Prior to MEPC77, Getting to Zero Coalition and UMAS released new policy frameworks in order to close the competitiveness gap between fossil and zero-emission fuels in shipping community.
According to the recently-issued paper, for shipping’s decarbonisation to be in line with the Paris Agreement temperature goals, by 2030, the industry must reach at least 5% zero-emission fuels in international shipping.
Also, the industry must have commercially viable zero-emission vessels operating along deepsea trade routes. As explained, this will need to be supported by the necessary infrastructure for scalable zero-emission fuels (SZEF) and energy sources, including production, distribution, storage, and bunkering.
This Insight Brief explains which policy options could help close the competitiveness gap and enable an equitable transition. It considers the policy options shown in the diagram below.
Among others, there are multiple potential policy options for closing the competitiveness gap between fossil and zero-emission fuels and enabling an effective and equitable transition. One potential route forward is the following policy package:
- Adopt a global MBM capable of generating significant revenue. This mechanism needs to create a carbon price that incentivises emissions reductions and investments into readily available GHG mitigation options in the near term, and fuel switching once alternative zero-emission fuels are widely available.
- Combine an MBM with an effective and fair use of revenue recycling and other revenue use options to drive both demand and supply of zero-emission fuels whilst also supporting an equitable transition and addressing disproportionately negative impacts on States.
- Use a direct command-and-control measure such as a fuel mandate in the long term to send an unequivocable signal to the market that a fuel transition will take place.
- Develop national and regional policy that can ensure the transition of domestic fleets at least at the same rate or sooner than international fleets and that work in synergy with global IMO driven policy.
- Promote voluntary initiatives and information programmes to stimulate supply-side investments in RD&D and infrastructure, encourage knowledge sharing and support capacity development.
Shipping is an essential global industry which is currently on an emissions trajectory that is dramatically out of line with the Paris Agreement temperature goal. As such, there is an urgent need for the development of policies which guide and support this sector through an equitable transition towards zero emissions.
…the report concludes.
EXPLORE GETTING TO ZERO COALITION AND UMAS POLICY FRAMEWORKS HERE