Brazil and Norway Unveil Green Shipping Corridor Plan

by Naida Hakirevic Prevljak (Offshore Energy) Brazil and Norway have decided to establish a green shipping corridor between the two countries in an effort to contribute to zero-carbon emission targets in maritime transport. -- Silvio Costa Filho, the Minister of Ports and Airports, and Odd Magne Ruud, Norwegian Ambassador to Brazil, recently signed a memorandum of understanding (MOU) to promote sustainable maritime transport.

As explained, the objective of the collaboration is to create a maritime corridor for vessels that use advanced technology and low- or zero-carbon fuels and significantly reduce greenhouse gas (GHG) emissions.

“This is a project that will bring benefits to the entire world, not just to the two countries. Together with the Norwegian government, we are committed to making the maritime mode even more sustainable and ecologically developed. We seek to build a sector that combines economic development and environmental responsibility, positioning Brazil as a reference on the global stage,” the Minister of Ports and Airports highlighted.

Specifically, the MOU includes a series of initiatives that should benefit the entire logistics chain, such as implementing the green maritime corridor, fostering business cooperation between Brazil and Norway to promote sustainability, initiating low- or zero-carbon supply chains, in addition to contributing to the United Nations 2030 Agenda and the Paris Agreement.

“Since the beginning of our relations, the ocean has been the link that unites Brazil and Norway. Both countries have the knowledge and technology necessary to advance towards more sustainable maritime transport. With a solid maritime history, Norway reaffirms its commitment to the energy transition and recognizes, in this innovative project, a strategic opportunity to demonstrate to the world the potential of more sustainable navigation,” Ruud commented.

Said to be part of global efforts to combat climate change, the initiative is in line with the Clydebank Declaration for green maritime corridors, signed during the Climate Summit in Glasgow in 2021 (COP26). The declaration was one of the first ‘big steps’ to decarbonize maritime transport.

The pilot project will involve key industry partners and research institutes on both sides of the Atlantic to identify strategic routes and ports, as well as develop and enable the use of zero-emission fuels.

Norway and Brazil intend to present one or more options for a sustainable transatlantic corridor at the Climate Summit (COP30), which will be held in Belém from November 10 to 21 this year.

Committed to implementing sustainable measures in transport modes, the Ministry of Ports and Airports recently launched the country’s first sustainability policy for the logistics mode.

Due to an abundance of renewable energy sources in the country, it (Brazil) is also positioned to become the world’s largest sustainable fuel producer at a time when the maritime industry needs to switch to alternative fuels such as hydrogen, ammonia and methanol.

With over 95% of its trade exchanges conducted by sea, Brazil is one of the countries in the Council of the International Maritime Organization (IMO) with the greatest interest in maritime trade.

However, Brazil recently opposed the proposed carbon levy on shipping, the world’s first universal fee on an international polluter. In parallel to the levy, governments around the world also negotiate a global fuel standard (GFS), aimed at driving up the use of zero-emission energy on ships to effectively fully power the sector by 2050. READ MORE

Excerpt from Offshore Energy: Under current and prospective policies from the International Maritime Organization (IMO), the European Union, and the United States, the business case for green shipping corridors could improve markedly – but not sufficiently – according to the report published by UMAS, UCL and the Global Maritime Forum (GMF).

Titled ‘Building a Business Case for Green Shipping Corridors’, the report looks at the significant commercial challenges associated with green shipping corridors, how these could change under future regulation, and what additional support may be needed to ensure the viability of such projects.

Green shipping corridor projects—which focus on initiating the maritime value chain for scalable and sustainable fuels such as hydrogen-derived e-ammonia and e-methanol—have thus far faced an insurmountable cost gap. Against the backdrop of an evolving global and regional policy landscape, the business case for such first-mover initiatives will begin to improve but targeted support will be needed to ensure uptake of e-fuels.

The report emphasizes the important role of regulations in enabling shipping’s energy transition and the wider implications for the industry operating under a future compliance regime where fleet and bunkering strategies will need to become more sophisticated. Policies such as the IMO’s new GFS, the EU’s Emissions Trading System (ETS), and the US Inflation Reduction Act (IRA) will play a critical role in reducing costs for green shipping corridors but fall short of fully bridging the gap between the cost of e-fuels and the cheapest solution to meet compliance.

With 62 green shipping corridor initiatives already announced, support for these early mover projects could enable significant strides to be made in the development of sustainable fuel production and in investment in the storage, bunkering, and port infrastructure required to decarbonize the wider shipping industry later in the transition.

Economic support could be underwritten by the IMO through revenues raised by a levy on shipping industry emissions. In the absence of a global levy, however, national governments may need to step in to directly support corridor projects, the report concluded.

In related news, the International Chamber of Shipping (ICS) recently stressed that the shipping industry wants a simple, effective levy-based GHG pricing mechanism to accelerate the uptake of zero-near-zero GHG emission (ZNZ) fuels and enable full-scale maritime decarbonization.

“It is clear that there is increasing recognition by governments that a levy-based fund and reward mechanism, complemented by an IMO fuel standard, is the best way forward,” Guy Platten, Secretary General of ICS, said, adding that some Member States are not yet fully prepared to commit to the carbon tax.

Last month, the ICS and 47 governments jointly submitted a text for the future mandatory GHG emissions pricing mechanism for the global maritime industry. READ MORE