New report stresses need for support of green shipping corridors

A new report published by UMAS, UCL, and the Global Maritime Forum highlights the potential improvement in the business case for green shipping corridors under current and prospective policies set by the IMO, EU, and US. Titled ‘Building a Business Case for Green Shipping Corridors’, the report delves into the challenges faced by green shipping corridor projects and the need for additional support to ensure their viability.

The Role of Regulation in Enabling Energy Transition:

The report emphasizes the crucial role of regulation in enabling the energy transition in the shipping industry. Policies such as the IMO’s new global fuel standard, the EU’s Emissions Trading System (ETS), and the US Inflation Reduction Act (IRA) are expected to reduce costs for green shipping corridors. However, these policies fall short of fully bridging the gap between the cost of e-fuels and the cheapest compliance solutions.

The report explores potential opportunities and options for green shipping corridors in different shipping sectors, such as gas carriers, container ships, and bulk carriers. It highlights that while biofuels and blue ammonia are currently the lowest-cost options, scalable e-fuels like e-ammonia are projected to become more competitive as production costs decrease and compliance requirements tighten.

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Accelerating Progress and Sustainable Fuel Production:

With 62 green shipping corridor initiatives already announced, supporting these projects could lead to significant advancements in sustainable fuel production. The report outlines actionable solutions for industry and policymakers to adapt their business models under incoming regulations and drive e-fuel adoption.

Strategic partnerships across the value chain are deemed essential for sharing risks and rewards, ensuring equitable cost distribution, and advancing green shipping corridor projects. Despite the challenges, economic support for green shipping corridors could be underwritten by the IMO through a levy on shipping industry emissions or by direct support from national governments.