Joining the latest edition of the International Chamber of Shipping (ICS) Leadership Insights, Director Mechthild Wörsdörfer of the International Energy Agency (IEA) estimated that the pandemic had reduced significantly demand for energy this year.
The IEA is an autonomous intergovernmental organization established in 1974 in the framework of the Organization for Economic Cooperation and Development after the 1973 oil crisis. Based in Paris, it works with over 30 governments of developed countries.
“On the energy sector, energy demand is likely to go down by 5% this year due to Covid-19,” the IEA director told the webinar moderated by ICS Chair Esben Paulsson and discussed the decarbonization of shipping in the post Covid-19 era.
More importantly due to its direct impact on shipping, Ms. Wörsdörfer said the global energy agency estimated that investments in the sector had also contracted.
“It doesn’t look so well for shipping; there’s a huge decline in investments in energy sector by about 20% this year,” she noted, but expressed hopes that investments especially in renewable energy sources will return in 2021.
Covid-19, however, has one positive result; it has lowered CO2 emissions globally by a significant 7 %, according to Ms. Wörsdörfer. Similarly, is expected that shipping, which accounted for about 2 % of CO2 emissions globally in 2019, would also drop in 2020.
The IEA official, nonetheless, expected that this drop is only temporary. Ms. Wörsdörfer recalled that during the 2008-2009 financial crisis, there was also a decrease in CO2 emissions, but rebounded four times in 2010.
She also recognized the key role of the IMO in reducing CO2 emission worldwide and commended the recent agreement facilitated by its Marine Environment Protection Committee that would reduce by 40% carbon intensity across the global fleet by 2030.
That’s an important step towards 100% decarbonization after 2050. “IMO would make this happen,” Ms. Wörsdörfer projected.