Zero-emission fuels and vessels must start being deployed at scale over the next decade to achieve full decarbonization of the shipping sector by 2050. Scaling the first pilots and demonstrations into industry-wide solutions will be challenging, given the complex nature of the global shipping industry. Produced for the Getting to Zero Coalition, the new study ‘The Next Wave: Green Corridors’ shows that developing Green Corridors can cut through this complexity and accelerate the transition to zero-emission shipping.
The new study looks at how green corridors – specific trade routes between major port hubs where zero-emission solutions are demonstrated and supported – can be conceived, prioritized, and designed to accelerate the speed of shipping’s transition.
“Green Corridors can help simplify the challenges of zero-emission shipping, bringing solutions to the water faster and at a meaningful scale. The maritime ecosystem is embarking on a journey to a transformed, zero-emission shipping sector. The task ahead is complex, but not impossible,” says Johannah Christensen, CEO of the Global Maritime Forum.
The study shows that green corridors can leverage favorable conditions for accelerated industry action and allow policy makers to create an enabling ecosystem with targeted regulatory measures, financial incentives, and safety regulations. In these contexts, the mutually reinforcing actions needed from industry and policymakers to decarbonize shipping become more straightforward, creating end-to-end solutions that can be replicated globally.
“Green corridors will enable us to go from ambition to action. However, there will still be a cost gap between fossil-based shipping and zero-emission shipping of the order of 25% to 65%. Targeted government action to close that cost gap on corridors could pay big dividends for the transition overall,” says Faustine Delasalle, Co-Executive Director, Mission Possible Partnership.
The Next Wave draws its conclusions based on studies of three different corridors, each representing a different kind of opportunity for the transition: the Australia-Japan iron ore corridor, the Asia-Europe container route, and the Korea-Japan-US pure car carrier (PCC) corridor. The case studies were undertaken in consultation with more than 30 companies across the value chain, including many who are active on the routes in question.
“For zero-emission shipping to be successful, it must be an economically competitive option for companies like Star Bulk. Green Corridors are trading routes where policy support and collaboration in the industry could ensure that benefits to first movers outweigh the costs and the risks that they are taking,” says Charis Plakantonaki, Chief Strategy Officer, Star Bulk Carriers Corp.
On all green corridors, the success factors are likely to be similar: corridor-level consensus on fuel pathways, policy support to help close the cost-gap for higher-cost zero-emission fuels, and value-chain initiatives to pool demand. Aligning on a corridor-specific decarbonization roadmap based on these factors could provide all stakeholders with the confidence that is needed to invest, co-ordinate, and deliver the solutions at scale required by 2030.