The South African government needs to put appropriate funding and policies in place to ensure its
transport sector, including shipping, adapts to zero-carbon fuels
An estimated 90% of global trade is transported by sea and the shipping industry accounts for nearly 3% of the world's carbon dioxide (CO₂) emissions. The industry is therefore under immense pressure to become cleaner and greener. We have also seen this pressure build at the UN Climate Change Conference 2021 (COP26), as nations rally together to find a greener shipping future.
South Africa has six major commercial ports and is considered a prominent player in the international shipping industry, due to its location and contribution to international trade agreements.
The South African Department of Transport’s Green Transport Strategy for 2018 – 2050 (Green Transport Strategy) reiterates how intrinsically linked the oceans and coasts are to a well-functioning society. The shipping industry directly relies on the well-being of the climate and our oceans, so it needs to remain at the forefront of protecting our natural environment.
As the international maritime transport sector stands on the cusp of a cleaner energy revolution, there are multiple international and local opportunities for South Africa to help lead these changes.
The International Chamber of Shipping (ICS) and Intercargo recently submitted a proposal to the UN's Shipping Agency, the International Maritime Organisation (IMO), for a levy based on mandatory contributions for each ton of CO₂ emitted from ships. Market-based measures such as this can be effective in closing the cost gap between fossil and alternative fuels. Without the carbon levy, fossil fuels are likely to remain cheaper than cleaner fuel.
The money collected will go towards a climate fund that would be used to deploy infrastructure in ports around the world which would supply cleaner fuels such as hydrogen and ammonia. This levy could potentially accelerate the industry towards a future of zero carbon emission.
During COP26, the world's leaders have discussed strategies to keep global temperatures from rising by 1.5 degrees Celsius. This has led to especially intense deliberations for the shipping industry, which contributes greatly to global emissions. It has been disappointing to see South Africa mainly absent from the main declarations coming out of COP26.
South Africa's strategies
The Green Transport Strategy states that sustainable development has to balance social, economic, and environmental interests. In South Africa's 2021 updated Nationally Determined Contribution (NDC) under the Paris Agreement, it highlights the transport sector as a priority area. Cleaner transport could significantly reduce CO₂ emissions.
The Green Transport Strategy has specific interventions dedicated to maritime transport, but does not explain exactly how greenhouse gas emissions will be reduced in the shipping industry. It only refers to the need for robust environmental mitigation strategies.
To turn the strategy into meaningful action, South Africa needs to do the following:
- The IMO has adopted a marine sulphur cap of 0.5%, which became effective in January 2020. Although the Green Transport Strategy refers to this cap and the intention to initiate necessary plans to ensure its implementation, government needs to introduce the appropriate policy or regulations in terms of the Merchant Shipping Act.
There is an opportunity for South Africa to develop comprehensive regulations for the increased use of renewable, energy-efficient fuels.
- South Africa's shipping industry needs to adopt more robust and immediate strategies towards achieving zero emission transport. A recent study by Rocardo and Environmental Defense Fund for the P4G Getting to Zero Coalition Partnership found that South Africa has an untapped opportunity to supply the world with zero carbon fuels.
- South Africa's location, economic development and vast renewable energy sources all contribute to making it a well-suited hub for cleaner maritime fuel. There is an abundance of renewable energy potential in the country, which could meet domestic demand and supply zero carbon fuels for vessels refuelling at South Africa's various international ports.
- There are immense social, environmental and economic opportunities here, as it is estimated that the adoption of zero carbon propulsion technologies at South Africa's ports could attract international investment of between ZAR 122 and 175 billion by 2030. Increased investment could be seen in sectors driving renewable electricity, zero carbon fuels, and sustainable infrastructure, as well as the creation of "green" jobs across a range of skill and education levels. This will be seen in solar and wind farms, as well as green hydrogen and green ammonia plants.
- South Africa will also have to create monitoring and accountability structures which can assist with evaluations and reporting guidelines. This is also essential to ensure enforcement of international and local standards.
- South Africa needs to join the fourteen other nations who have signed the Declaration on Zero Emission Shipping by 2050 at COP26. In terms of this declaration, nations are committing to strengthen global efforts to achieve zero emissions from international shipping by 2050.
- It is also concerning that South Africa has not joined other nations at COP26 in signing the Clydebank Declaration, and agreeing to support the establishment of at least six green corridors by 2025. This will require developing supplies of zero emissions fuels, the infrastructure required for decarbonisation and regulatory frameworks.
Moving towards zero carbon emissions is going to require a systematic, industry-wide transformation. South Africa has strong maritime legislation in place and has significant potential to become a leading voice in the cleaner fuel revolution. This will, however, require a concentrated effort by the South African government to mobilise the necessary funds and resources, as well as to develop strong policies and regulations.
Webber Wentzel will be publishing various insights on the COP26 conference discussions. Stay tuned to this COP26 Insight Series for more.