A new report by UMAS, UCL, and the Global Maritime Forum (GMF) highlights the need for additional support to make green shipping corridors commercially viable, despite improvements under evolving policies from the IMO, EU, and US.

Titled Building a Business Case for Green Shipping Corridors, the report examines the financial challenges of green corridors, the impact of upcoming regulations, and the necessary support to drive adoption of sustainable maritime fuels like e-ammonia and e-methanol.

The Cost Gap Challenge

Green shipping corridors aim to establish a scalable supply chain for sustainable fuels, but high costs remain a major obstacle. While new policies—including the IMO’s global fuel standard, the EU’s Emissions Trading System (ETS), and the US Inflation Reduction Act (IRA)—will help lower costs, they fall short of making e-fuels cost-competitive with conventional alternatives.

The report outlines three key shipping sectors—gas carriers, container ships, and bulk carriers—and assesses how regulatory shifts could improve the business case for green corridors. It finds that while biofuels and blue ammonia may be cheaper in the short term, e-fuels like e-ammonia are expected to gain competitiveness as production scales and compliance requirements tighten.

The Need for Targeted Support

Despite regulatory progress, additional economic measures are necessary to accelerate adoption. The report suggests mechanisms like Contracts for Difference (CFDs), e-fuel auctions, and financial incentives for over-compliance with e-fuel mandates. Revenue generated through an IMO-imposed emissions levy could provide economic backing, but in its absence, national governments may need to step in.

Industry-Wide Collaboration Required

With 62 green shipping corridors already announced, strategic partnerships across the value chain will be critical for success. Cargo owners, ship operators, and fuel producers must align on long-term commitments to reduce investment risks and drive infrastructure development.

Deniz Aymer, Senior Consultant at UMAS, emphasized that while regulations will reshape the business case for green shipping, direct support is essential to bridge the cost gap. Similarly, Dr. Nishatabbas Rehmatulla of the UCL Energy Institute warned that without clear demand signals and public backing, many announced green corridors could stall before implementation.

Momentum Building for Zero-Emission Shipping

Efforts to decarbonize shipping are gaining traction. Just this week, the EU granted €7.8 million ($8.1 million) to the STEESMAT project, which focuses on developing power distribution systems for future zero-emission vessels.

As the transition to sustainable shipping accelerates, the report underscores the urgency of targeted support to ensure green shipping corridors can fulfill their role as industry trailblazers.