Tag: Net Zero Emissions

UN Guide will help insurers plan for net-zero transition

Solar on net-zero house. Credit: David Dodge, Green Energy Futures via Flickr CC

The United Nations published a guide designed to help insurers plan for the transition to net zero.

On 2 July, the UN convened a multistakeholder “Forum for Insurance Transition to Net Zero (FIT)”, saying the guide is tailored for insurance and reinsurance underwriting portfolios. “This new deep-dive global guide was presented at the inaugural FIT Transition Insurance Summit hosted by the European Insurance and Occupational Pensions Authority (EIOPA) at their headquarters in Frankfurt, Germany.”

According to a Green Central Banking article, “The impact of climate change on insurance markets has been systematically underestimated, with profound implications for financial stability and the sustainability of the risk-sharing services insurance companies provide.

“The European Central Bank warned in June that insurers are at increasing risk from the physical risks of climate change, which could become a source of systemic risk.”

The UN described FIT as follows: “Underwriting the Transition” provides insurance market participants—insurers, reinsurers and brokers—with a comprehensive and structured framework to help them develop and disclose credible transition plans for underwriting portfolios, addressing a significant gap in existing transition plan guidance for the insurance industry.

“This pioneering guide paves the way for insurers, reinsurers and brokers to move beyond high-level commitments by independently implementing robust and actionable strategies that enhance long-term business resilience and company value, and help achieve global sustainability goals,” said Butch Bacani, UNEP Head of Insurance and FIT Chair. By underwriting with foresight, and by accelerating and scaling up a just transition to a resilient net-zero economy, the insurance industry can lead with purpose and conviction in helping build inclusive, resilient and sustainable communities and economies, and reaffirm its role as society’s risk manager.”

“Underwriting the Transition identifies key elements of a credible transition plan and provides a checklist to assess the credibility of a transition plan. Through real-world examples, the guide demonstrates how leading insurers, reinsurers and brokers are each implementing various concepts and approaches in their underwriting portfolios that support a just transition to a resilient net-zero economy, as shared in their published transition plans. Moreover, it helps insurance market participants navigate a complex and evolving landscape of sustainability disclosure and reporting.

“It is the second deliverable of the FIT Transition Plan Project—a series of global guidance to address the current major gap in insurance-specific transition plan guidance. “Underwriting the Transition” builds on the FIT’s inaugural report, “Closing the Gap: The emerging global agenda of transition plans and the need for insurance-specific guidance”, which was launched at the 2024 UN Climate Conference (COP29) in Baku, Azerbaijan.”

The third and final FIT Transition Plan Project publication will produce holistic, “total balance sheet” transition plan guidance that links the underwriting and investment portfolios of insurance and reinsurance companies. It is scheduled to be launched at the 2025 UN Climate Conference (COP30) in Belém, Brazil this November.

At the COP29 launch event of the FIT’s inaugural report, Dyogo Oliveira, President of the Brazilian Insurance Confederation (CNseg), announced that CNseg has joined the FIT, and that CNseg will build a “House of Insurance” at COP30, which will serve as the main platform for climate ambition and action by the global insurance industry.

“As COP30 approaches, we look forward to working together with the Brazilian insurance industry, the wider insurance, regulatory and supervisory community, and key stakeholders—from policymakers and real economy actors; to the scientific and academic community, and civil society—and to making the ‘House of Insurance’ a symbol of inclusiveness, resilience, sustainability, and hope,” said Bacani.

Chaired by the United Nations Environment Programme (UNEP), the FIT currently comprises over 50 organizations from across the globe.

UNEP saif FIT “continues to deepen and strengthen its commitment to work with the global insurance industry and key stakeholders to support the acceleration and scaling up of a just transition to a resilient net-zero economy as part of the solution to the triple planetary crisis of climate change, nature loss, and pollution; and the vision of a resilient, sustainable, and prosperous future for all.”

Related recent climate change reading:
Reuters: World risks up to $39 trillion in economic losses from vanishing wetlands, report says  
World Economic Forum: Why we must roll out multiple energy transition solutions to reach net zero. https://www.weforum.org/stories/2025/07/multiple-energy-transition-solutions-to-hit-net-zero/   The Guardian: Politicians are retreating from net zero because they think the public doesn’t care. But they’re wrong.  https://www.theguardian.com/commentisfree/2025/jul/07/politicians-net-zero-public-research-climate-crisis  Rebecca Willis  		 

Decarbonizing Maritime Shipping: The PNW2Alaska Initiative

There’s an effort underway in the Pacific Northwest to make freight and cruise waterways as green as possible.

