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Investment required to halve greenhouse gas emissions by 2050

by Bunkerist
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In order for international maritime transport to halve greenhouse gas emissions by 2050, a capital investment of at least 1 trillion dollars is required in land-based and ship-related infrastructure.

In order to reduce total greenhouse gas emissions to at least 50% of 2008 levels by 2050, sea transportation should make a radical transition to zero carbon energy sources in the coming period with the regulations of the International Maritime Organization (IMO). This transition requires significant investments for a fleet to be equipped with new fuel production, supply chains and targeted infrastructure.

The cost of cumulative investment between 2030 and 2050 to halve maritime transport emissions is estimated at approximately 1-1.4 trillion dollars for 20 years  or an average of 50-70 billion dollars annually. If transportation is completely carbon-free by 2050, it will require more than $ 400 billion of investment in 20 years and will total $ 1.4-1.9 trillion.

To solve the problem, we need to understand the scale of difficulty. The integration of maritime transport into zero carbon energy sources requires significant infrastructure investments. In this sense, the investment needed for global energy was recorded as $ 1.85 trillion in 2018. Maritime transport should play its role correctly by implementing correct measures and policies in this transition.

Energy infrastructure and ships are long-lived capital-intensive assets that normally develop slowly. However, in the next thirty years, there is a responsible process that will require the exchange and / or transformation of fossil fuel-dependent assets to adapt to a new zero carbon system. The earlier the economic viability and returns of the investments are questioned and the earlier strategies and plans are taken into account and implemented, the better.

At the same time, the place where the investment is required is important. These can be divided into two main areas: ship-related investments and land-based investments. The land-based infrastructure forms the main part and volume of the investment needed.

The biggest part of the investments is the land based infrastructure investments needed for the production facilities of low carbon fuels, which make up 87% of the total carbon. This includes investments in the production of low carbon fuels and the land-based storage and bunkering infrastructure required for their supply.

Only 13% of the investments needed are related to the ships themselves. These investments include investments in the operation of a newly built ship with low carbon fuels and in some cases the ability to consume high carbon products in accordance with the new regulations with systems that have been adapted later.

Among the investments related to the ship, there are also investments to increase energy efficiency, which is expected to grow due to the higher cost of low carbon fuels compared to conventional marine fuels.

Meanwhile, maritime leaders are proposing a global carbon tax, considering the impact. The initial level for the foreseen carbon tax is $ 10 per tonne of CO2 and $ 50-75 per tonne of CO2. The $ 10 per ton price corresponds to an annual $ 8 billion fund. The price of $ 75 per tonne of CO2 corresponds to an annual fund of $ 70 billion.

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