Shipping and aviation are coming under growing legal pressure to decarbonise – here’s why
While shipping and aviation have long escaped emissions regulation, these sectors are energy-intensive and need to decarbonise to meet global climate targets. From COP28 and regional regulation to climate litigation facing companies, the sectors now find themselves pushed towards sustainable alternatives like never before.
As long-established ‘hard-to-abate’ sectors, both shipping and aviation have escaped robust regulation on greenhouse gas (GHG) emissions. Despite low attention, these industries cannot go ignored: if they were a country, they would be the seventh largest emitter globally, with a greater carbon footprint than Germany. If no action is taken, carbon dioxide (CO2) emissions from these sectors may represent a combined global total of almost 40% by 2050.
But things are shifting. As the scope for their decarbonisation widens, new legal and regulatory mechanisms are coming into play to pressure international shipping and aviation to drop fossil fuels, most recently in the COP28 Global Stocktake but also in key pieces of legislation and cases of litigation of the last few years.
Taking stock on aviation and shipping emissions
Shipping and aviation came into focus with COP28’s Global Stocktake, a key lever for countries to reflect on global progress on climate action. Above all, the Global Stocktake must inform countries’ Nationally Determined Contributions (NDCs) to the Paris Agreement climate targets.
The preliminary results of the Global Stocktake highlighted the urgency to reduce emissions from international shipping and aviation. The technical dialogue also noted the lack of effective international cooperation in this regard, alluding to the insufficient adoption of emission targets from the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO).
For too long, individual states have deferred to the IMO and ICAO and avoided taking proper action on these industries. But it’s clear there is no way to reach global climate goals without including these sectors under national net-zero reporting frameworks.
While not directly referring to shipping and aviation, the final draft does point to the outcomes of the technical dialogue and encourages countries to “take into account the good practices identified” in enhancing their NDCs. As Steffi Lemke, Germany’s environment minister, says, the Global Stocktake is a key opportunity to “fully map [international shipping and aviation] emissions” and account for these at the national level.
In preparation for the Global Stocktake, the European Environment Committee passed a recent resolution calling for an end to all fossil fuel subsidies “as soon as possible and by 2025 the latest.” It also specifically calls for states “to include emissions from international shipping and aviation in their NDCs and to agree on implementing measures at regional and national level to reduce emissions from these sectors.”
All this points to the fact that international shipping and aviation emissions must be properly recognised and reduced by states. This is not up for negotiation: clearly, these industries will have to fully participate in the net zero transition for countries to meet their international obligations.
Shipping and aviation regulation is coming
Despite slow uptake, we’re seeing growing signs of regional and domestic regulation of the international aviation and shipping sectors in addition to international agreements like that of COP28.
The EU’s aim to be climate-neutral by 2050 imposes legally binding obligations on Member States to work towards a net-zero economy. It is unsurprising, then, that the EU has adopted a series of measures on the reduction of international shipping and aviation emissions as part of its “Fit for 55” package. These include the ReFuelEU aviation regulation, the FuelEU maritime regulation, and revisions to the EU emission trading system (ETS).
We’re also seeing early signs of domestic regulation, proving that unilateral action can be taken in the absence of effective international regulation:
Switzerland’s new Federal Act on the climate includes emissions from international shipping and aviation in its net zero strategy
Scotland’s Climate Change Act has included international shipping and aviation in its emissions reporting since 2010
New Zealand’s climate change commission has considered revision of its 2050 target to include emissions from both sectors
As climate target dates near and international shipping and aviation account for an increasing share of global emissions, the signs are clear: more regulation is coming. Forward-looking businesses need to act now to stay ahead of the curve.
Industry under the lens – UN scrutiny and climate litigation
While regulation catches up, there is a growing spotlight on industry actors in the international sphere.
Corporate accountability, including for inaccurate and misleading claims which amount to ‘greenwashing’ is high on the agenda, as shown by the UN Special Rapporteur on climate change’s call for inputs on the subject of corporate accountability in October this year.
Opportunity Green’s submission called out the shipping and aviation industries on their lack of consideration regarding the climate risks of transitional fuels and the resultant litigation risks that have started to crystalise. We identified the use of fossil liquified natural gas (LNG) in the shipping industry and the spout of climate litigation that has emerged against greenwashing in the aviation industry as key risks that need to be considered.
There has been rapid uptake of fossil-LNG as a transitional fuel by the shipping industry, hailed to bridge the gap between fossil fuels and green alternatives despite research showing the switch has resulted in a steep rise in methane emissions.
And aviation has its own problematic equivalent – ‘sustainable aviation fuels’ – which stand to increase overall emissions in some circumstances, when accounting for emissions from land use.
Overreliance on high-emitting fuels not only delays sufficient climate action, but endorsing the fuels as green also hinders demand reduction in consumer-facing industries, and exposes companies to legal risk for misleading consumers and investors.
Where do we go from here?
The Global Stocktake provided the opportunity to establish an international position on the reduction of international shipping and aviation emissions. Whether the technical dialogue will impact countries’ climate strategies for the next five years is yet to be seen. If we are to reach the Paris Agreement’s temperature goals, we must decarbonise these sectors – and that means acting now.
Increasingly, there’s nowhere to hide for high-emitters. The legal risks of inaction, or delaying action, are multiplying. Pressure really is mounting from all angles.
Read Opportunity Green’s submission to the UN Special Rapporteur on Human Rights and Climate Change.