The Royal Caribbean Ovation of the Seas cruise ship leaves a port near Seattle. (Courtesy of the Port of Seattle)

Actually, the Green Corridor concept has been underway for some time.

Last May, the Pacific Coast Business Times reported the Port of Hueneme became the first U.S. port authority to sign agreements to create green automotive shipping corridors with ports and terminals in Japan and South Korea. “The partnerships we have with Japan and South Korea will help mutually grow commercial relationships with existing port clients and allow for a dynamic effort to make a difference around the globe with green shipping and development practices,” Kristin Decas, Port of Hueneme CEO and director, said in a press release.

The Port of Hueneme signed agreements to create green automotive shipping corridors between it and the Port of Yokohama in Japan and the Wallenius Wilhelmsen Pyeongtaek International Ro-Ro automotive terminal in the Port of Pyeongtaek, South Korea.

The agreements will help promote collaboration for environmentally sustainable port development initiatives and automotive logistics to transition to a zero-emission future, according to the release.

In September 2023, the Ports of Los Angeles, Long Beach, and Shanghai unveiled an Implementation Plan Outline for the first trans-Pacific green shipping corridor. Corridor features include:

  • A voluntary partnership of leading maritime goods movement stakeholders, including the Ports of Los Angeles, Long Beach, and Shanghai, with input from leading cargo owners, has developed a Green Shipping Corridor Implementation Plan Outline to accelerate emissions reductions on one of the world’s busiest container shipping routes. 
  • Plan development was supported by C40 Cities, the global network of mayors working to deliver the urgent action needed to confront the climate crisis. C40 is the facilitator of the Green Shipping Corridor, providing support to the cities, ports, and their corridor partners by coordinating, convening, facilitating, and providing communications support for the corridor’s goals.
  • Carrier partners supporting this plan intend to begin deploying reduced or zero lifecycle carbon capable ships on the corridor by 2025. 

X-Press Feeders, the world’s largest independent common carrier, recently signed a memorandum of understanding (MOU) with six European ports: Port of Antwerp Bruges (Belgium), Port of Tallinn (Estonia), Port of Helsinki (Finland), Port of Hamina Kotka (Finland), Freeport of Riga (Latvia) and Klaipeda Port (Lithuania). 

Through this MOU, X-Press Feeders and the participating ports will pool resources and expertise to develop and implement sustainable practices for maritime operations. 

Under the MOU: 

– Parties will work together to further develop infrastructure for the provision and bunkering of alternative fuels such as green methanol, 

– Encourage the development of supply chains for fuel that are zero or near zero in terms of greenhouse gas emissions 

– Provide further training programs for port workers and seafarers with regards to the handling of alternative fuels

– Leverage digital platforms to enhance port call optimization 

– Parties will have regular meetings to update and discuss progress on actions for further developing green shipping corridors. 

X-Press Feeders’ green methanol is sourced from fuel supplier OCI Global. The green methanol is made from green hydrogen and the decomposition of organic matter, such as waste and residues. OCI’s green methanol is independently certified by the International Sustainability and Carbon Certification (ISCC) Association headquartered in Germany. The ISCC system promotes and verifies the sustainable production of biomass, circular and bio-based materials and renewables.  

X-Press Feeders, which was founded in Singapore in 1972, is the world’s largest independent common carrier. X-Press Feeders operates a fleet of more than 100 vessels, calling at more than 180 ports worldwide. X-Press Feeders aims to achieve net zero emission by 2050 and be the ‘Greener Feeder Carrier of Choice’.

Green Shipping

Green shipping refers to transporting goods with as little environmental impact as possible. This may involve using advanced technology to optimize ship design, operations and performance to improve energy and fuel efficiency, prevent pollution, and reduce emissions. The concept of green shipping may be implemented already in the design phase of a new vessel, through continuous improvements or by switching to zero-emission fuels.

Switching to zero-emission fuels is gradually proceeding as more alternative fuels and engines enter the market. More shipbuilders are designing ships with green technology such as dual-fuel engines to accelerate the shift to clean fuels

Green shipping also includes training and educating staff and crew members in marine environmental awareness, including environmental policies, global requirements and compliances, ship energy efficiency, safe bunkering, oil transfer procedures, pollution prevention, garbage handling and disposal, biofouling, and ballast water management.

The International Maritime Organization (IMO) has set a target to reduce the total annual GHG emissions from international shipping by at least 50 percent by 2050. 

So, here’s the skinny on the latest green corridor, from the Port of Seattle.

