As we begin 2025, it’s likely that this year we’re going to continue to see further discussion around various sustainability and emissions reduction initiatives, including within the global supply chain.
With this in mind, it’s clear that Australia’s shipping and logistics sector – and indeed businesses more broadly – have an opportunity to cherry pick sustainability initiatives working successfully in other countries and apply them here.
Sustainability initiatives more broadly appear to be gaining momentum now compared to just a few years ago, and I think we can expect to see that continue to increase as we approach the 2030s.
The European Union’s Emissions Trading System was expanded to include shipping as of 2024, which has meant vessels have to track and report emissions linked to EU ports and has seen restrictions on certain types of vessels.
We’ve seen the installation of bow wind shields on Ocean Network Express vessels, and the use of wind technology by Eastern Pacific Shipping, which are strong examples of emissions-reduction initiatives that have the potential to be adopted more broadly.
Of course, it’s important to highlight that the industry is still assessing how these measures work and the full extent of impact, but certainly different ideas are currently being looked at by various shipping companies, and I would argue the sector is interested in the outcomes.
While the Federal Government is continuing to finalise a Maritime Emissions Reduction National Action Plan, as part of the broader Transport and Infrastructure Net Zero Roadmap and Action Plan, an opportunity exists for us to assess what sustainability measures are working well in other countries, and potentially bring the best ideas here.
There are several measures worthy of greater discussion;
- Wind Technologies: Bow wind shields, sails and flettner rotors are just some examples of wind-based technologies being installed on shipping vessels to reduce fuel consumption and reduce emissions.
- Alternative Fuels: The industry is continuing to look at the use, viability and accessibility of various alternative fuels, including LNG, biofuels, low-sulphur fuels and hydrogen.
- Electric Vehicles: With Australia heavily reliant on truck movements, reducing overall supply chain emissions will require a reduction landside, too. The world-first on-dock battery-swapping station for electric trucks at Yantian Port is aimed at improving the efficiency of electric fleets, and he’s interested to see how the initiative operates longer term.
- Alternative Marine Power: The practice of using shore-based power instead of a ships engines while in port, AMP offers the potential to reduce vessel fuel usage and therefore emissions. Ocean Network Express recently demonstrated shore power for a container ship at Ningbo Port, the first time it had been used in China.
Australia currently has a legislated emissions target of 43% below 2005 levels by 2030, as part of the broader policy to reach Net Zero by 2050.
But, with no strong mandate to reduce emissions as yet, adoption of sustainability measures are often driven by cost.
While I think businesses and consumers broadly want to do more to reduce emissions and be more sustainable, in reality it can be an expensive exercise and the cost of introducing new emissions-reducing measures will ultimately be worn by the consumer in the form of levies and allowances.
With inflation, interest rates and cost-of-living still very much front of mind, businesses are hesitant to introduce measures that will push up prices.
However, I maintain there is still an opportunity for Australia.
Some of these measures have now been in place overseas for years. They’re tried and tested. We have the chance to take what’s worked well and introduce them here, and potentially start making a bigger impact, sooner.
