Net zero aviation and shipping: Written evidence to the House of Commons Environmental Audit Committee

Abstract:

• Pressure is increasing for international marine transportation to decarbonise, and no clear strategy for doing so yet exists
• An estimated 2.9% of global greenhouse gas (GHG) emissions are produced by the marine transportation sector
• Several technologies are strong candidates for shipping decarbonisation, and are at various stages of maturity in terms of development and adoption
• Clean fuels have seen a substantial decline in cost resulting from technological advances, particularly in renewable power generation.
• For zero-emissions shipping technologies to become commercially viable, greater regulatory support and a step change in financial investment is required
• Similar cost differentials have been successfully overcome in recent years across various sectors, particularly renewable energy
• Facilitating private investment into zero emissions shipping technologies is essential to the viability of clean shipping fuels at scale
• The long-term success of any market-based mechanism requires both economic and legal feasibility and buy-in from key stakeholders
• In a recently published report Oxford University researchers propose the use of a Contracts-for-Difference (CfD) scheme to encourage private investment and innovation in the development and uptake of technologies and fuels for zero-emissions shipping.
• With the help of legal experts Pinsent Masons, the report provides two legally workable mock-ups of CfD Heads of Agreement specifically designed to support a technology-neutral incentive programme for the decarbonisation of international shipping.