The Pacific Northwest to Alaska Green Corridor (PNW2Alaska) is a collaboration among 14 organizations to create “a new era of low- and zero- greenhouse gas (GHG) emission cruise travel between Alaska, British Columbia and Washington.”

Decarbonizing this environmentally sensitive route is challenging, the port says. “Urban ports like Seattle and Vancouver can access large amounts of clean electricity to run shoreside operations and may have easier access to alternative fuels being developed. Smaller, remote ports in Alaska have more infrastructure and access challenges. Any decarbonization solution needs to work for cities, boroughs, ports, and cruise lines carrying passengers thousands of miles.”

The PNW2Alaska Green Corridor initiative considers the needs of each partner as it tests the feasibility of local solutions to decarbonize cruises in the Pacific Northwest. “One goal for all partners is that this first cruise-led Green Corridor can be an idea test bed that accelerates decarbonization at the 2,000 river and ocean cruise ports around the world.”

An aerial view of ships, boats, ferries and liners around Vancouver, B.C. (Courtesy of Vancouver Fraser Port Authority)

“No single group can achieve decarbonization. Combatting the reality of climate change takes honesty, accountability, innovation, and partnership,” said Port of Seattle Commission President Hamdi Mohamed of the collaboration. “We want to become a zero-emission port by 2050, and we need communities and industry partners to work together to meet these ambitious goals.”

PNW2Alaska was established in response to the 2021 Clydebank Declaration, a global commitment to create six green corridors on specific shipping routes by 2025, with corridors in operation by 2030, to move the needle toward maritime decarbonization at scale. Twenty-four countries took the commitment, the U.S. and Canada among them.

Next, Green Corridors, Part 2, and “elevating the future of freight.”

An exercise in futility?

No More Fossil Fuels by Joe Brusky via Flick CC

Supply chain emissions are mostly “overlooked” by corporations measuring their operational emissions (known as Scope 1 and 2), leaving a huge question mark about the ability to achieve net zero globally by 2050.

That’s a major problem, as a report from Boston Consulting Group indicates: corporations’ “supply chain Scope 3 emissions are 26 times higher than their operational emissions.” And: “Supply Chain Scope 3 Emissions continue to be overlooked, with only 15% of corporates having set a supply chain emissions target.”

Looking at this another way, 85% of businesses have no commitment to cut supply chain emissions!

That undermines the entire net zero exercise and its timeline because those blind spots drive “significant unreported risks for both investors and corporates.”

The BCG analysis examined the climate disclosures made by more than 23,000 companies through CDP (the non-profit Carbon Disclosure Project) this year, which was slso produced in collaboration with Boston Consulting Group (BCG).

For the average large, listed company, supply chain emissions will be 26 times higher than those generated in operations. The discrepancy is even higher in the retail and apparel sectors, at a ratio of 92:1 tonnes and 47:1 tons respectively.

The only sector in which supply chain emissions are equal to or less than operational emissions is fossil fuels.

“As such, having a robust plan to cut supply chain emissions should be part of any corporate climate strategy,” notes BCG.

The report says its conclusions “highlight that the challenge of effectively measuring Scope 3 emissions is widespread and spans industries,” said Sonya Bhonsle, director of strategic accounts at CDP. “Meaningful strides toward emissions reductions require corporates to evaluate their full supply chain, then raise ambition and take accountability. The first step to driving meaningful change toward a 1.5°C-aligned net zero future begins with disclosure.”

Evaluating the spectrum of all emissions is challenging and might be an impossibility. Unless all facets of the drive to net zero are factored in – and not “overlooked” – net zero cannot be achieved.

But then what is Plan B?

You can afford it!

Confusion and lack of clarity abounds when it comes to implementing a carbon tax and various decarbonization proposals and goals. It’s all a game: trying to avoid costs and even making money (at least breaking even) from emission trading systems.

Decarbonization by IRENA via Flickr CC

As one knowledgeable observer noted recently, “There is little to no appetite currently among beneficial cargo owners (BCOs) to pay up for decarbonized ocean container transport. There remains a wide variance in the emission trading system (ETS) surcharge estimates by carriers that illustrates the uncertainty over just how much the carbon tax will cost the industry.”

As Greg Knowler, Europe Editor at IHS Markit Maritime & Trade, relates in a LinkedIn post, Ocean carriers will need to comply with the European Union emissions trading system (ETS) from Jan. 1, 2024, a cap-and-trade principle that has been applied to industries in Europe since 2005 and was recently extended to cover shipping. His article continues:

“A cap is placed on the amount of CO2 that can be emitted by those within the system and companies must buy carbon allowances that cover their annual emissions. These allowances can be bought on the open carbon market or traded among companies.

