Sweden should export shipping decarbonsation agenda says OECD report

THE OECD has published what it says is the first of several reports on national efforts to decarbonise maritime transport.

While it praises the efforts by Sweden and pushes for the countries existing policies to be recognised and copied internationally it also says the level of effort to date remains insufficient to meet any long-term targets.

The case-specific report in Sweden’s efforts by the International Transport Forum’s, a transport policy group consisting of OECD country members, comes at a time of growing interest in creating strong regulatory pressure to severely cut the carbon footprint of international shipping.

In the report the ITF identifies that while Swedish shipping has made a number of significant advances in demonstrating the ability to make serious cuts in CO2 emissions, and this in part comes from a proactive approach from the country’s shipowner association and pressure from shippers in Sweden.

Report author Olaf Merk from ITF writes in the report that most Swedish shipping companies are family owned, with most located in the island of Donsö, near Gothenburg, a de facto maritime cluster. This he says stimulates trust to cooperate in developing green and innovative ships.

He also identifies that the interest of Swedish ship-owners in sustainability and innovation has been encouraged by large Swedish shippers, such as the energy company Preem, that are dedicated to green supply chains.

“This has resulted in partnerships between shippers and shipping companies that overcome barriers that have traditionally hampered progress in greening shipping,” he wrote in the report. “In particular the willingness of certain shippers to commit to long-term charter contracts with the new low carbon ships seems to have been a main determining factor.”

But while the report identifies some positive moves by Swedish shipowners and business communities, it does warn that the efforts to date are still at an early stage. It states that more action is needed if the sector wants to achieve its goal of zero-carbon shipping by 2050.

First efforts by Swedish shipowners alone will not be enough to create a significant percentage change, even with Swedish government policies. The report states that the demonstratable efforts by Sweden need to be applied at a global level.

ITF recommends that the Swedish government expands financial tools to further incentivise decarbonisation, including a  green ship financing instrument.

These include pushing for decarbonisation in the mission of a state-owned shipping bank and following the lead of the Norwegian NOX fund and creating a similar national CO2 fund.  A third suggestion is to create a favourable taxation system for the decarbonisation of shipping, including in relation to electricity taxation.

As well as financial measures ITF suggests Sweden can lead by example by bringing its shipping-related policies more directly in-line with the international climate targets, create a decarbonisation criteria in any government procurement of shipping services (the country has a large network of state-owned ferries operating in its archipelagos and lakes)

But while the ITF identifies areas where Sweden can make further improvements, it does praise the current national approach and suggests parts can be copied internationally.

 “The Swedish government could make sure that the country’s pioneering practices in decarbonisation of maritime transport are disseminated and used on a global level. For instance, Sweden could help improve supply chain efficiency by pushing for more vessel sharing through the use of HELCOM data,” writes Mr Merk in the report. “Sweden could also showcase national best practices internationally and submit proposals to the IMO that would help Swedish ship owners to decarbonise. It could also focus on stimulating outcome-driven regulation at the IMO level, similar to the approach that has delivered some of the achievements in Sweden. Finally, Sweden could push for a simplification of European Investment Bank (EIB) procedures for EU loans for low-carbon shipping.”

Read the full report here



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