New study calls for subsidies for e-fuels coupled with a GHG levy

Pressure for the International Maritime Organization (IMO) to put a levy on GHG emissions continues. In the latest contribution to the debate, a new study from UCL Energy Institute Shipping and Oceans Research Group and UMAS sees “significant risk” in some of the options (including a GHG levy) that IMO is considering, for enabling shipping’s energy transition. The analysis comes as IMO prepares for key negotiations in February and April 2025 to finalize the mid-term measures for reducing GHG emissions.

Using the total cost of ownership (TCO) approach, the study models a 14,000 TEU container vessel with different technology and fuel options to evaluate the effects of policy combinations (including a GHG Fuel Intensity (GFI) requirement, flexibility mechanism, and a levy and subsidy/reward mechanism) currently under discussion at the IMO. It builds on previous modeling by DNV for the IMO’s Comprehensive Impact Assessment but incorporates more conservative estimates for bioenergy costs and CCS capture rate.

The TCO analysis illustrates how fuel prices