Pressure is growing from multiple directions for the shipping industry to decarbonise.Alternative fuels do exist to reduce or remove all emissions from fuel use, but they are not yet competitive with fossil fuels, and face a range of barriers to entry. Calls for policy support for decarbonisation are increasing, but it is not yetclearwhatsuch support should entail.Our analysis looks at the feasibility of applying a policy instrument known as a‘contract-for-difference’(CfD), whichhas seen previous success in drivingdown the costs of renewable energy generation technologiesin the electricity sector. We explore the application of this policy instrument to the decarbonisation ofshipping, unpacking the important design and implementation decisions with feedback from a wide range of stakeholders, and provide initiallegal documentationbased on ourfindings,drawn upby legal experts Pinsent Masons.
Clark, A., Ives, M., Fay, B., Lambe, R., Schiele, J., Larsson, L., Krejcie, J., Tillmann-Morris, L., Barbrook-Johnson, P., & Hepburn, C (June 2021). 'Zero-Emissions Shipping: Contracts-for-differenceas incentives forthe decarbonisationof international shipping'. Oxford: Smith School of Enterprise and the Environment, University of Oxford.