expected to become more specific and streamlined.

To go deeper into the CCUS in maritime, you can explore the article through the following link: AMF #10 LCO Carriers & Its Role in Decarbonization

7.?Final Thoughts and Key Takeaways

In the discourse of COP28, the global community engaged in discussions addressing issues related to climate action. The commitment to transition away from fossil fuels emerged as a landmark agreement, reflecting a unified position to safeguard the planet. Notably, the emphasis on renewable energy and energy efficiency underscored the imperative need to triple the world's renewable energy capacity by 2030, with governments and major corporations playing important roles.

Going into the specifics, substantial reductions in greenhouse gas emissions, particularly methane, with governments, industries, and major oil and gas companies committing to ambitious targets. Furthermore, the concerted efforts to reduce non-CO2 emissions and phase out inefficient fossil fuel subsidies demonstrated a commitment to meaningful climate action.

The discussion on carbon capture, utilization, and storage (CCUS) illuminated the trajectory of technological advancements as integral components of climate mitigation strategies. The global stocktake process emerged as a significant platform for countries to contribute, ensuring recognition and explicit guidance on carbon removal, thereby enhancing the trajectory of future climate pledges.

The global discourse at COP28 reflects a holistic and collaborative approach, involving governments, industries, and major corporations, with a shared goal of addressing climate change challenges.

In conclusion, COP28 showcased a collective determination to forge ahead in the fight against climate change. The outlined initiatives and commitments path towards a sustainable and resilient future, requiring ongoing collaboration and persistent efforts to meet the outlined goals.

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