Executive summary

The maritime
shipping sector
facing the challenges of decarbonization anddigitalization

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The maritime shipping sector facing the challenges of decarbonization and digitalization

Maritime shipping, the transport of freight and goods via waterways,
has been growing for several years, and accounts for most of theworld’s freight transport. Although it is one of the least carbonintensive modes of transport, the sheer volume of goods transported(80% of the international merchandise trade) and the fact that fossil
fuels are still overwhelmingly used mean that the sector accounts fora significant share of global Greenhouse Gas (GHG) emissions (2.9%)
and is projected to increase by 90-130% by 2050 under a businessas-usual scenario. To address the challenge of decarbonization, in
2023, the International Maritime Organization (IMO) adopted a revised
GHG strategy including a common ambition to reach net-zero GHG
emissions by or around 2050. Prior to that engagement, in November
2022, the Science-Based Target initiative (SBTi) released a specificguidance for the maritime transport sector with even more ambitious
goals.
What’s more, the sector is highly concentrated, with a few influential
players controlling most of the volumes transported. Althoughthese players’ climate commitments are currently reduced andheterogeneous, it is possible to drastically reduce emissions by getting
them to commit and to act concretely towards the decarbonization of
their businesses. Their commitment should rely on the quantificationof well-known shipping decarbonization levers.
This executive summary is an excerpt of the whitepaper on “themaritime shipping sector facing the challenges of decarbonizationand digitalization” elaborated by Atos and WWF France.
In this report, we identify the challenges, trends, and exploring on
how digitalization can help to accelerate the decarbonization of themaritime shipping sector.
For the complete white paper scan the QR code:2

The maritime shipping sector facing the challenges of decarbonization and digitalization

Maritime shippingand decarbonization
trajectories
The freight sector has progressively become of
the largest economic sectors of the 21st century.
Indeed, between 1950 and 2020, the volume ofglobal trade has grown by 4,100%. Freight andlogistics reached a value of $8.6 trillion in 2020, andshipping as a transportation mode, dominates theworld freight sector.

The energy required to transport goods is an essential
element in understanding the impact that each of thedifferent modes of transport has on climate change.
Figure 1 compares the climate impact of the freighttransport modes in terms of intensity, i.e in kilogram of CO2
equivalent emissions per t.km of good transported.

Emission factor in kgCO2/t.km
Maritime

Average 100 - 200,000t
Cargo/< 10 000 t/HFO-MGO
Containers 27,500t

0,00875
0,0191
0,0453

Rail

Rail in Europe

0,0226

FluvialPusher 2300t
Self-propelled 600 - 1000t

0,0662
0,105

Road

Trucks in World

0,153

Air

>100t > 3500kms wo contrails> 100t > 3500kms w contrails> 100t <500kms wo contrails> 100t <500kms w contrails

0.591

1,08
1,9

3,47

Figure 1: Comparison of the climate impact of different modes of transport for freight.
Source: I Care from the Base Empreinte ADEME.

In the shipping sector, big international actors
have emerged concentrating the biggest partof the market. Three segments - bulk, tanker,
and container - account for approximately 90%
of global volumes and 65% of GHG emissions.
Regarding the containers segment, there are morethan 500 shipping companies in the world and the
top 10 companies control 84% of the total transportcapacity. However, almost 60% of the transportcapacity in controlled by only four key players: MSC,
Maersk, CMA-CGM and COSCO.
Although essential for understanding the shipping
sector’s climate impact, accurately tracking its
emissions is difficult for several reasons, including
differences in the scope of emissions considered, inthe vessels’ lifecycle, and the absence of data.

