A NEW report titled Closing the Gap suggests a combination of policy measures can help close the competitiveness gap between fossil fuels and zero-emission alternatives in shipping.
The report outlines a range of policy options which may work together to decarbonise international shipping and accelerate the maritime zero-emission trajectory. It notes that zero-emission fuels need to become the industry’s dominant fuel source by 2040.
The report was prepared by maritime consultancy UMAS for the Getting to Zero Coalition, which is a partnership between the Global Maritime Forum, Friends of Ocean Action, and the World Economic Forum.
Maersk Tankers CEO Christian Ingerslev said the cost of zero-emission fuels must be significantly reduced to close the competitiveness gap with fossil fuels.
“To bridge this gap, we need to realise the potential of public-private collaboration,” he said.
“As companies, we must develop and deploy solutions at scale while policy makers must put in place the necessary regulation to make zero-emission shipping commercially viable and the default choice by 2030.”
The report outlines a number of policy options to help achieve this, suggesting the zero-emission transition can be supported by a policy package combining the strengths of different options.
According to the report, a policy package could consist of a global market-based measure which collects and uses revenue to support the transition.
This would involve a direct command-and-control measure to send an unequivocal signal to the market that a fuel transition will take place.
These measures could be complemented by voluntary initiatives, information programs, and national and regional policy measures to stimulate investments, encourage knowledge sharing, and support capacity development.
The report emphasises the need to consider the equitability of the transition when designing measures and combining policy options.
UMAS principal consultant Isabelle Rojon, lead author of the report, said decarbonisation policy in shipping needs to be as much about equity and fairness as it is about climate change mitigation.
“Vast inequalities exist globally, many of which are worsening in the face of climate change,” she said.
“With careful policy design and use of carbon pricing revenues, we can ensure that maritime climate policies do not exacerbate these inequalities.
“Furthermore, embedding equity into policy measures will help secure the multilateral agreement that is urgently needed.”
While national and regional action play important roles in the transition, the development of a global package of policies will be the key to closing the gap.
University College London research associate Dr Alison Shaw, a co-author of the report, said this year will be critical for decisions on climate policy in the IMO.
“Our report shows that there is no single perfect policy and that a successful transition will likely hinge on developing and deploying a mix of policies which can address different aspects of the transition,” she said.
“The imposition of market-based measures on the shipping industry is relatively uncharted, so the sooner policy makers can surmount this challenge together, the better for the transition, the industry, and the environment.”
