- 18 new green shipping corridor initiatives emerged worldwide in the last year alone – a 40% increase in 2023 – and 1/3 of existing initiatives made significant, measurable progress in the past year.
- Six corridors have now moved on from exploration and are preparing for real-world implementation.
- Future progress is threatened by a “feasibility wall” due to the cost of switching to zero-emissions fuels.
- The lack of national policy incentives to bridge the cost gap is now the number one bottleneck and will soon limit the development of green corridor initiatives.
Shipowners and operators will not adopt more expensive and sustainable marine fuels without urgent action from governments to bridge the price gap, reports Global Maritime Forum.
The stark warning has come in the latest update on ‘Green Corridor’ development from the Getting to Zero Coalition and the Global Maritime Forum. Future progress is threatened by a ‘feasibility wall’ owing to the dramatically higher cost of zero-emission fuels.
Green corridors face a “feasibility wall”
The third edition of this year’s Annual Progress Report on Green Shipping Corridors 2024 reveals that no less than 18 new corridor initiatives have been launched over the last 12 months, a 40% increase on 2023. But a lack of support from governments is proving to be ‘the number one bottleneck’ on their further development and the launch of new ones.
The Global Maritime Forum’s Director of Decarbonisation, Jesse Fahnestock, declared: “Green shipping corridors have an essential role to play in accelerating zero-emission shipping. This year saw a handful of advanced corridors setting the pace, but continued progress is not inevitable. If industry and national governments make a concerted effort to share the costs and risks associated with new fuels, these leading corridors could together generate a breakthrough for zero-emission shipping before 2030.”
Green corridors, an initiative set up in three years ago in November 2021, were introduced as a means of reaching a target of having zero-emission fuels accounting for 5% of all fuels by 2030. This is the threshold considered as the minimum to generate the investment in supply chains, infrastructure and technology that will enable exponential growth in sustainable marine fuels over the next decade and beyond.
If green corridors fail to continue developing, however, that 5% target will be at risk. This could potentially jeopardise the industry’s entire 2050 net-zero goal, the report’s authors declared.
Outlining recent progress, they revealed that six corridors have advanced from exploration to preparation for ‘real-world implementation’. However, just these six initiatives could require more than two million tonnes of hydrogen-based fuel every year by 2030. However, shipping will have to compete with many other industrial sectors to secure adequate volumes of fuel and that will require urgent action from governments.
Key recommendations
The report made five key recommendations to support the green corridor development:
- Government support to bridge the operational cost gap of transitioning to alternative energy sources;
- The development of innovative commercial agreements for fuel procurement and chartering/cargo within green corridor initiatives;
- A flexible programmatic governance approach for green corridor initiatives to encourage participation and collaboration while allowing for risk-sharing and scaling;
- Exploration into policy and finance for green corridors – and zero-emission fuel – in the Global South, which faces unique challenges that may require collaboration with development banks to identify solutions;
- Focused support on existing green corridor initiatives to progress against Clydebank Declaration targets, given the limited public and private resources available.
Shipping provides the backbone for world trade, the report noted. But failing to meet the sector’s decarbonisation targets could have significant implications for Scope 3 emission reductions across all sectors.
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Source: Global Maritime Forum
