Consultation launched on decarbonisation of UK shipping industry

Out-Law News | 05 Aug 2022 | 3:45 pm | 2 min. read

The UK government has called for innovative policy solutions to reduce carbon emissions generated by the country’s shipping industry.

In a consultation (49 pages / 958KB PDF) launched last week, the Department for Transport (DfT) asked industry experts for views and ideas on accelerating the use of alternative fuels and technologies. Robert Courts, minister for maritime, said the conclusions drawn from the consultation would help shape the DfT’s “core policy agenda for domestic maritime decarbonisation” which will be published in a new Clean Maritime Plan next year.

Gavin Farquhar of Pinsent Masons said: “Decarbonising commercial shipping is crucial for the UK government to meet its net zero targets by 2050. Maritime vessels currently produce around 3% of global greenhouse emissions due to the widespread use of ‘bunker fuels’, which use remnants from the petroleum refining process to power vessels.”

The consultation includes a series of proposed policy interventions, including the coordination of the rollout of low and zero emissions vessels, fuels and infrastructure, as well as new guidance on maritime decarbonisation. It also outlines proposals to encourage public and consumer engagement with maritime decarbonisation efforts and asks stakeholders to explore methods to address barriers to the adoption of new technologies and solutions

Farquhar Gavin

Gavin Farquhar

Partner

Industry collaboration is the key to driving innovation, reducing production costs and supporting demands for cleaner fuels and fresh approaches

It comes after a June 2021, study into zero emissions shipping, published by the University of Oxford and Pinsent Masons, noted that batteries and biofuels were currently the only commercially viable alternatives to dirty fuels. It found that the costs of clean fuels, such as green hydrogen and green ammonia, were more than double their fossil fuel counterparts. The report also suggested that new ‘contracts for difference’ could drive decarbonisation by covering some of the costs of switching to greener fuel types.

Farquhar said: “Calls to reduce marine and air pollution have propelled the UK government, in line with policymakers throughout the world, to search for opportunities to develop new strategies to stimulate investment in new technologies and encourage commercial shipping operators to switch to more environmentally-friendly fuels.”

“Industry collaboration is the key to driving innovation, reducing production costs and supporting demands for cleaner fuels and fresh approaches. Companies are already introducing hybrid vessels, which feature battery storage systems and combine existing conventional gas or fuel-powered engines with rechargeable electrical batteries” he added. Last year, shipping giant Maersk announced plans to introduce 12 container vessels capable of operation with carbon-neutral methanol by 2025, after conducting studies on the potential use of hydrogen and green methanol as alternative fuels.

Farquhar said the consultation’s proposals built on the DfT’s previous work in the sector. “Since 2019, ministers have published a Clean Maritime Plan, a Transport Decarbonisation Plan and a Net Zero Strategy, setting out the government’s plans to establish ‘clean growth’ in shipping amid a wider drive to decarbonise the UK economy,” she said.

Farquhar added: “Public investment has also been allocated, with £206 million of funding committed in 2021 to establish the UK Shipping Office for Reducing Emissions, which researches clean technologies and supports employment in this area. This latest consultation makes clear that the UK government intends to push forward with, and build on, these initiatives in the coming years by exploring further policy interventions to achieve Net Zero.”

The DfT’s consultation closes in October 2022. A report on its findings will be published in 2023.