The maritime industry is well under way with a green transition, and has set ambitious targets for emission cuts. In many areas, the maritime industry is leading the way, and Norwegian shipping companies phasing in green fuels or designing new propulsion systems are in the news every week.

However, many of the projects are completely dependent on funding from research projects, or support schemes for new technology – at the same time as there is a lack of schemes for scaling solutions. 

The maritime industry is well on its way to reducing its share of climate emissions. But the solutions must not be so expensive that they have consequences for the operation of the company or how many employees you can pay.

Helene Tofte, Director of international and climate affairs in the Norwegian Shipowners' Association

A key element in reducing climate emissions will be to switch to more climate-friendly fuels, such as hydrogen or ammonia. The challenge is that both hydrogen and ammonia have far higher operating costs than fossil alternatives. This means that a transition involves too great a cost, and cannot be profitable.

“The maritime industry is well on its way to reducing its share of climate emissions. But the solutions must not be so expensive that they have consequences for the operation of the company or how many employees you can pay,” says Director of international and climate affairs in the Norwegian Shipowners’ Association, Helene Tofte.

We must make it as easy to choose green as it is to choose fossil. No one wants to hold on to polluting solutions longer than necessary.

Helene Tofte, Director of international and climate affairs in the Norwegian Shipowners' Association

Here, contracts for differences can literally make all the difference. Cfd is a scheme where the state covers the price difference between traditional fuel and the greener alternatives such as hydrogen and ammonia where they will be used on new vessels during a transitional period.

“We must make it as easy to choose green as it is to choose fossil. No one wants to hold on to polluting solutions longer than necessary.”

“Contracts for differences will provide the maritime industry the necessary predictability during a restructuring period and make it easier to focus on green solutions. At the same time, it helps to build up hydrogen and ammonia production, which will provide security for the maritime industry – and for other industries that will be dependent on hydrogen and ammonia in the future,” Tofte concludes.

The scheme can be financed using funds that companies pay through an increased CO2 tax and into the EU quota trading system. In this way, the industry will in reality be financing its own green transition.