The deepening climate emergency for Pacific domestic shipping supply chains and what can be done

By Peter Nuttall*

Opinion - The domestic maritime connectivity of the micro-states of the Pacific islands is a unique and largely overlooked dimension of shipping supply chains.

The Covid-19 pandemic proved beyond any doubt that shipping is the absolute lifeline of Pacific small island states. Survival is not possible without shipping for societies completely dependent on imports of all fuel, most food and virtually every other essential commodity.

Once the world's greatest navigators and seafarers, Pacific Islanders are entirely dependent for transport security on externally owned and operated international liners. The domestic service providing essential last mile connectivity within each state is substandard and in crisis, often in extremely poor repair with a vicious cycle of old ships replaced by old. There are two additional major barriers to add to this already grim scenario:

• The Pacific is already the most dependent region on imported fossil fuels at the highest prices and is likely the hardest region to transition to any alternative energy source.
• These oceanic States are the first collateral damage in a deepening global crisis not of their making and beyond their fiscal capacity to respond or adapt.

Possible solutions

Since 2015, an alliance of Pacific states that have been pressing for the International Maritime Organisation (IMO) have proved catalytic to greatly increasing the levels of ambition to full decarbonisation around 2050, including introduction of greenhouse gas (GHG) pricing and a commitment to contributing to an equitable transition that leaves no State behind.

In what is being termed a 'trillions transition opportunity', IMO is committed to implementing economic and technical measures to achieve this ambition by 2027, with member states negotiating a price in shipping GHG emissions from proposals ranging from a low price of USD 20/ton/CO2 equivalent to the most ambitious call for a universal flatline GHG levy with an entry price of USD 150/ton/CO2-equivalent that would generate upwards of USD 100 billion in annual revenues into a dedicated IMO fund. The revised IMO Strategy sets three primary objectives that the use of these revenues will need to achieve: promoting the energy transition; incentivising the fleet and contributing to a level playing field; and a just and equitable transition.

The alliance of high ambition Pacific states is also attempting to design a bespoke solution with the Pacific Blue Shipping Partnership (PBSP). The PBSP is a call for an initial US$500 million investment spread over a group of countries to allow a coordinated program of change to be built.

The PBSP recognises that a complete revolution is needed in technology and fleet management and operations, as well as financial investment and program delivery away from existing structures. The Pacific's minute size and high commercial risk means that there are no economies of scale to allow any access to maritime investment finance and insurance.

Full regional decarbonisation of shipping at the scale required is thought to require an investment of more than US$10 billion into this sector and will ultimately need to be accompanied by a shift to as-yet-unknown future fuels. This transition is beyond any national capacity to resource.

The blue-water ships servicing much of the Pacific's domestic routes are small by international scale (under 5,000 gross ton, most less than a 1,000 ton). But this scale, combined with the plentiful wind power in many Pacific countries, allows for innovative new designs for wind-assisted ship propulsion capable of achieving up to 80 percent improved efficiency with known technologies.

An example is Ae Juren, the 48 metre Marshall Islands Shipping Corporation general service vessel being commissioned currently in a small yard in South Korea. This vessel is the result of German development funding and academic collaboration with local researchers and demonstrates proof of concept of the fuel efficiency achievable at Pacific scale using wind, innovative hull design and ancillary systems.

Locally-led research has identified a range of available technologies that can be harnessed to meet the Pacific's ambitious targets. Flettner rotors are obvious candidates for a large percentage of the international and local tanker and bulk cargo fleets, with modern design retrofits offering around 20 percent saving potential and newbuild designs considerably more.

Re-invigorating traditional sailing knowledge is key to revitalising small sail hybrids for local village use. Technologies like Wing-in-Ground craft are potential game changers.

Failure to undertake the transition now will see the same states increasingly disadvantaged by their ongoing diesel dependency. Globally, full decarbonisation of all sectors is the only available option for addressing the climate emergency.

However, this transition, while essential, is beyond any national capacity of Pacific SIDS to resource or sustain in the foreseeable future.

A longer version of this article has been published by Melbourne Asia Review, Asia Institute, University of Melbourne.

*Peter Nuttall is the Scientific and Technical Advisor at the Micronesia Center for Sustainable Transport based in the Marshall Islands. Since 2013 Dr Nuttall has led the development of a multidisciplinary research and teaching programme to underpin transition to low carbon sea transport for Pacific Island countries.