“If the international shipping sector were a country, it would be the sixth largest CO2 emitting nation in the world,” notes a Climate Now podcast detailing the enormous impact and opportunity we have to transition the sea freight industry to a more sustainable future. How could we do it?

A complicated set of rules and regulations govern commercial ships —  everything from the punishment of crimes committed in international waters to fuel efficiency. The International Maritime Organization, a branch of the United Nations, requires that ships must be registered in a country and fly that nation’s flag. The country of registration dictates the legal and tax-related criteria for their ships. 

How many commercial ships carry the American flag? According to the U.S. Department of Transportation, the highest historical percentage of the international trade fleet flying the American flag was 92.5 percent. However, the high number of U.S.-flagged ships was in the year 1826. As of 2010, the number was down to 2 percent. At the time of the report, “no U.S.-flag carriers [were] listed among the top 20 global carriers.”

The term “flag of convenience” is the acknowledgment of a well-known international loophole on the high seas. If a company registers a cargo or cruise ship in the Bahamas, a common example, the shipowners stand to save an enormous amount of money compared to the same registration in the United States. 

A 2010 testimony to the House of Representatives detailed some of the specifics. At the time, it was roughly three times more expensive to flag a ship in the United States. If you fly an American flag, you must operate with a U.S.-based crew. If you repair a U.S. ship in a foreign port, there is a 50 percent duty on the repair costs. Insurance costs are four to five times higher in the United States. 

Additionally, from a legal liability standpoint, crimes occurring more than 12 nautical miles from the shoreline of a country default to the jurisdiction of the flag, which could be less costly or complex to navigate than the American judicial system. 

Sea freight policy is a major issue because we use a lot of sea-freighted goods in North America. “About 80 percent of all the goods we use or consume reach us by ship,” notes the Climate Now podcast. Yet, the United States has limited power to regulate or incentivize major shipping companies to make changes if they fly other flags. 

Renewable Energies Shift

An important sustainability note here is that 40 percent of the cargo carried on these international ships are fossil fuels, according to Bryan Comer with the International Council on Clean Transportation, speaking on the Climate Now podcast. Two out of every five cargo ships across the globe use fossil fuels to transport fossil fuels. 

To make matters worse, if ports are congested, tankers burn fossil fuels to keep the engines running while they bob in the harbor, waiting to deliver the fossil fuels. 

A shift to renewable energies in all countries will ease this burden, but it won’t be a seamless transition. As fossil-fuel prices increase, companies will ship them longer distances and remain profitable. 

All is not lost. While 95 percent of sea cargo uses fuel oil or diesel to power internal combustion engines, technological advances can help. Most of the emerging technologies relate to fuel switching. The manufacturers and logistics groups moving the goods around the world win when it costs less to cross an ocean. They have a competitive motive to cut costs on energy expended. 

Batteries could power ships. Following the model of passenger cars, there is enormous potential here. The downside is the power density of current batteries is worse than fuel oils for the longest trips across the ocean. This means the ship’s cargo area would be reduced to accommodate the batteries, leading to less cargo per trip. 

A Nature.com report finds that ocean routes less than 900 miles are the best candidates for electrification to keep battery space low and allow for frequent recharging. 

Parafoil sails are a great mix of old and new technologies. Unlike the flat cloth sails of yesteryear, these devices are more of a steerable kite. Sky Sails Marine developed a test system that flew 300 to 900 feet above the ship, surpassing the wind boundary layer around the earth’s surface for better efficiency. Wind-only ships are not the most likely path forward, but wind-assisted ships could make a significant impact. 

The easiest alternatives to displace fuel oil and diesel are other liquid combustibles. A Reuters article mentions some of the alternatives under development to reduce the carbon footprint of shipping. Ammonia could power 45 percent of cargo ships by 2050. Green methanol is being tested by some of the largest shipping corporations in the world. 

Hydrogen is also an option but requires specific, cold-temperature storage. As my December 2023 column mentioned, green hydrogen is the only game-changer in this category. Most hydrogen is processed with fossil fuels and not renewable energy, so it is just a different way to package natural gas or coal power.

The easy answer is to drastically reduce emissions: slow down! In the same way gas mileage in a passenger car gets exponentially worse over a certain speed, cargo ships traveling above 14 knots start to see a drastic increase in fuel consumption daily. If ships slowed down from a typical speed of 20 to 24 knots to 18 to 20 knots, more than 33 percent of fuel could be saved. 

In summary, two major questions can foster the biggest improvements in sea freight sustainability: 

1. Are we willing to wait a little longer for the freight we order? 

2. How can the globe’s citizens fight the flags of convenience that circumvent important policy?

There isn’t one technology to offset fuel oils and diesel. We can use greener fuels, batteries and wind to change the way we ship products across the world. As fossil fuels become scarcer and we ship more, we hold out hope that the greener options will become the better financial choice. The least expensive energy to move a ship across the ocean will outweigh many of the loopholes presented by the flags of convenience.