Cargill's Eman Abdalla: ‘Equitable, doesn't necessarily mean the shipowner is going to pay’

The EU’s proposed Net-Zero Industry Act is the shape of things to come, Ms  Abdalla told delegates at the conference.

The Net-Zero Industry Act aims to accelerate the decarbonisation of European industries, including the shipping sector, and among its provisions, calls for the inclusion of renewable fuels of non-biological origin within the definition of ’strategic net-zero technologies’, to enable dedicated production capacity for these fuels to be swiftly developed for the shipping sector.

It also welcomes the inclusion of offshore renewable technologies and carbon capture and storage in the list of strategic net-zero technologies. The European Parliament and the Council of the EU reached a provisional agreement on the Act in February 2024, and aim on reaching a final agreement before the June 2024 EU elections.

"This development is crucial, as it demonstrates the need for government support and collaboration in achieving decarbonisation goals. Now what we need is others, globally, to follow suit."

The key question to resolve is how we going to make this transition equitable. "This does not necessarily mean shipowners will bear the entire cost burden. "When we say equitable, it means ensure we have the right regulations, so you pay for what you emit". Ms Abdalla said her organisation has made two critical decisions on industry decarbonisation, "You may have expected me to say we invested in wind, or we ordered dual-fuel methanol ships, but actually, those were not the most important decisions. Rather we decided to be a catalyst for change and to collaborate with stakeholders across the value chain."

Ms Abdalla addressed the challenge of cascading costs throughout the value chain, using the example of aluminium production to illustrate her point. "If we look at the aluminium value chain, the additional premium costs incurred when transporting bauxite, alumina and metal will ultimately be compounded across various industries, such as aerospace and automotive. Whether we like it or not, these costs will inevitably cascade into the price the consumer pays for the final product. Let’s consider another example: a pair of Nike shoes. If they were transported using green fuels, the additional cost would be a mere 46 cents per pair. I believe most people would not hesitate to pay this small premium. Ultimately, decarbonisation is a collective responsibility that we all share."