World News
Targeted E-Fuels Subsidy and High GHG Levy Key to Shipping Decarbonisation: Study
A $150/mt CO2e GHG levy could help close the cost gap between conventional and alternative bunker fuels, according to a new report.
The report—published by UCL Energy Institute Shipping and Oceans Research Group, and consultancy UMAS—comes ahead of crucial IMO negotiations in February and April, where member states will work to finalize mid-term measures to curb GHG emissions in the shipping industry.
Zero-emission fuels such as green ammonia can be rewarded or subsidised using the revenue generated from the carbon levy.
This could effectively bridge the price gap between e-fuels and other low-cost early compliance options such as LNG, biofuels and carbon capture systems.
The report finds that a $30/mt CO2e levy would be insufficient to drive shipping’s energy transition during the crucial 2027-2035 period.
It says a global fuel standard and a flexible mechanism alone are unlikely to make e-fuels competitive before 2044, delaying the shift to zero-emissions alternatives. A flexible mechanism allows underperforming ships to comply by paying for it.
As a result, fossil marine fuels including LNG, along with biofuels and carbon capture solutions could remain competitive until 2036.
Beyond that, ammonia dual-fuel ships are expected to become the lowest-cost option, though they would primarily run on blue ammonia until at least 2044.
The International Maritime Organization (IMO) is developing mid-term measures, which could be adopted this year.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 592.50 | 0.50 | 716.50 | 1.00 |
| Rotterdam | 549.00 | 2.00 | 675.50 | 1.50 |
| Houston | 570.00 | 3.50 | 728.00 | 4.50 |
| Fujairah | 579.00 | 1.50 | 769.50 | 1.00 |
| Global 20 Ports Average | 610.00 | 1.00 | 779.50 | 1.00 |
| Global 4 Ports Average | 572.50 | 2.00 | 722.50 | 1.00 |
| Global Average Bunker Price | 651.00 | 0.00 | 829.00 | 2.50 |
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