Green Corridors: Moving from ambition to action

The Global Maritime Forum’s Annual Summit 2022 took place in New York in September and gathered over 200 maritime leaders to explore ideas for action on shipping’s major long-term challenges and opportunities. One topic discussed by participants was the establishment of Green Shipping Corridors.

December 07 2022

As the work on Green Corridors picks up speed, collaboration will be key to removing critical obstacles. This working group zoomed in on the need for coordination between value chain actors and supportive government measures.

The idea of maritime Green Corridors has become central to the industry’s plans to decarbonize. Green Corridors – zero-emission routes catalyzed by a combination of public and private actions – can leverage advantageous conditions such as relatively simple operational patterns, high-value trade flows, potential access to zero-emission fuel production or a supportive stakeholder environment to get a head start on demonstrating and deploying zero-emission solutions at scale. One year since governments signed the Clydebank Declaration for green shipping corridors, approximately 20 initiatives have been launched by ports, industry, governments and research institutions.

This working group considered some of the critical success factors for such initiatives and set out to design real-world strategies for maximizing the impact of Green Corridors. Participants divided into smaller groups focused on finance, planning and infrastructure, rules and regulations and supporting first movers. Their first task was to design a “Magic Remote Control” that could resolve critical challenges at the push of three buttons. Once these buttons had been programmed, participants heard from three different corridor initiatives: one led by the Port of Seattle, one led by shippers and shipowners transporting iron ore out of Australia and one started by the Government of the United Kingdom. Participants were then asked to consider these real-world examples and turn their magic buttons into actual proposals for green shipping design.

Potential new ownership model

One of the most significant changes proposed came from the finance group. Participants suggested that Green Corridors would imply a new ownership model, with green shipping services provided in a utility model, underwritten by long-term contracts and government guarantees. They also suggested changing the nature of the vessel as an asset.

Shared roadmap to give confidence to suppliers and investors

Participants working on planning and infrastructure identified the need for coordinated planning. This might mean, for instance, creating a shared roadmap or implementation plan that spanned the activities from fuel producers to cargo owners and gave visibility and confidence in the timing and nature of investments. Shared plans should also underpin discussions between shipowners, charterers and fuel producers and ensure suppliers get the necessary demand signal.

Ammonia safety demonstrations by 2025

The rules and regulations group focused on ammonia as a shipping fuel and identified the need for ship operators, ports and class societies, amongst others to commit to pilot and demonstration projects establishing the safe handling from cargo storage to engine by 2025.

Combining green premium and public funds for cost and risk sharing

The group discussing how to support first movers emphasized the operational expenditures associated with Green Corridors – i.e., fuel costs. Given the high costs associated with zero-emission fuels in the first years of these corridors, both public and private support were deemed necessary. The ability to leverage both a green premium from industry and dedicated public funds was seen as the backbone of a successful cost and risk-sharing model for a Green Corridor.

Key actions

  • Develop shared implementation roadmaps to provide visibility and confidence in the timing and nature of investments
  • Carry out ammonia safety demonstrations
  • Mobilize public funding to support transition, particularly to close the fuel cost gap

This excerpt is taken from Braving rough seas, a new report summarizing ideas for collective action that emerged at the Global Maritime Forum’s Annual Summit 2022 in New York. Read the full report to learn more.

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