Most Earth-system simulations run on conventional CPUs in 64-bit double precision floating-point numbers Float64, although the need for high-precision calculations in the presence of large uncertainties has been questioned. Fugaku, currently the world’s fastest supercomputer, is based on A64FX microprocessors, which also support the 16-bit low-precision format Float16. We investigate the Float16 performance on A64FX with ShallowWaters.jl, the first fluid circulation model that runs entirely with 16-bit arithmetic. The model implements techniques that address precision and dynamic range issues in 16 bit. The precision-critical time integration is augmented to include compensated summation to minimize rounding errors. Such a compensated time integration is as precise but faster than mixed-precision with 16 and 32-bit floats. As subnormals are inefficiently supported on A64FX the very limited range available in Float16 is 6.10-5 to 65504. We develop the analysis-number format Sherlogs.jl to log the arithmetic results during the simulation. The equations in ShallowWaters.jl are then systematically rescaled to fit into Float16, using 97% of the available representable numbers. Consequently, we benchmark speedups of 3.8x on A64FX with Float16. Adding a compensated time integration the speedup is 3.6x. Although ShallowWaters.jl is simplified compared to large Earth-system models, it shares essential algorithms and therefore shows that 16-bit calculations are indeed a competitive way to accelerate Earth-system simulations on available hardware.