Posted: August 14th, 2022

Examining the potential of circular economy principles in reducing waste and improving sustainability in the maritime industry

# Examining the potential of circular economy principles in reducing waste and improving sustainability in the maritime industry

The maritime industry is one of the most important sectors of the global economy, transporting about 80% of world trade by volume and 70% by value (UNCTAD, 2020). However, it is also one of the most resource-intensive and polluting industries, accounting for about 3% of global CO2 emissions and generating large amounts of waste from shipbuilding, operation and dismantling (IMO, 2019).

As the industry faces increasing pressure from regulators, customers and society to reduce its environmental impact and comply with the International Maritime Organization (IMO) target of halving emissions by 2050, there is a need to rethink the current linear model of “take-make-dispose” and adopt a more circular approach that minimizes waste and maximizes resource efficiency.

## What is circular economy and how can it benefit the maritime industry?

Circular economy is a concept that aims to decouple economic growth from environmental degradation by designing out waste, keeping products and materials in use, and regenerating natural systems (Ellen MacArthur Foundation, 2017). It is based on three principles:

– Reduce: avoid or minimize the use of virgin materials, energy and water in production and consumption processes.
– Reuse: extend the lifespan of products and components by repairing, refurbishing, upgrading or sharing them.
– Recycle: recover materials from end-of-life products and reintroduce them into new production cycles.

By applying these principles to the maritime industry, circular economy can offer multiple benefits, such as:

– Reducing CO2 emissions and fuel consumption by optimizing ship design, improving operational efficiency, switching to alternative fuels and enhancing end-of-life management.
– Lowering costs and increasing revenues by saving on raw materials, energy and waste disposal, creating new markets for circular products and services, and capturing value from waste streams.
– Retaining value and mitigating risks by preserving the quality and functionality of assets, increasing their resilience and adaptability, and reducing dependence on volatile and scarce resources.
– Improving social and environmental performance by enhancing working conditions, health and safety standards, stakeholder engagement and transparency along the value chain.

## What are some examples of circular economy practices in the maritime industry?

The maritime industry is already implementing some circular economy practices across the ship lifecycle, from design and construction to operation and decommissioning. Some examples are:

– Designing ships for circularity: incorporating modular, standardized and adaptable features that enable easy maintenance, repair, upgrade and recovery of components and resources at end-of-life. For instance, Damen Shipyards Group has developed a modular barge system that can be assembled into different configurations according to customer needs (Damen Shipyards Group, 2020).
– Operating ships more efficiently: using digital technologies, data analytics and smart sensors to monitor and optimize ship performance, fuel consumption, maintenance schedules and routing. For example, Maersk Line has implemented a real-time vessel performance system that has reduced fuel consumption by 8.5% and CO2 emissions by 10% per container (Maersk Line, 2018).
– Switching to alternative fuels: exploring the use of low-carbon or renewable fuels such as liquefied natural gas (LNG), biofuels, hydrogen or ammonia to reduce greenhouse gas emissions and air pollution. For instance, CMA CGM has ordered 22 LNG-powered container ships that will reduce CO2 emissions by 20%, sulfur oxides by 99% and nitrogen oxides by 85% (CMA CGM Group, 2020).
– Reusing or leasing ships and equipment: extending the useful life of ships and equipment by selling or leasing them to other operators or markets. For example, several shipping lines lease more than half of their ship assets from third-party owners (Global Maritime Forum et al., 2020).
– Recycling ships responsibly: ensuring that ships are dismantled in a safe and environmentally sound manner that maximizes the recovery of materials and minimizes the generation of waste. For example, Grieg Green provides green ship recycling services that comply with international standards such as the Hong Kong Convention and the EU Ship Recycling Regulation (Grieg Green, n.d.).

## What are the challenges and opportunities for scaling up circular economy in the maritime industry?

Despite the potential benefits of circular economy for the maritime industry, there are also some challenges and barriers that need to be addressed. These include:

– Technical challenges: developing innovative solutions that meet the technical requirements and performance standards of the industry, such as safety, reliability, durability and compatibility.
– Economic challenges: ensuring the economic viability and competitiveness of circular solutions compared to conventional ones, taking into account the upfront costs, payback periods, return on investment and market demand.
– Regulatory challenges: complying with the existing and emerging regulations and policies that affect the maritime industry, such as the IMO 2020 sulfur cap, the IMO 2050 emission reduction target, the EU Green Deal and the EU Taxonomy.
– Cultural challenges: changing the mindsets and behaviors of the industry stakeholders, such as ship owners, operators, builders, suppliers, customers and regulators, to embrace circular economy principles and practices.

To overcome these challenges and seize the opportunities for scaling up circular economy in the maritime industry, some possible actions are:

– Collaborating across the value chain: fostering cross-sectoral and multi-stakeholder partnerships that can leverage complementary skills, resources and capabilities, share best practices and knowledge, and co-create innovative solutions.
– Investing in research and development: supporting the development and demonstration of circular technologies, products and services that can address the technical and economic challenges of the industry and create new value propositions.
– Aligning with regulations and policies: engaging with policymakers and regulators to ensure that the regulatory framework is conducive and supportive of circular economy initiatives, and that it provides clear and consistent guidance and incentives.
– Educating and raising awareness: promoting the awareness and understanding of circular economy among the industry stakeholders, highlighting the benefits and opportunities, showcasing successful cases and examples, and providing training and capacity building.

## Conclusion

Circular economy is a concept that can help the maritime industry reduce its environmental impact, lower its costs, increase its revenues, retain its value and improve its social performance. By applying circular economy principles of reducing, reusing and recycling resources along the ship lifecycle, the industry can enhance its sustainability and competitiveness in a changing world. However, to achieve this vision, the industry also needs to overcome some technical, economic, regulatory and cultural challenges that require collaboration, innovation, alignment and education.

## References

CMA CGM Group. (2020). CMA CGM Group launches its low-carbon shipping offer powered by biomethane. Retrieved from https://www.cma-cgm.com/news/3377/cma-cgm-group-launches-its-low-carbon-shipping-offer-powered-by-biomethane

Damen Shipyards Group. (2020). Modular Barge (Stan Pontoon). Retrieved from https://products.damen.com/en/ranges/stan-pontoon/modular-barge

Ellen MacArthur Foundation. (2017). What is a circular economy? Retrieved from https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy

Global Maritime Forum et al. (2020). The role of sustainable biofuels in the decarbonization of shipping: The findings of an inquiry into the sustainability and availability of biofuels for shipping. Retrieved from https://www.globalmaritimeforum.org/content/2020/12/The-role-of-sustainable-biofuels-in-the-decarbonization-of-shipping.pdf

Grieg Green. (n.d.). Green ship recycling. Retrieved from https://www.grieggreen.com/green-ship-recycling/

IMO. (2019). Fourth IMO GHG Study 2020 – Final report. Retrieved from http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Documents/Fourth%20IMO%20GHG%20Study%20-%20Final%20report%20-%20web.pdf

Maersk Line. (2018). Maersk Line saves almost 9% fuel using BigOceanData vessel tracking. Retrieved from https://www.bigoceandata.com/maersk-line-saves-almost-9-fuel-using-bigoceandata-vessel-tracking/

UNCTAD. (2020). Review of Maritime Transport 2020. Retrieved from https://unctad.org/system/files/official-document/rmt2020_en.pdf

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