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Institutions and public authorities have gradually
introduced measures to monitor and mitigate the GHG
emissions from the shipping sector. In Europe, the legislative
package “Fit for 55” aims at reducing emissions in Europe by
55% in 2030 compared to 1990. It has adopted two specificdecarbonization levers for shipping, namely targeting shore
power supply and reducing of the GHG intensity of theenergy used onboard.
Since a few players are responsible for a large share of the
global fleet, their commitment to align their emissions with
the Paris Agreement targets would have a massive impact
on the total emissions of the sector. Indeed, as illustrated
on Figure 2, even if only a third of the container shipping
companies had set ambitious targets, this could resultin 64% of the shipping container trade being powered byclean fuels.

The maritime shipping sector facing the challenges of decarbonization and digitalization

Figure 2: Shipping industry leader’s published ambitions.
Source: Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping.
The shipping sector is in the early stages of collecting and using GHG emissions data and of reducing emissions.
However, things have progressed recently as some of the biggest companies have already made strong
commitments.

Key messages:
There is not enough commitment from the sector’s stakeholders to ensure the achievement of global targets tocontain climate change to 1.5°C. During 2023, SBTi, IMO and the EU updated their strategy and target setting on
reducing of GHG emissions for the maritime shipping. To ensure the achievement of the global targets, market
leaders must raise their level of commitment by defining ambitious targets, quantifiable reduction pathways
and intermediate milestones.

Recommendations:
Based on the research findings, joint advocacy can help to align heterogeneity in target setting. In the maritime
ecosystem, where a small number of companies control a large part of the market, first-mover leadershipcan lead to very significant reductions in the sector’s GHG emissions, which can be followed by industry-wide
disruption. Building a bottom-up trajectory of decarbonization levers can help set the right priorities for the
decarbonization pathway.

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The maritime shipping sector facing the challenges of decarbonization and digitalization

In order to plan the decarbonization of the shipping sector and to help companies to set ambitious targets,several scenarios exist in the literature and present some differences. This study focuses on SBTi, IMO and IEA’s
decarbonization scenarios. Other sources have also been studied such as Ricardo, UMAS, DNV, CE Delft and IRENA.
The graphic below (Figure 3) details the important gaps identified among them.

ETP 2020:
SDS

NZE 2021:
NZE

Maritime
sector

IMO1
2018

IMO
2023

Concawe &OGCI 2022

UMAS
2023

DNV
2022

CE Delft
2023

IRENA
2021

1Base
year

2020

2020

2020

2008

2008

2020

2018

2022

2008

2020

2Perimeterof emissions

WTW

WTW

WTW

TTW

WTW

WTW

WTW

TTW

WTW

?

Covid
effect

No

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes











?

?

?

?

?

NZ3

NZ

NZ

-50%

NZ

-70% to-103%

NZ

NZ and-50%-28/47%+10%
to -80%

2070

2050

2050

2050

2050

2050

2050

2030

2050

3Carbonbudgetdispatch2
4–
Ambition4(in absolute)
Target year

12%3%Outdatedreports

2050

With 2030
and 2040

1

IMO 2018 has been replaced by IMO 2023

3

2

Carbon budget dispatch: is the share of shipping emission
in the global anthropogenic GHG emission supposed
to increase () or remain stable ()The ambition level is given for absolute emissions.
When there are different scenarios for a source,
the range of ambition between the most and least
ambitious scenarios is given

NZ = Net Zero

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Figure 3: Comparison of the different scenarios on selected criteria.
Source: I Care.

Most scenarios rely mainly on alternative low-carbon fuels to achieve long-term decarbonization. However,scenarios exploring short or medium-term targets tend to show that this lever will not contribute to shipping
decarbonization fast and widely enough to reach targets aligned with the Paris Agreement and especiallyintermediate milestones. Indeed, the implementation of this lever requires production capacities and specificinfrastructures that are part of a long-term vision.
Operational optimization levers are not often assessed in-depth or do not always represent an important lever indecarbonization scenarios despite their great potential in the short and medium term.

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The maritime shipping sector facing the challenges of decarbonization and digitalization

Decarbonization levers
and challenges toenergy efficiency
This report details various decarbonization levers for reducing CO2 emissions available in the shipping sector,
based on the Kaya equation.

