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How Congress aims to reduce carbon emissions in shipping

‘We must face the fact that we are at a tipping point in the climate crisis,’ says Rep. Lowenthal

Legislators this week introduced the Clean Shipping Act of 2022, which if passed, would amend the Clean Air Act to establish standards that limit the carbon intensity of fuel used by certain vessels.

The bill aims to protect the port communities’ health, address environmental injustice and bring climate solutions to the table.

“We no longer have the luxury of waiting to act,” Rep. Alan Lowenthal, D-Calif., one of the sponsors of the bill, said in a statement. “This legislation will set clear standards and drive the investment and innovation we need to transition to a zero-carbon future. … This bill is the right policy for the future of our planet, for the health of our communities and ultimately for the resiliency of goods movement.”

The act would require the carbon intensity of the fuel used on covered shipping voyages to be:

  • At least 20% lower than the baseline (2024) for calendar years 2027 through 2029.
  • At least 45% lower than the baseline in 2030 through 2034.
  • At least 80% lower than the baseline in 2035 through 2039.
  • 100% lower than the baseline in 2040 and each year after.

All vessels of 400 gross tonnage or more that move passengers or cargo for commercial purposes that use ports under U.S. jurisdiction are considered “covered voyages.” But any vessel that operates on covered voyages for 30 days or less during a calendar year is exempt from the standards for that year.

Vessels that lower emissions intensity more than is required for a certain year may be allowed to credit that amount to a year in the future.

“The shipping industry has made strong commitments to reduce emissions, so a bill like this underscores the importance and makes sure that it’s not just industry leaders making commitments but that it is the whole industry being held to the right standards,” said Danny Gomez, managing director of financial and emerging markets at FreightWaves.

It’s important to have legislators putting ideas on the table for how to decarbonize shipping, John Butler, president and CEO of the World Shipping Council (WSC), told FreightWaves. “This bill is not going to solve the problem, but it’s a good start to a discussion.”

Butler said the bill reinforces the fundamental challenges in getting to very low or no greenhouse gas emissions in the marine sector. The industry needs “massive investments in new fuels from fuel suppliers.”

Those new fuels will largely rely on green electricity. Extensive infrastructure and supporting investments will be required to make fuels such as e-ammonia or e-methanol available at large scales.

“The bill doesn’t do anything to address that need. It addresses a very small part of the overall picture. It essentially expresses a desire to reach a particular endpoint, but it really doesn’t have a pathway for getting there,” Butler said. “It’s not enough simply to say, ‘Well, this has to happen.’”

This bill may be part of a broader solution, but it will not solve the problem by itself, he added.

Read: Report: Climate change could cost shipping industry $25B annually by 2100

Feasibility of reaching standards

If the administrator of the Environmental Protection Agency determines that reaching the thresholds for lower carbon intensity is not technologically or economically feasible, it will declare a new standard that will “achieve the maximum reduction in the carbon intensity of the fuel used by vessels on covered voyages that is technologically and economically feasible” for that year.

Health, safety and environment impacts would be taken into account in determining technological and economic feasibility of carbon intensity reductions.

No one knows when sustainable fuels will be feasible for the shipping industry, Butler said. Some of the most promising fuels right now are not drop-in fuels. They require completely different containment systems and infrastructure.

“We really need very aggressive and very detailed energy policy coming from governments and from international organizations so that the private sector … can then take those economic and regulatory signals and have the incentive to actually invest to produce the fuels and the technologies that are needed,” Butler said.

Though the maritime sector uses a large amount of fuel, Butler said it’s not enough to trigger the energy industry to produce the needed fuels.

“The Clean Shipping Act of 2022 is bold legislation that will make the U.S. a global climate leader in addressing pollution from the shipping industry and protect the health of port communities in Los Angeles and around the country,” said Rep. Nanette Barragán, D-Calif., co-sponsor of the bill.

Each year, vessels will be required to report:

  • The carbon intensity of the fuel used for each covered voyage.
  • The amount of fuel used for each covered voyage.
  • The total greenhouse gas emissions measured in carbon dioxide equivalent for all covered voyages.

“We must face the fact that we are at a tipping point in the climate crisis; we must move beyond fossil fuels and that includes air, land and sea transportation sources. No emissions sources can go overlooked,” Lowenthal said.

The EPA administrator will develop a list of accepted methods for monitoring and reporting aligned with those used by the European Union and the International Maritime Organization.

If the IMO mandates carbon intensity of fuel reduction standards that are more stringent for a certain year, the administrator may adopt those standards. That part of the bill is key.

Butler said the WSC is pushing for a global solution because “if we’re not all pulling in the same direction and pooling those resources, it becomes much harder to come out in the right place.”

“We must face the fact that we are at a tipping point in the climate crisis; we must move beyond fossil fuels and that includes air, land and sea transportation sources. No emissions sources can go overlooked.”

Rep. Alan Lowenthal, D-Calif.

No later than six months after each annual reporting period, the EPA administrator, in consultation with the secretary of transportation and commandant of the Coast Guard, will publish a report including the carbon intensity data of fuel used for voyages that year along with other data.

“Knowing that emissions from heavy-emitting sectors like shipping impacts the environment is not new. What is new is public recognition and support that we must act now to ensure we immediately slow down and ultimately eliminate emissions,” Gomez said.

Editor’s note: This article has been updated to include comments from the World Shipping Council.

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One Comment

  1. The best way to reduce shipping emissions is to reshore/localize. About 30% of what is imported from China can be sourced here more profitably if companies use total cost instead of FOB price as a decision metric. See reshorenow.org.

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Alyssa Sporrer

Alyssa is a staff writer at FreightWaves, covering sustainability news in the freight and supply chain industry, from low-carbon fuels to social sustainability, emissions & more. She graduated from Iowa State University with a double major in Marketing and Environmental Studies. She is passionate about all things environmental and enjoys outdoor activities such as skiing, ultimate frisbee, hiking, and soccer.