The Situation

The global supply chain is ripe for innovation. There is one element that links the chain together the ISO shipping container. Brought to reality by sea land services. In 1954, a fellow named Malcolm McLean was instrumental at bringing this universal device that allows shipping to happen internationally in a standardized format without the cumbersome demands of moving cargo on and off of ships. One piece at a time. There are currently more than 39 million shipping containers on the planet, and they move countless tons of freight every day. In fact, six million containers are currently in motion as you read these words. 200 million trips are made every year and each burns more than 375 tons of petroleum every day. Aviation has long been seen as the great exception in that it is so resistant to decarbonization. But shipping by sea is worse. Recent calculations show that the maritime shipping industry contributes 10 to 12 percent of the world's petroleum exhaust.

Meanwhile, on land, the humble shipping container can be found on railways and roadways. Five point six million tractor trailers are registered in the United States alone and another seven million worldwide. This is about to change for the first time in history, all shipping companies, regardless of ownership carrying European trade, will be required to pay for their climate pollution. Under the revised European Union Carbon Markets Directive, once the system is fully phased in under current prices, ships will be required to pay more than 50 euros for every tonne of CO2 they emit. This will make the continued use of the world's dirtiest fuel about a third more expensive (than it is currently) and incentivize a shift to cleaner alternatives.

The European Commission just unveiled a host of regulatory measures dubbed the Fit for 55 package. In typical Brussels fashion, aimed at more than halving the bloc's emissions by 2030 compared to 1990 levels, most of the headlines focus on sexy topics like revamped targets for solar and wind energy or new mandates for the production of electric vehicles. But arguably, the most revolutionary and potentially transformative proposals in this package were actually in an often overlooked sector, maritime shipping; and here's why: Shipping operators have had to pay nothing for their climate emissions. And to add insult to injury, were recently exempted from the global minimum 15 percent corporate tax requirement agreed by world leaders.

All this despite emitting more greenhouse gases than the entire German economy. The air pollution from just 15 of the largest ships (called Triple-E Class) far outweighs those of all passenger cars in Europe. In fact, just 15 Triple-E Class cargo ships equals all of the cars in the world.

Although the humble shipping container is not the hero in this current story, we do see a future in which it will be.