As Dr. Nishatabbas Rehmatulla said, by enabling GHG reductions while also supporting growth in trade, high rates of operational carbon intensity reduction are needed, in the range of 75%-100% reduction.

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Thus, operational efficiencies from slow steaming and technical energy efficiency measures will not be enough. As a result this gap will be filled with very low/zero-CO2 fuels.

A recent report by Lloyd's Register and UMAS, 'Zero Emission Vessels 2030'shows that costs at the ship level would vary between the different fuel and machinery options. According to the report biofuels are the clear winner, followed by hydrogen and ammonia.

In addition, GloTraM, a techno-economic model, evaluates scenarios of the shipping industry to estimate the CO2 emissions from the industry. GloTraM uses four scenarios, focusing on the price of renewable energy; availability of bioenergy, fossil fuel price and hydrogen prices.

In the low renewable price scenario, by 2050 a carbon price of $100/t of CO2 can cause an almost 75%-85% reduction in CO2 emissions.

Credit: UK Chamber of Shipping

This is also confirmed by Stiglitz and Lord Stern, whose study suggested that the carbon price needed to achieve the Paris Agreement goals, would need to be between $50-100/t of CO2 in 2030,.

This indicates that, at least in the 'low renewable fuel price' scenarios considered, the estimates for shipping’s foreseeable cost of decarbonisation aligns well with the cost of decarbonisation across the global economy.

Dr. Nishatabbas Rehmatulla mentions.

Moreover, renewable hydrogen prices are reducing fast. According to the International Energy Agency (IEA), costs are driven by the cost of renewable electricity. Current projects can secure prices of approximately $25/MWh. At these low prices, renewable hydrogen becomes cheaper than its production using natural gas, and the hydrogen price becomes equivalent to HFO prices.

Finally, international shipping needs 10EJ of marine fuel per year. This is about 1% of South America’s total technical potential, and less than 0.2% of Africa’s total technical potential.