Is power pricing sinking shipowners’ sustainability initiatives?

88474_Stena-Germanica

Source: Stena

Any notion of meeting global emissions targets by running ships on alternative marine fuels could be heavily affected by the Biden Administration’s Inflation Reduction Act (IRA), if European policy makers fail to implement fiscal measures to support European shipping’s energy transition.

While the introduction this week of the European Commission’s Net-Zero Industry Act aims to scale up manufacturing of clean technologies to facilitate the bloc’s move to cleaner fuels, the current cost and availability of alternative marine fuels – LNG, green methanol, green ammonia, hydrogen – could make it difficult for shipowners to reach emissions targets without financial aid.

What’s more, since the US$369 billion in subsidies offered under the IRA could see European clean energy producers up sticks for the US, European shipowners may then be faced with the prospect of buying cheaper US fuel shipped to European bunker suppliers.

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