Carbon lock-in: international shipping's decarbonisation delayed

For international shipping to address the climate crisis, fragmented fuel-by-fuel transition or simply setting fossil-fuel phase-out dates is insufficient. The core of decarbonisation is comprehensive policy design based on total greenhouse gas emissions, through which structural transition can be induced.

LNG Expansion and the Risk of Carbon Lock-in

When LNG spreads rapidly on economic grounds, the scenario corresponds to one in which IMO mitigation regulations are not complied with. This drives a fossil-to-fossil substitution and risks structurally embedding carbon lock-in in the shipping sector.

By contrast, when emissions regulation applies:

• LNG's role is suppressed
• Early transition to e-fuels and blue hydrogen occurs
• Whether LNG expands ultimately depends entirely on policy design

Role and Limits of Biofuels

Biofuels can play a limited transitional role before e-fuels are adopted, but several constraints exist:

• Sustainability of feedstock
• Lifecycle emissions uncertainty
• Demand competition with other industries

Adopting biofuels as a long-term alternative without policy criteria and controls could undermine emissions targets. In shipping, biofuels should be confined to a "time-bounded interim strategy".

Key Conclusions

When absolute emissions regulation is paired with policy design, an e-fuel-centred substantive transition becomes feasible. This study confirms this through quantitative analysis of fuel transition pathways and emission outcomes across diverse policy combinations.

To enable Korean shipping and shipbuilding industries to establish strategic pathways for the carbon-neutral transition, this work:

• Responds to evolving international regulation such as the IMO's Greenhouse-gas Fuel Standard (GFS)
• Provides quantitative analysis and policy implications
• Strengthens the role of shipping in achieving the Paris Agreement 1.5°C goal