The Emissions Trading scheme and global shipping

The ETS will not decarbonise shipping on its own – the abatement costs are too high – so policy-makers should consider how best to use ETS revenues to that end. The biggest barrier to decarbonisation currently is high cost fuels (energy efficiency technologies should become attractive as the ETS carbon price rises, unlike green fuels). Revenues should therefore go to guaranteeing the deployment of those fuels, through schemes like Contracts for Difference.

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