CO2=

Transport
demand

Modal
shift

X

X

Carrying
capacity

X

Energyefficiency

EnergyX carbon intensity
Electric
Natural gas
Biodiesel
ogen
Hydr

Figure 4: The five levers for decarbonizing shipping, used in the Kaya equation emissions breakdown.
Source: I Care.
Specifically, this report concentrates on energy efficiency and operations optimization levers.

Carrying
capacity

Vessel design> 8%Power assistance

0.5 to 30%

Routing operations
Energy efficiency
andoperational levers>38%

Operationsin Terminals

Alternative fuels
BIO

NB : Numbers cannot be cumulated without considering
potential interactions between the measures.

Figure 5: The main levers and their potential to decarbonize the shipping sector.
Source: I Care based on reports from IMO, IEA, Ricardo and Glomeep.

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The maritime shipping sector facing the challenges of decarbonization and digitalization

E-fuel

Bio-fuels
Bio-gas

LNG

Energy carbon
intensity

LNG

Energy consumption
management onboard

E-fuels

Levers for shipping decarbonization

Transport demand
and modal shift

0 to 100%

Optimizing routing parameters such as speed
management and adaptation of the route toexternal parameters (such as weather conditions)can deliver significant emissions reduction.
Reducing the ship’s speed, also included in
the smart-steaming process, is a possible
decarbonization lever.
Using data management to monitor energy
consumption onboard, like electricity, lighting, airconditioning, heating, ventilation as well as otherenergy consuming equipment aboard can help
save energy, reducing emissions.
Improving terminal operations also constitutes
a lever for increased optimization in the shipping

industry. More efficient port logistics can reduce the timethat ships spend at the port, either than waiting outside
the port or at berth to discharge and charge cargoes, thus
reducing energy consumption.
Just-In-Time (JIT) arrival enables a ship to optimize its speed
to arrive at the port when berth, fairway and nauticalservices are available, limiting inefficient fuel consumption.
Nonetheless, the adoption of energy efficiency levers andoperational changes in the shipping sector can bring somechallenges, such as technical issues, financial barriers andindustry dynamics. Collaboration between stakeholders
and contractual agreements are needed to overcome
these challenges.

Key messages:
Energy efficiency and operational optimization could substantially contribute to shipping decarbonization in
the short and medium term. These improvements can be implemented quickly (compared to using alternative
fuels, which is more suitable for long term implementation), despite challenges such as interconnected
cooperation between stakeholders, technical issues and financial barriers.

Recommendations:
The proven efficiency of operational optimization levers are a critical part of the Kaya equation and should bepromoted and developed rapidly as their benefits could be realized in the short to medium term.

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The maritime shipping sector facing the challenges of decarbonization and digitalization

Contribution ofdigital technologies
to shipping
decarbonization
Digitalization enables decarbonization
solutions in the shipping industry

Decarbonization and digitalization represent
two major shifts in the way the shipping business
operates.
Digitalization empowers stakeholders to glean
insights from intricate datasets, enabling processoptimization, enhanced decision-making, andincreased efficiency. Decarbonization requires
robust emissions monitoring, vast operational andorganizational changes, and renewed strategies
from all stakeholders.

Digitalization

Figure 6: Digitalization and decarbonization areinterdependent trends in the shipping industry.
Source: I Care.

Decarbonization

Decarbonization is a major driver for
digitalizatin in the shipping industry

Digitalization refers to the process of enabling, improving and/or transforming operations, functions, processes andactivities, by using digitized data to obtain actionable knowledge with a specific benefit in mind. The digital value
chain, as illustrated in figure 7, relies on a succession of steps, each one leveraging specific technologies to deliver
the intented benefit in the end.
Sensors, IoT
Datacollection

Automation,
Robotics,
AR, VR,
Dashboards

Figure 7: Data Value Chain. In grey,
examples of technologies associatedwith the step of the digital value chain.
Source: I Care.

