The shipping industry will need to invest approximately just under $2 trillion if it is to meet its decarbonization goals, according to a new study from UMAS and the Energy Transitions Commission for the Global Maritime Forum for the Getting to Zero Coalition.
If the study is correct, $50-70 billion will have to be spent every year in order to meet its first target of halving emissions by 2030.
If the industry is to decarbonize fully by 2050, it will require an additional $400 billion annually, which could make its final expenditure $1.9 trillion.
Sustainability is one of the biggest issues in the maritime industry, in particular since the IMO’s regulations greatly curtailing sulfur emissions came into force on 1 January 2020.
Dr Tristan Smith, Associate Professor at the UCL Energy Institute and one of the report’s authors, said: “Energy infrastructure and ships are long-life capital-intensive assets that normally evolve slowly.
“In the next three decades however, our analysis suggests we will see a disruptive and rapid change to align to a new zero carbon system, with fossil fuel aligned assets becoming obsolete or needing significant modification.
“Even though regulatory drivers of this system change such as carbon pricing are only starting to be debated, the economic viability of today’s investments and even the returns on recent investments will be challenged, and the sooner this is factored in to strategies and plans, the better.”
The figures are based on the UMAS shipping model GloTram, which simulates decisions from a shipowner’s perspective to identify the fuel technology and operation combinations that maximize profits and identifies likely pathways for the sector’s evolution under a combination of macroeconomic and policy drivers.