“From Jan. 1, for every ton of CO2 emitted by a ship, the carrier will need to buy 1 emission allowance, called an EUA, from the carbon market. The regulation will be phased in according to a progressive schedule over the next two years. In 2024, carriers will be charged for 40% of all emissions, 70% in 2025 and 100% of emissions after 2026.

“Half of journeys that begin or end outside the EU will be covered by the ETS, and all the emissions from voyages between ports in the EU and while alongside will be covered.

“There are significant costs involved for carriers. According to emissions monitoring platform OceanScore, the maritime industry in 2022 generated CO2 emissions of 126 million tonnes from voyages to, from, between and within European ports. That would have resulted in the need to surrender 82.7 million EU Allowances (EUAs), or carbon credits, under the ETS, equating to a total cost of €6.5 billion based on the current price of €78 per EUA.  

“Hapag-Lloyd CEO Rolf Habben Jansen has estimated the ETS will cost Hapag-Lloyd $100 million in 2024, with that amount tripling in the next couple of years, and he has vowed to recover those costs from customers.”

Knowler quotes Jansen: “The initial cost is there, and we will not absorb the cost, It is real and is a fully out-of-pocket cost and people must accept it. We talk about $100 extra per container, and if you look at the value of the goods that are inside, people should be able to accept that.”

Knowler writes, “It will become harder and harder for the carriers to absorb the ETS costs as they get phased in, and as the free emission allowances across all industries gets phased out and compliance gets progressively more expensive…this is the way the system has been designed. The ETS is supposed to make it more expensive so those in the shipping industry are forced to use greener fuels and services to enable the European Union to be climate neutral by 2050.”

That last concluding bit is the point of this complicated and ultimately frustrating exercise. The bottom line is that no one wants to pay for the cost of climate change except those that can’t afford it. Climate change will exact its own high costs for everyone on this planet sooner or later.

The thing about net zero emissions and decarbonization is that while intentions are well meaning (or not) companies, especially those that use fossil fuels, don’t want to pay. God forbid that their margins and profits might decrease if they implement net zero net zero actions. Better to protect shareholders than the climate. It’s disgusting, shortsighted, and deadly,

This is the real bottom line: Do the right thing. Take the financial hit for the good of the planet! You can afford it!

California Grants Target Big Bucks for Net-Zero Efforts

The California State Transportation Agency (CalSTA) this month announced $1.5 billion in grants as part of efforts to build a “more efficient, sustainable and resilient supply chain.” The program includes approximately $450 million for zero-emission infrastructure, locomotives, vessels and vehicles.

Port of Long Beach CA by Ken Harrell via Flickr CC

A major chunk of the funding includes a $383.35 million grant for the Port of Long Beach to complete a series of construction and clean-air technology projects to “accelerate” the transformation to zero-emissions operations and enhance the reliability and efficiency of cargo movement.

Also, as part of the state’s Port and Freight Infrastructure Program, nearly $225 million will fund a variety of zero-emissions cargo-moving equipment and support infrastructure projects across the Port of Long Beach, including “top handlers” and other manually operated cargo-handling equipment, as well as tugboats and locomotives. The sum is the single largest grant the port has received to support the zero-emissions goals of the 2017 Clean Air Action Plan Update.

The Port of Los Angeles will receive $233 million in grants from the state to complete infrastructure projects aimed at creating a more efficient and sustainable supply chain. “This nearly quarter-billion-dollar investment in critical Port of Los Angeles projects –– along with an additional $191 million in supporting regional projects –– will accelerate our efforts to boost competitiveness, create jobs and enhance decarbonization efforts,” said Port of Los Angeles Executive Director Gene Seroka. 

The Port of Oakland was awarded $119 million in grant funding from the state under the Port Freight Infrastructure Program (PFIP). The funding will support infrastructure improvements at the port’s maritime facilities and roadways, and to electrify port cargo handling equipment. 

A complete list of projects is available at the following links:

The funding – particularly the investments in zero-emission projects, which account for nearly 40 percent of the Port and Freight Infrastructure Program awards – builds on a partnership between the governments of California and Japan announced in March to collaborate on strategies to cut planet-warming pollution at seaports and establish green shipping corridors as part of the state’s broader strategy to aggressively combat and adapt to climate change.

The investments also follow the California Transportation Commission’s recent approval of $1.1 billion for infrastructure improvements on high-volume freight corridors as part of the Trade Corridor Enhancement Program (TCEP) – for a total state investment in supply chain infrastructure of more than $2.6 billion this month.