Carbon Performance assessment of international shipping: note on methodology

The TPI Centre evaluates companies against benchmark pathways, which translate the emission reductions required by the Paris Agreement goals into a measurable trajectory at the sectoral level. For each sector benchmark pathway, the key inputs are: • A timeline or economy-wide carbon emissions, which is consistent with meeting a particular climate target (e.g. limiting global warming to 1.5°C) by keeping cumulative carbon emissions within the associated carbon budget. • A breakdown of this economy-wide emissions pathway into emissions from key sectors (the numerator of sectoral emissions intensity), including the sector in focus. • Consistent estimates of the timeline of physical production from, or economic activity in, the sector in focus (the denominator of sectoral emissions intensity). The focus of the TPI’s Carbon Performance assessment for the shipping sector is international shipping, which is estimated to account for around 90% of total shipping emissions. The remainder of the emissions from the sector come from domestic shipping, which includes coastal shipping between ports in the same country and inland waterway transport. In addition, the TPI Centre’s analysis focuses on freight transport only, as passenger transport (e.g. cruise ships and passenger ferries) represents just a small percentage of international shipping.