Closing the Gap

The report analyses policy measures for closing the competitiveness gap between fossil fuels and zero-emission alternatives in shipping. The report considers the extent to which different measures can close the competitiveness gap and how they could enable an equitable transition.

Any one policy option will not be enough, so it is important to combine options and tools to deliver on agreed goals. One potential route forward is the following policy package:

  1. Adopt a global MBM capable of generating significant revenue. This mechanism needs to create a carbon price that incentivises emissions reductions and investments into readily available GHG mitigation options in the near term, and fuel switching once alternative zero-emission fuels are widely available.
  2. Combine an MBM with an effective and fair use of revenue recycling and other revenue use options to drive both demand and supply of zero-emission fuels whilst also supporting an equitable transition and addressing disproportionately negative impacts on States.
  3. Use a direct command-and-control measure such as a fuel mandate in the long term to send an unequivocable signal to the market that a fuel transition will take place.
  4. Develop national and regional policy that can ensure the transition of domestic fleets at least at the same rate or sooner than international fleets and that work in synergy with global IMO-driven policy.
  5. Promote voluntary initiatives and information programmes to stimulate supply-side investments in RD&D and infrastructure, encourage knowledge sharing and support capacity development.

Read the full report Closing the Gap here