US$1 trillion to decarbonize global shipping’s emissions

Shipping needs to make a radical shift to zero carbon energy sources in the coming three decades to reduce the sectors total greenhouse gas emissions by at least 50% of 2008 levels by 2050. This target is set by the International Maritime Organization. The transition requires significant infrastructure investments in new fuel production, supply chains, and a new or retrofitted fleet.

A new study by UMAS and the Energy Transitions Commission for the Getting to Zero Coalition spells out the scale of the challenge. Depending on the production method, the cumulative investment needed between 2030 and 2050 to halve shipping’s emissions amounts to approximately US$1-1.4 trillion, or an average of $50-70 billion annually for 20 years.

If shipping is to fully decarbonize by 2050, this will require further investments of some $400 billion over 20 years, bringing the total to $1.4-1.9 trillion.

Land-based investment requires lion’s share

The analysis also sheds light on where investments need to take place. These can be broken down into two main areas: ship-related investments and land-based investments. 

The biggest share of investments is needed in the land-based infrastructure and production facilities for low carbon fuels, which make up around 87% of the total. This includes investments in the production of low carbon fuels, and the land-based storage and bunkering infrastructure needed for their supply.

Only 13% of the investments needed are related to the ships themselves. These investments include the machinery and onboard storage required for a ship to run on low carbon fuels in newbuilds and, in some cases, for retrofits. Ship-related investments also include investments in improving energy efficiency, which are estimated to grow due to the higher cost of low carbon fuels compared to traditional marine fuels. 

At the Global Maritime Forum’s recent Annual Summit, maritime leaders proposed a global carbon levy. This is to get funds to accelerate shipping’s decarbonization through investments in technology and design of new propulsion systems, alternative fuels, and scaling and infrastructure to deliver these fuels – while taking into consideration the impact on trade and developing states.

The starting level for a carbon levy should be $10 per ton CO2, and $50-$75 per ton CO2 around 2030. A price of $10 per ton CO2 would correspond to an annual fund of $8 billion while $75 per ton CO2 would correspond to an annual fund of $70 billion. 

Corruption still a serious problem in Asia

Many countries see economic openness as a way forward, however, governments across the region continue to restrict participation in public affairs, silence dissenting voices and keep decision-making out of public scrutiny.

Like this article?

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Donate to the cause and support independent journalism

Fight against corruption, stand for justice and equality.
Advocating for ethics and transparency in Asia’s maritime industry, we raise awareness through independent journalism.

We believe in the power of individuals to trigger changes and uplift the image of the maritime industry. As such, we publish stories to keep our readers informed to enable them to make educated decisions.

We invite our readers to support the cause and be part of the fight against corruption.

Join our community for the price of a cup of coffee or any other amounts that you wish.

This is a secure webpage.
We do not store your credit card information.

Related STORIES