Global Maritime Forum offers a financially feasible tool for decarbonising Baltic Sea ferry lines.
The European Union (EU) is introducing new regulation to reduce GHG intensity and emissions from the shipping industry under the ‘Fit for 55’ package to achieve the decarbonization goals set out in the European Green Deal.
Global Maritime Forum writes that a key barrier to achieving these targets is the significant competitiveness gap that exists between fossil fuels and zero-emission fuels. The inclusion of shipping in the EU Emissions Trading System (ETS) will result in a reduction to the cost gap between SZEFs (scalable zero emission fuels) and fossil fuels.
However, the expected ETS prices will be insufficient to create price parity with traditional fuels. SZEFs are currently produced at low volumes and high costs, whereas fossil fuels have well-established technologies, supply chains and economies of scale which allow for low-cost production at high volumes.
Global Maritime Forum outlines how the EU could use a portion of shipping related ETS revenues to fund a program of targeted Contracts for Difference (CfDs) to incentivize private investment into the production and use of SZEFs.
Moreover Global Maritime forum states that the establishment of Green Corridors to promote zero-emission shipping can play a role. A Green Corridor is a shipping route on which technological, economic, and regulatory feasibility of zero-emission shipping is supported by public and private actions.
An overarching criterion for selecting a Green Corridor is that it provides sufficient scale and volume for impact: it must be large enough to include all the essential value-chain actors needed to scale zero-emission shipping, including fuel producers, vessel operators, cargo owners, and regulatory authorities. A Green Corridor must also have potential for large-scale GHG emission reductions, so that it generates real impact on the shipping sector’s decarbonization goals.
Global Maritime Forum proposes several potential Green Corridors. Many of these proposals are global, but they include also regional ferries and cruise ships (i) in the Baltic Sea region, (ii) from France and Spain to Ireland or (iii) those operating in the Mediterranean. These routes are an important segment of the EU shipping industry and have the added benefit of helping to raise awareness of the potential for green shipping in the general population since they provide passenger services. For example, decarbonizing the Baltic ferry routes could result in CO2 emission savings of more than 600,000 tonnes annually.
In other words, Global Maritime Forum offers a financially feasible tool for decarbonising Baltic Sea ferry lines. To refine SZEF technologies and to achieve the high production volumes required to bring prices down, incentive systems must be implemented to encourage demand and stimulate private investment. According to Global Maritime Forum the EU can provide these incentives through a program of CfDs targeted at different segments of the shipping sector and a range of SZEFs.
The Global Maritime Forum is an international not-for-profit organization committed to shaping the future of global seaborne trade to increase sustainable long-term economic development and human wellbeing, see https://www.globalmaritimeforum.org/
Photo: Niko Setälä