The International Maritime Organization (IMO) meets regularly in London to set cornerstones for the shipping industry of tomorrow, such as advancing the Net-Zero Framework (NZF).
It was mid-October in London. Delegates from around the world had gathered in the packed plenary of the International Maritime Organization (IMO) on Albert Embankment. The crowd of delegates also included Wolfram Guntermann, Hapag-Lloyd’s Director of Regulatory Affairs. As part of the World Shipping Council (WSC) delegation, he represents the company’s sustainability interests at IMO meetings, as Hapag-Lloyd does not hold a formal seat there itself. For him, days like these are decisive: In the meeting rooms not far from the Thames, discussions were taking place on which rules should apply to maritime climate protection – and, therefore, how realistic the goal of achieving climate-neutral shipping by 2050 remains. The nameplates in the plenary hall bore the names of 174 member states, including Panama, Greece, China and the United States. What had been building up in the world over the past months was now taking shape within these walls as delegates positioned themselves for the decisive discussions on the Net-Zero Framework (NZF).
For four days, delegates had been negotiating every detail of the NZF – the set of rules that would put in place the first-ever global pricing scheme for greenhouse gas (GHG) emissions. Instead of introducing a new tax, the framework is meant to create a fair incentive system that encourages all shipping companies to invest in cleaner fuels and technologies while ensuring a global level playing field. The money collected through this system, such as from fees or penalties, would not only help fund research and new climate-friendly solutions but also support developing countries in making shipping more sustainable.
But what was celebrated as a breakthrough last spring, when the NZF was approved during the 83rd session of the IMO’s Marine Environment Protection Committee (MEPC), was now in danger of collapsing. Under the pressure of geopolitical interests, priorities had shifted – and even the consensus among EU countries was crumbling. “The atmosphere was extremely tense,” Guntermann says. After four days of heated discussions, a vote was finally held, but only to postpone the decision on the formal adoption of the NZF for a year – with 57 votes in favor of adjourning the meeting, 49 against doing so, and 21 abstentions. “It was very disappointing, and you could see that in the faces of everyone involved in the IMO,” Guntermann continues. “But, of course, some member states were also very happy with the decision.”
Wolfram Guntermann Hapag-Lloyd’s Director of Regulatory Affairs
A look at the industry’s transition to alternative fuels, captured in bunkering processes and next-generation, lower-emission vessels.
The shipping industry needs reliable framework conditions in order to make long-term investments.
For Hapag-Lloyd and the global shipping industry, the postponement of the NZF will require one thing above all else: patience. “We regret that the decision has been pushed back,” Guntermann says. “The shipping industry needs reliable framework conditions in order to make long-term investments. But we are still confident that a strong, harmonized set of regulations will be adopted in the coming years.”
In its Strategy 2030, Hapag-Lloyd stated its aim of becoming the industry’s “sustainability driver.” To do so, Hapag-Lloyd is hard at work on new projects designed to make its future fleet even more efficient and environmentally friendly. While these efforts will certainly not be made easier without the support of a global framework, the company continues to strive to achieve this goal.
“We remain committed to our long-term decarbonization targets that we have defined as part of our Strategy 2030. Thus, we continue to aim to reduce our absolute emissions by around a third by 2030 and to achieve net-zero fleet operations by 2045. Alternative fuels are one of our key levers to achieve these targets, but we are also looking to maximize the efficiency of our operations through fleet renewal, upgrades of our existing fleet, and network efficiency, which are important in any regulatory scenario,” says Philip Kettelhodt, Senior Director Sustainability at Hapag-Lloyd.
Philip Kettelhodt Senior Director Sustainability at Hapag-Lloyd
The key levers to cut CO₂ emissions
FLEET GROWTH & RENEWAL
We’re adding new, larger and more efficient dual-fuel vessels to our fleet.
FLEET UPGRADE
We’re applying technical measures to reduce fuel consumption of existing fleet.
NETWORK EFFICIENCY
We’re reducing service speed while maintaining competitive transit times.
ALTERNATIVE FUELS
We’re assessing the optimal mix of alternative fuels.
FUTURE MEASURES
We’ll implement further measures once technically and economically viable.
Jan Christensen Senior Director Global Fuel Purchasing at Hapag-Lloyd
Staying on course with strong partners
Although the postponement of the NZF can have some side effects – such as lower prices for conventional fuels and therefore reduced incentives for measures like slow steaming or other efficiency improvements – it only directly affects one of the four levers Hapag-Lloyd intends to use as part of its broader decarbonization strategy: the availability of alternative fuels worldwide. The problem is that, at present, the price and availability of alternative fuels – as well as the necessary global infrastructure for them – are not yet at the level needed for a major breakthrough.
“The global availability of alternative fuels remains limited, and the postponement of the Net-Zero Framework will hardly ease the situation in the short term.”
This makes reliable partnerships that can already today secure access to alternative fuels at scale all the more important. To this end, Hapag-Lloyd recently signed a multi-year supply agreement with Shell for liquefied biomethane (bio-LNG) – a waste-based, renewable fuel that can be used in Hapag-Lloyd’s dual-fuel LNG ships without any technical modifications.
Powering ships with waste? Discover biomethane with Shell and Hapag-Lloyd
Video by: Shell
Alternative fuels
Key facts at a glance
LNG (Liquefied Natural Gas)
LNG is natural gas cooled to -162°C until it becomes a liquid. It’s made from fossil gas extracted from underground deposits, then purified and liquefied at special plants. LNG burns cleaner than heavy fuel oil, producing less CO₂, sulfur and soot — but it’s still a fossil fuel, so not fully climate-friendly.
Bio-Methane
Bio-methane is a renewable form of natural gas almost identical to regular methane. It’s made from organic waste, such as food scraps, sewage and manure, which release methane as they decompose. The gas is purified and used like natural gas. Since it comes from renewable sources, bio-methane can be carbon-neutral or even carbon-negative, and it works in the same engines as LNG.
E-Methane
E-methane is a synthetic form of methane made using renewable electricity. It’s produced by combining hydrogen (from water) with carbon dioxide (CO₂) in a process called methanation. When made with green electricity and captured CO₂, it’s a fully renewable, climate-neutral fuel. Just like LNG or bio-methane, it can be used in existing engines and systems.
Methanol
Methanol is a liquid alcohol. Conventional methanol comes from natural gas or coal, while bio-methanol is made from biomass, such as wood waste or biogas. E-methanol is produced using green hydrogen and captured CO₂, making it a climate-neutral fuel.
In addition to Shell, Hapag-Lloyd is also working with other energy partners, such as Goldwind, to secure access to green methanol, which represents another important component of the multi-fuel strategy that is preparing the company for a sustainable future.
However, achieving cleaner shipping isn’t something that Hapag-Lloyd and fuel suppliers can do on their own. Strong partnerships are also needed even further along the supply chain – namely, with customers who are committed to using alternative fuels. Many of Hapag-Lloyd’s customers are already doing so through Ship Green and the Zero Emission Maritime Buyers Alliance (ZEMBA). And the company continues to try to persuade even more customers to choose climate-friendly transport options and thereby help to accelerate the industry’s transition toward decarbonized shipping.
Maintaining the momentum
Despite the postponement of the NZF, Guntermann sees one silver lining. “We can’t allow ourselves to become pessimistic now,” he explains. “This postponement is also an opportunity – namely, to further refine the proposal, to build more consensus, and to put in place an effective, fair set of rules. What’s important is that we maintain the momentum and lead by example.”
Text by: Leon Jukka Schulz
Photos by: Hapag-Lloyd AG, Thies Rätzke Images
Video by: Shell
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