Why is the shipping industry not decarbonizing faster?

The shipping industry, which contributes nearly 3% of global greenhouse gas emissions, requires a global regulatory framework and a pricing mechanism to make low-emission fuels financially viable. The author advocates for a 'feebate' system, such as the World Shipping Council's Green Balance Mechanism, to offset the price differential between fossil and green fuels without causing excessive inflation. The upcoming IMO Marine Environment Protection Committee sessions in October 2024 and April 2025 are identified as critical opportunities to establish these mandatory requirements and support a just transition for developing countries.

• Seagoing vessels are responsible for nearly 3% of global greenhouse gas emissions, while the broader global supply chain accounts for 11%.
• The shipping industry is adopting low-emission technologies, with five dual-fuel methanol vessels currently operating and over 175 methanol-capable container ships on order, alongside future potential for ammonia, biodiesel, and biomethane.
• A global pricing mechanism is necessary to scale the production of low-emission fuels and de-risk investments, as the industry cannot create a robust market mechanism without a formal regulatory framework from the IMO.
• To avoid inflationary pressures, particularly in developing countries, the document proposes a 'feebate' system. Specifically, the World Shipping Council has proposed a 'Green Balance Mechanism' that rewards fuels with a well-to-wake carbon intensity reduction of 65% or more.
• The 82nd and 83rd sessions of the IMO's Marine Environment Protection Committee, scheduled for October 2024 and April 2025 in London, are viewed as the primary opportunities to implement these mid-term measures.

APA

Clerc, V. (2024). Why is the shipping industry not decarbonizing faster? World Economic Forum. https://www.weforum.org/stories/climate-action/shipping-decarbonization-fuel-pricing-mechanism/

Chicago

Clerc, Vincent. Why is the shipping industry not decarbonizing faster? World Economic Forum, 2024. https://www.weforum.org/stories/climate-action/shipping-decarbonization-fuel-pricing-mechanism/.

Wikipedia

{{cite press release |last1=Clerc |first1=Vincent |title=Why is the shipping industry not decarbonizing faster? |publisher=World Economic Forum |date=20 September 2024 |url=https://www.weforum.org/stories/climate-action/shipping-decarbonization-fuel-pricing-mechanism/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clerc2024why, author = {Clerc, Vincent}, title = {{Why is the shipping industry not decarbonizing faster?}}, publisher = {World Economic Forum}, year = {2024}, month = sep, url = {https://www.weforum.org/stories/climate-action/shipping-decarbonization-fuel-pricing-mechanism/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }