Projections suggest that sustainable shipping fuels could achieve cost parity with fossil fuels by 2035, as indicated by a recent analysis conducted by the technology group Wärtsilä.

The report, titled ‘Sustainable Fuels for Shipping by 2050 - The Three Key Elements of Success,’ emphasizes the crucial role of decisive policies such as the EU Emissions Trading Scheme (ETS) and the FuelEU Maritime Initiative (FEUM) in narrowing the price gap between fossil fuels and sustainable alternatives.

“Transporting 80% of world trade, shipping is the engine room of the global economy. However, despite being the most efficient and environmentally friendly way to transport goods, it emits 2% of global emissions, equivalent to the annual emissions of Japan. Without action, this could increase by more than 45% by 2050,” Wärtsilä said in a statement.

The International Maritime Organisation (IMO) has set a target of achieving net-zero emissions by 2050. While existing decarbonisation solutions could reduce emissions by up to 27%, Wärtsilä report argues that radical action, coupled with the adoption of sustainable fuels, is necessary to eliminate the remaining 73%.

“The industry faces a ‘chicken and egg’ challenge – ship owners are hesitant to commit to a fuel today that is expensive, only produced in small quantities, and may be replaced by another fuel that scales faster and more affordably. Meanwhile, suppliers find it challenging to scale production without clear demand signals,” Wärtsilä said.

To facilitate this transition, the report calls on policymakers to:

· Establish an internationally agreed science-based pathway for phasing out fossil fuels from the marine sector, aligned with IMO targets.

· Adopt a global industry standard for marine fuel carbon pricing.

· Enhance global collaboration between governments to drive innovation and infrastructure development necessary for the widespread availability of sustainable fuels.

Furthermore, the report urges industry stakeholders to:

· Initiate sector-wide procurement agreements to consolidate demand from multiple shipping operators.

· Collaborate with leaders in aviation, heavy transport, and industry to develop a globally recognized framework for the production and allocation of sustainable fuels.

· Establish an industry-wide knowledge hub to facilitate the sharing of expertise, skills, and insights.