India will shop for a flexible agenda for shipping at COP 28

On the next round of the experimental global voyage of the container ship powered entirely with “green methanol” fuel, a landing in India is quite possible, said government sources aware of the developments. 

The first such journey in the world, by shipping liner Maersk, was made from South Korea to Denmark this year. The voyage attracted attention as a valid demonstration project of what the shipping industry intends to do to reduce greenhouse gas emissions, which are about 3 per cent of the total global emissions. 

An announcement about India’s intention is possible around COP28, the annual intergovernmental meeting of the United Nations Climate Change Conference, due to meet from the end of November for about a fortnight.  

The possible landing of the container ship shall signal the importance India attaches to the targets for the greening of the shipping sector and larger maritime sector. The government faces a difficult choice reconciling those with its plans to expand the footprint of Indian shipping and ports, similar to that of many other sectors. 

Differing priorities:

How fast should the ports and shipping sector move to attract new investments while at the same time ensuring there is no environmental backlash? The challenges were evident at the recently concluded Global Maritime India Summit. At the biannual event, held in Mumbai, the emphasis from the Indian side was on demonstrating the investment possibilities, while the partner countries, mostly European, wanted to engage on green issues. 

Andreas Nordseth, Director General of the Danish Maritime Authority, who spoke at the summit, was emphatic about the role of methanol as the fuel of choice for ships in the future. Green methanol is produced from green hydrogen and captured carbon dioxide. Denmark is positioning itself as the leader in green methanol technology and wishes India with its expanding shipping agenda. 

Before going there, for this decade, India instead wanted to become a hub to produce green hydrogen for the shipping sector. Sarbananda Sonowal, minister for ports, shipping and waterways, has said, “the ministry has already identified Paradip Port, Deendayal Port and VO Chidambaram Port to be developed as Hydrogen Hubs - capable of handling, storing and generation of green hydrogen by 2030. With the development of these infrastructure, India can export Green Hydrogen, produced in the country using renewable sources”.

Whether to turn to green ammonia or green methanol after that is a question Indian planners will seek to venture once they reach there. RK Singh, minister for power, has recently said, “We have to emerge as a refuelling destination for all green ships since we can provide them with green hydrogen or green ammonia or whatever fuel they want at the lowest cost”. His stance makes sense. India would wish to reach the competitive hydrogen price target of about Rs 100 per kg soon, which can then be used as the preferred raw material for ships. He foresees that world shipping will go hugely green within around 10 years.

Investment policies and green questions:

While all these things happen, India will not want the sector to be pried open further on the green challenges. Indian shipping, after decades of neglect, is just getting its act together. According to CareEdge data, the total count of Indian crude, product, dry bulk, container and gas carriers at 1520 is just 2.6 per cent of the global merchant navy fleet as of 2022. The numbers will take time to climb, even slowly, despite the incentives offered by the government. For instance, the union cabinet has offered a Rs 1,624 crore subsidy over five years to promote Indian shipping companies to compete in global tenders floated by government ministries and state-owned companies. 

The country has also pointed to the challenge of ship recycling rules. India has a target to double ship recycling capacity by 2024 to capture about 50 per cent of the share of the market from about 30 per cent, at present. To support this goal, India has passed the Recycling of Ships Act and acceded to the Hong Kong International Convention. But the European Union has hardly budged on what it considers fair practice on ship recycling standards. The concern was pointed out by TK Ramachandran, secretary, Ministry of Ports, Shipping and Waterways, at the Global Maritime India Summit. 

India has also signed on to the International Maritime Organisation’s first global stocktake issued in July this year. The operative paras note, “IMO remains committed to reducing greenhouse gas emissions from international shipping and, as a matter of urgency, aims to phase them out as soon as possible while promoting, in the context of this Strategy, a just and equitable transition”. The ambitions are to reach at least 5 per cent, striving for 10 per cent of the energy used by international shipping to be zero or near-zero greenhouse gas emission technologies, fuels, by 2030. The ambitions for the next decades are much higher but it is this decade that counts.

As of now, India will, therefore, want the discussion around the role of the shipping sector at COP 28 to be in broad terms, allowing for signalling like the early voyages of green methanol ships rather than get into details of respective shipping investment policies. It will let the Ministry of Environment and Forests lead the discussions for a sustainable and environmentally responsible future at the Dubai edition of COP 28. In the maritime sector, therefore, other maritime issues like the blue economy, including fishing and preservation of coasts which, will be discussed threadbare.