GMF and TESS have issued a publication to explore the key interactions between shipping, trade, and the low-carbon transition, highlighting the challenges and opportunities for developing countries.
The paper “Shipping Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate Resilient Development,” notes that securing this transition is essential, as the cost of inaction far outweighs the necessary investments.
Addressing the issues will require considering the impacts of measures on different countries and regions, as well as developing policy frameworks that support the opportunities and needs of developing economies. Meanwhile, achieving opportunities will require developing port infrastructure that is both climate-resilient and suited for the transition, particularly in LDCs and SIDS, while exploring strategies like hydrogen or e-fuels production to bring economic and trade benefits.
Furthermore, adequate retraining and reskilling, including for the more than two million global seafarers, will also be crucial for a successful transition. Efforts are needed now to define a clear pathway to zero-carbon shipping that supports global climate targets and ensures climate resilience for sustainable development.
Building on this analysis, three key policy engagement opportunities for developing countries are identified:
- Engage in IMO discussions to ensure a just and equitable transition to decarbonization.
- Explore hydrogen production potential in anticipation of maritime decarbonization from 2030, when demand for zero-emissions fuels is expected to rise rapidly.
- Cooperate with stakeholders across the value chain to maximize technology transfer and knowledge exchange, including through initiatives like green corridors.
Decarbonized shipping can positively impact the transition of other sectors and help achieve climate and sustainable development goals. The growing focus on Scope 3 emissions, driven by corporate decarbonization targets, is heavily reliant on the shipping industry’s ability to reduce emissions from transport. Low-carbon shipping can also decarbonize hard-to-abate industries such as steel and cement by enabling fuel production and zero-emissions infrastructure, alongside early offtake of hydrogen-derived fuels.
Looking ahead, the paper notes that further research is needed on the interplay between trade and shipping regulatory frameworks in achieving net-zero pathways. This includes exploring the opportunities and challenges of carbon pricing, carbon border adjustments, green fuels development, and ensuring a just and equitable transition.
