SSI: Green Steel Could Be Added to Decarbonization Targets
The Sustainable Shipping Initiative (SSI) has published a green steel and shipping report calling for circularity in shipbuilding.
Steel is the primary shipbuilding material, making over 75% of a vessel by weight, and the steel industry is responsible for 7-9% of global GHG emissions. Addressing steel emissions is critical to decarbonizing across the ship lifecycle, says SSI, and provides opportunities for collaboration with the steel sector and other steel demand sectors.
The report identified drivers and barriers to closing the loop on steel in shipping, including the challenge of scrap steel supply, growing regulation around sustainability and emissions reporting, as well as the potential for tools, such as material passports, to enable demand and uptake of green steel in shipping. Market-based measures already being discussed and developed, such as carbon pricing and a voluntary carbon market, have the potential to accelerate progress by creating financial incentives for green steel.
Climate-aligned finance agreements, such as the Poseidon Principles and the Sustainable STEEL Principles, can help lenders set GHG emissions reduction targets for their portfolios and support decarbonization action within the steel and shipping sectors. The EU is leading the way on carbon pricing through the EU ETS, which will include both steel and shipping and motivate action to decarbonize both sectors. A carbon price set by the IMO would similarly encourage rapid action on decarbonization, states the report.
Demand is growing from SteelZero signatories, which include shipowner A.P. Moller-Maersk and CIMC TCREA (the steel buying division of container manufacturer CIMC) commit to using 50% lower embodied emissions steel by 2030. Nicolò Aurisano, Sustainability & LCA specialist, A.P. Moller-Maersk, said the company's ultimate goal is to use 100% net zero steel by 2040.
Amelia Hipwell, Decarbonisation Innovation Manager, Lloyd’s Register Maritime Decarbonisation Hub: “Ensuring the availability of more sustainable materials in shipbuilding will play a key role in facilitating shipping’s energy transition. By embedding key circularity principles into the way design and build of ships are evaluated, and tracing the origin and type of materials during the construction, we have the opportunity to rethink material flows within a ship’s lifecycle and how they are inter-connected with other sectors. This enables us to collaborate with broader circularity efforts across the maritime value chain to achieve GHG reduction and decarbonization targets for the industry.”
