Environmental Defense Fund (EDF) and Lloyd's Register Maritime Decarbonisation Hub have published a report proposing three financing concepts to address what they describe as a trillion-plus investment gap that could derail shipping's energy transition.

The report, titled 'Navigating the Net-Zero Transition', draws on over 40 interviews with shipowners, financiers, fuel developers, insurers, academics, and NGOs conducted over two years of research. The organisations warn that without adequate funding, shipping emissions could reach 130% of 2008 levels by 2050.

"Without strong action, emissions from maritime shipping are projected to rise, putting the sector far off track to transition away from fossil fuels by 2050," said Guillaume Morauw, Sustainable Finance Senior Policy Analyst at Environmental Defense Fund and co-author of the report.

Maritime shipping carries nearly 80% of global trade and is the sixth largest emitter of greenhouse gas emissions globally, according to the report. The capital expenditure intensity of ships and fuel infrastructure creates substantial financing needs for the sector's transition away from fossil fuels.

Recent progress includes the International Maritime Organization's approval of a framework that would make maritime shipping the first sector to pay a price on emissions. However, this risks stalling without sufficient support from public and private financiers, the organisations claim.

A 2023 survey cited in the report indicates that senior finance professionals are contemplating divesting from maritime due to ESG risks, potentially making affordable capital harder to secure, particularly for smaller shipowners.

Scaling zero- and near-zero emission fuel projects requires substantial capital expenditure, with some infrastructure, storage, and terminal facilities costing up to $2bn, according to the report.

"These challenges are evident in the lack of communication between shipping and infrastructure finance, despite their interdependence. To overcome this, fuel procurement strategies must evolve, and bold collaboration across the maritime value chain is critical," said Dana Rodriguez, Programme Manager at The Decarb Hub and report co-author.

The report proposes three concepts to unlock investments:

1. Maritime Multiplier — a carbon accounting tool that quantifies the supply-chain benefits of investing in cleaner ships, showing how shipping decarbonisation can deliver "cascading" emissions reductions across multiple sectors and investor portfolios.

2. Lending Platform for Energy Efficiency — a blended-finance platform pooling retrofit projects to lower risk, build market maturity, and expand access to affordable capital, particularly for smaller shipowners. It focuses on energy-saving technologies to cut emissions in the near term and reduce transition risks.

3. Time Stacked Offtake (TSO) — reshapes clean fuel contracts by breaking long-term offtake agreements into shorter, stackable tranches. This gives buyers more flexibility while providing fuel developers with revenue certainty. TSO could be managed by fuel producers, development banks, or coalitions such as the Zero Emission Maritime Buyers Alliance.

EDF and the Decarb Hub are now seeking feedback from stakeholders to help refine the concepts and move them toward commercial viability. They are inviting partners — including banks, shipowners, fuel developers, and public finance institutions — to participate in pilot projects.