Shipping Decarbonization Needs Life-Cycle View and Economic Tools
Researchers at Chalmers University of Technology have analyzed climate policies for the shipping industry. Their study concludes that reducing emissions requires both a life-cycle environmental impact assessment and economic instruments.
A study by researchers at Chalmers University of Technology's Department of Energy and Environment has analyzed the International Maritime Organization's (IMO) proposed global climate framework for shipping. The research aimed to compare different approaches for guiding the transition to fossil-free marine fuels.
The study found that the IMO's "Net-Zero Framework" (NZF), combining a goal-based fuel intensity standard with an economic mechanism, significantly influences fuel choices. Without a global carbon budget, the framework favors biofuels due to their relatively low cost. However, when resources compete across sectors, particularly under a 2°C climate target, the landscape shifts. Green ammonia produced from renewable energy and bioenergy with carbon capture and storage (BECCS) emerge as the most cost-effective fuel options.
The research warns that a pricing mechanism alone, such as a marine levy without a life-cycle fuel standard, risks shifting emissions. Grey ammonia, produced from fossil natural gas without carbon capture, could become the cheapest option because the levy only targets exhaust emissions, neglecting potential upstream emissions from fuel production.
Researchers emphasize that both pricing and standard mechanisms are complementary and necessary. The fuel standard ensures emissions are not displaced, while pricing incentivizes shipowners to comply. Relying solely on pricing could lock in fossil fuels, while a standard alone generates no revenue for incentives. The study highlights that policy design can be as critical as technological development.
The study also examined broader environmental impacts beyond greenhouse gases, including land use and eutrophication. The transition to ammonia presents a risk of increased nitrogen compound emissions, necessitating stricter air quality regulations. Biofuel adoption carries land use risks. However, the transition does reduce particulate matter and acidification.