The European Green Deal: what does it entail for the shipping industry?

The future is green: the European Green Deal (EGD) is set to accelerate the future further, with regulations impacting different industries, including shipping. How is the industry responding?

Needless to say that the world is choking due to carbon pollution. To avoid deteriorating the environment further, and its effects on human health and biodiversity, decarbonization is essential. 

The European Commission has recently launched a "Green Deal," with the ambitious goal of reducing Europe's emissions by at least 50 percent by 2030 and transforming its economy to become carbon-neutral by 2050. 

The deal consists of a comprehensive, sustainable green transition plan based on substantial cuts on carbon emission and the adoption of cleaner energy sources and green technologies. The Green Deal is an opportunity for Europe, mainly if it enables the EU's industries to benefit from a new growth strategy that will boost their competitiveness while becoming more sustainable. 

Most freight transport organizations in Europe welcomed the Green Deal strategy, too, that was outlined in September 2019 but have tempered their support with some concerns and suggestions on the way forward.

In a joint statement, these organizations agree that meeting the goals of the EGD's strategy will require significant investment in research and development, with an "appropriate" transport infrastructure budget and innovation fund. In particular, the statement underlines the importance of more aligned and transparent sources of funding accessible for all parties in the transport system.

A holistic approach to technological innovations, alternative fuels, and transport infrastructure across all modes of transport will be significant since the choices for one mode of transport may impact others.

The statement also warned that a factor determining the Green Deal's success would be the EU's ability to convince non-EU countries to move in the same direction. They said there could be no "level playing field" without an aligning of environmental policies.

Another critical factor is the need for an overarching view of logistics and supply chain planning and control, in which shippers and their service providers would collaborate to improve efficiency. The organizations agree that a better-integrated transport system rather than standalone transport modes is required.

A carbon-neutral supply chain depends on manufacturers and logistics providers combining rail, road, short sea shipping, inland waterways, and air transport smartly and efficiently. They also need to find a balance between the different transport modes, warehousing, and inventory levels to satisfy their objectives while meeting the service levels required by their customers.

Learn more about the EGD here.

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