Decarbonizing the Maritime and Freight Industry: Challenges, Technologies, and Collaborative Efforts

In a recent episode of ESG Insider from S&P Global, host Esther Whieldon strives to answer the question, What will it take to decarbonize supply chains? For example, what will it take for companies to achieve net-zero goals and decarbonize supply chains — including those involved in the hard-to-abate sectors such as transportation? 

Surprise, “the answer may not always be as simple as buying renewables or using electric batteries,” Whieldon said. To learn more, Whieldon sat down with guests from several sectors – including Sarah Mouriño, Senior Director of Sustainability for DP World Americas – to explore how companies are moving from setting sustainability-related targets to figuring out how to reach those goals. 

With over two decades of experience – including leadership roles at Maersk and the International Maritime Organization – Mouriño brings a wealth of knowledge on transitioning the asset-heavy, diesel-reliant maritime and freight sector towards a more sustainable future. 

Hint: Navigating the transition to a more sustainable, low-carbon future will require collective action, innovative thinking, and strategic partnerships. 

The Decarbonization Challenge

Decarbonization is “the No. 1 thing on every sustainability agenda for every major company that operates a freight or maritime operation,” Mouriño said. “The biggest challenge that we have is decarbonization. It's a very asset-heavy industry that's highly reliant on heavy machinery that's operated by diesel fuel.” This underscores the enormity of the challenge, with port terminals and cargo logistics operations dependent on large, energy-intensive machinery.

Mouriño shed light on the formidable challenges and innovative strategies shaping the decarbonization efforts within the maritime and freight industry.  She noted that DP World’s goal of achieving net-zero emissions by 2050, with interim targets for 2030 and 2040, demands a radical overhaul of existing technologies and fuel sources. This includes aggressive testing and deployment of alternative technologies, as the company aims for large-scale transformation.

Pioneering the Zero Emission Port Alliance

A significant step forward is the formation of the Zero-Emission Port Alliance, announced at COP 28. This collaborative effort, announced in partnership with APM Terminals, is designed to bring together equipment manufacturers, port authorities, terminal operators, and other stakeholders to figure out, “How do we create these technologies, how do we deploy them at scale, and what is the tipping point that we all need to get to in order to make this a reality for our industry?” Mouriño said. The alliance seeks to harness the industry’s collective expertise and resources to overcome technological hurdles and achieve scalability.

Electrification and Hydrogen: The Dual Pathways

Battery-electric solutions and hydrogen are being held up as promising pathways to decarbonization. This focus highlights the industry's multifaceted approach. While electrification offers a direct route to reducing emissions for smaller equipment, the challenge of powering larger machinery with batteries remains. Hydrogen, with its higher energy yield, appears more suitable for heavy-duty applications, though questions about production, infrastructure, and environmental impact persist.

“Each solution has its pros and cons,” Mouriño said. “ So it's not clear yet as to which one is going to work out the best, and neither of them is a silver bullet solution.”

Industry-Wide Priority

Decarbonization is not just a DP World agenda but a sector-wide imperative, dominating sustainability discussions across the freight and maritime industry. The complexity and cost of transitioning away from diesel, coupled with the longevity and investment associated with heavy machinery, make this a daunting task. Yet, the potential for efficiency gains and cost savings through improved supply chain utilization presents a compelling case for innovation and investment.

Looking Ahead

As the industry grapples with these challenges, the journey towards decarbonization is characterized by experimentation, collaboration, and a relentless pursuit of efficiency. The dual focus on technological advancement and operational optimization underscores a holistic approach to sustainability, with the ultimate goal of harmonizing economic and environmental objectives.

For more insights into decarbonization, listen to the full podcast at ESG Insider from S&P Global.