A joint report from the Environmental Defense Fund (EDF) and Lloyd’s Register Maritime Decarbonisation Hub—known as The Decarb Hub—highlights an urgent financial gap threatening the shipping industry’s shift to net-zero. Despite growing ambition, decarbonising maritime transport remains hindered by a projected trillion‑plus dollar investment shortfall.
The Financing Challenge
Drawing from two years of intensive research and more than 40 interviews across shipowners, financiers, insurers, fuel developers, NGOs, and academics, the report lays bare the stark reality: without bold and innovative financing solutions, shipping emissions may soar to **130% of 2008 levels by 2050**.
Shipping’s outsized role in global emissions—moving nearly 80% of world trade and ranking as the sixth largest greenhouse gas emitter globally—underscores the enormity of the task ahead. Traditional funding approaches, currently fragmented and risk-averse, fall far short of meeting the capital-intensive demands of clean fuel infrastructure and vessel retrofits.
Innovative Financing Concepts
To bridge this financing gap, the report introduces three pioneering mechanisms designed to de-risk projects, unlock capital, and distribute benefits across the value chain.
Maritime Multiplier
carbon-accounting framework that quantifies how investments in cleaner shipping yield cascading emissions benefits across broader supply chains—providing a compelling case for investors seeking double returns.
Lending Platform for Energy Efficiency
A blended-finance vehicle aggregating retrofit projects—especially for smaller shipowners—to reduce risk and broaden access to affordable capital, enabling emissions reductions in the near term.
Time‑Stacked Offtake (TSO)
A flexible approach to clean-fuel contracts, breaking them into shorter, stackable tranches that provide buyers with flexibility and fuel developers with predictable revenue. TSOs can be managed by fuel producers, development banks, or alliances like the Zero Emission Maritime Buyers Alliance (ZEMBA).
Why This Matters
Interviews with key stakeholders reveal a clear disconnect: investors eager to support climate action are often deterred by shipping’s large emissions baseline and limited zero-carbon options. In 2023, a significant number of finance professionals even considered divesting from maritime due to ESG-related risks, making affordable capital even scarcer.
Moreover, infrastructure-ready clean fuel projects can require up to USD 2 billion in funding for storage, terminals, and other supporting systems—highlighting the scale and urgency of financing needs.
Next Steps: Collaboration in Action
EDF and The Decarb Hub are now calling on stakeholders to help refine these concepts and advance them toward commercial deployment. Starting with invited feedback, the initiative will soon move into pilot projects, bringing together banks, shipowners, fuel developers, and public institutions.
The findings and concepts will be further discussed at a closed workshop during London International Shipping Week on 15 September—marking the start of what could become transformative action in decarbonising the maritime sector.
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Source: The Decarb Hub
