Incentives Required for Low-Carbon Fuel Adoption in Shipping: MMMCZCS Report
The Maersk Mc-Kinney Møller Center for Zero Carbon Shipping highlights the need for targeted financial incentives to promote low-emission marine fuels, which are currently more expensive than fossil fuels. The design of these incentives will critically impact the effectiveness of emissions reductions and the scalability of next-generation fuels.
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The Maersk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS) emphasizes the necessity of targeted financial incentives to facilitate the adoption of low-emission marine fuels. Currently, these fuels are significantly more costly than traditional fossil fuels.
Policymakers are advised to favor harmonized reward rates for lower abatement costs, while those focused on scaling next-gen fuels should consider differentiated rewards to support higher-cost but scalable options like e-ammonia and e-methanol. Multipliers are recommended as a secondary option when funding is insufficient. Fixed rates offer predictability but may impose volume limits, whereas flexible rates protect funding but introduce payout uncertainties.
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