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Dataconnectivity

Data use

Data process andanalysisCloud, Edge
AI, Blockchain,
Big data

The maritime shipping sector facing the challenges of decarbonization and digitalization

Satellite, 5G

Digital technologies can optimize onboard energy
consumption and operation. These include
power generation via auxiliary engines, electricity
consumption for lights and equipment, heat and/or cold production, ventilation or even predictive
maintenance.
Digital technologies offer the potential forrouting optimization and autonomous ships.
Enhanced performance relies on sensors andIoT technologies that provide for the necessarydata, coupled with high-performance AI toolsthat facilitate data processing and decision
making. Edge computing can contribute to anautonomous ship’s performance by resolving someof the connectivity issues ships can encounter
while at sea and new satellite technologies canimprove connectivity in remote areas.
Shipping companies can also leverage cloudtechnology for decarbonization with more
efficient server utilization, better PuE (Power Usage
Effectiveness), and efficient and consolidated
low-carbon Data Centers locations. Migrating tocloud technology increases, by more than threetimes, the energy efficiency of the median of onpremise IT infrastructure, reduces carbon intensityof consumed electricity by 85% and has at least a
20% lower PuE than on-premise infrastructures1.
Efficient terminal operations can improvesustainability across the entire freight value chain.
With fast and secure operations, combined withessential data sharing and communication
among participants, each stakeholder can bettersynchronize to optimize their operations in a sustainable
manner, avoiding unnecessary emissions related to delays
and other inefficiencies.
It is important to emphasize that tracking and reporting
ship’s emissions is the first step in any decarbonization
strategy. Knowing the starting point of emissions andhaving measurable performance indicators is essential
for cargo owners, shipping companies and port operators.
Digital tools could be used to collect, analyze, and manage
accurate data related to GHG emissions.
The report illustrates the many ways that digital technology
can contribute to decarbonization, highlighting thepotential benefits of using sensors & IoT, satellite & 5G, cloudcomputing, edge computing, artificial intelligence andautomation.

Key messages:
Digital technologies can facilitate the deployment of operational decarbonization levers, by helping
reduce onboard energy consumption, optimize routing and terminal operations, and enable data sharing
harmonization, standardization, and transparency between market leaders to foster integration across themaritime supply chain.

Recommendations:
Digital technologies offer promising ways to address decarbonization challenges, as they can improvetransparency, data sharing and real-time monitoring, providing the necessary tools to implement energyefficient practices.
The ecosystem should leverage the benefits of digitization, and support the establishment of data standards
and data sharing, as a way to foster collaboration between stakeholders and accelerate the implementation ofshort- and medium-term levers.
Identifying use cases from similar industries and applying these to the freight sector could make a positiveenvironmental impact.

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Cloud and Net Zero. How businesses are taking decarbonization to the next level.pdf

The maritime shipping sector facing the challenges of decarbonization and digitalization

Key messages:
Attention must be paid to risks of negative externalities or rebound effects (biodiversity, wildlife corridors impact).

Recommendations:
The risk of negative environmental impacts can be limited by improving the efficiency of resources through thesystematic application of circular economy principles and life-cycle analysis approaches to decarbonizationrelated technology solutions.
When deploying decarbonization levers, particular attention should be paid to marine protected areas, wildlife
corridors or areas of particular importance for biodiversity. Just as green corridors are being considered toreduce carbon emissions, blue corridors should be protected when optimizing shipping routes to avoid noise
disturbance and ship strikes on whales and dolphins, for example, preventing disruption to marine life.

To read the full report, scan the QR Code:Key messages:
Digital technologies canfacilitate to the deployment ofoperational decarbonization
levers, by helping reduce
onboard energy consumption,
optimize routing and terminal
operations, and enable
data sharing harmonization,
standardization, andtransparency between market
leaders to foster to foster
integration across the maritime
supply chain.

10 The maritime shipping sector facing the challenges of decarbonization and digitalization

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About Atos
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