* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
United in dependence on sea trade, and exposure to climate risks, Latin American countries need to speak with one voice
The renewable energy boom is creating economic opportunity in countries around the world. Now it needs to reach the oceans.
The last industry in the world still in need of a wake-up call on the energy transition is shipping.
If it were a country, the shipping sector’s greenhouse gas emissions would be comparable to Germany’s, and the sixth highest in the world.
But unlike Germany, shipping remains outside the Paris Agreement on climate change, with a steep upwards emissions trajectory likely over the coming decades.
Some easy wins are open to us. Making vessel efficiency data public to the market could channel private sector investment into the most efficient vessels, save several billion dollars on fuel costs every year, and reduce the sector's emissions substantially.
Speed limits are another simple way for the sector to reduce its emissions, and would also save billions of dollars in fuel costs each year. Other decarbonisation options like wind-assisted technology, could reduce oil consumption of ships, along with their fuel bills.
Batteries are making headway in short-haul and inland shipping, but to decarbonise the ocean-going fleet we need massive investment in low and zero-emission fuel types such as hydrogen, ammonia and biofuels.
The adoption of these fuels will require clear regulatory action, and new finance mechanisms especially for developing country markets.
When an industry spends over $100 billion a year on its fuel bill, even a one percent tax on oil purchases could raise serious revenues for research into renewable energy maritime propulsion - while keeping that money within the sector. Having a sizeable fund available to incentivise clean-tech innovation would be welcomed by many shipowners.
It also raises the opportunity to consider how that fund could be used if there were economic impacts in developing countries that require compensation.
We also need to work harder at scaling up clean shipping technology in developing countries.
Wind and solar are growing at a tremendous pace in Latin America - why not use times of excess power to produce hydrogen for ships, or recharge batteries, helping to balance the grid? Why not use existing hydropower to produce ammonia fuels?
French company ENGIE is considering where to invest in hydrogen production, amongst places where solar electricity is cheapest. It says that in Chile’s Atacama desert it could produce hydrogen on an industrial scale.
Brazil has a huge competitive advantage in biofuels, and could support its struggling domestic ethanol producers by expanding into the marine fuels market.
As commercial organisations, shipping companies’ decisions on fuel type have to make financial sense. The price of renewable fuels like hydrogen ultimately depends on the cost of electricity used to produce them, and this cost is plummeting globally, especially in Latin American markets able to utilise their renewable energy abundance.
In shipping, like any industry, it would be foolish to base business models on the belief that fossil fuels will stay the cheapest option forever. Many coal companies have learnt this lesson the hard way, going bankrupt.
With vessels typically lasting around 25 years before they have to be scrapped, climate change should be taken into account by every shipbuilder today.
United in our deep dependence on sea trade, and exposure to climate risks, Latin American countries need to speak with one voice. We need to show the same leadership as the Marshall Islands and other Pacific nations speaking out on this issue.
We need to push for the only Paris Agreement aligned objective in shipping – a 70-100 percent reduction in greenhouse gas emissions from the shipping sector by 2050.
The only way to get there is a secure global regulatory framework that incentivises the decarbonisation of the fleet.
This April 9-13 at International Maritime Organization headquarters in London, a crucial meeting is happening to set out a unified strategy for the world’s shipping sector to reduce its greenhouse gas emissions.
I urge all leaders across Latin America to join together and demand action on greenhouse gases, to put the shipping sector on a sustainable course. Anything less and we put the Paris Agreement at risk, along with our citizens’ health and livelihood.
Jose Maria Figueres is chairman of Carbon War Room. From 1994-1998 he was president of Costa Rica.
