National and regional policy for green shipping corridors
The success of green shipping corridors hinges on focused, timely, and transformative policy action by national governments.
September 29 2023
Green shipping corridors are approaching their make-or-break moment. In November 2021 at the Conference of the Parties in Glasgow, 21 countries signed the Clydebank Declaration, signalling their intent to promote the development of green shipping corridors – specific shipping routes where the feasibility of zero-emission shipping is catalysed by a combination of public and private actions.
The next couple of years will determine whether they will succeed in their task of accelerating decarbonisation of the shipping sector and building the bridge to the post-2030 compliance regime that should follow from the International Maritime Organization’s revised Greenhouse Gas Strategy. While initiative from the private sector is important, only national governments have the means, and arguably the incentives, to enable this success. The single most important objective for governments is to narrow the cost gap associated with scalable, zero-emission technologies – thus unlocking private sector investments.
The best way to achieve this objective is through subsidies. Direct subsidisation of international shipping through domestic budgets is a relatively novel concept, but there are credible options – many of which build on policies already under development around the world. This insight brief explores the rationale for different subsidies and compares the potential advantages of different policy combinations.
The analysis suggests that governments have real options for action. The political feasibility of these subsidies will depend on how well green corridors align with the broader national objectives, and how well these strategic benefits are captured and communicated in the policy-making process.