Today, Environmental Defense Fund Europe released a report showing how an enabling policy for investment in emission reductions could unlock UK-driven innovation in the shipping sector.The report coincides with the UK’s launch of Maritime 2050: Navigating the Future, which sets out the UK government’s vision for a long-term sustainable shipping sector in the country, including by providing incentives for its maritime industry.
As the UK considers how to design the optimum policy to drive innovation, the report by Environmental Defense Fund Europe highlights the Norwegian NOx Fund as a model with promising application for greenhouse gas emissions reductions in shipping.
Aoife O’Leary, Senior Legal Manager at the Environmental Defense Fund Europe said,
“The Maritime 2050 strategy is a first step towards a UK shipping industry that is sustainable in the long-term. As a proud maritime nation, the UK needs to retain its advantage in the marine sector and at the same time improve air quality and commercialise new approaches to tackling climate change. Creating proper incentives, as Norway did to reduce nitrous oxide pollution, is a great way for the UK to drive investment into low carbon shipping solutions.”
Norwegian businesses created the NOx Fund as a way to finance measures to reduce nitrous oxide (NOx) pollution. The money collected in the fund, contributed by Norwegian companies as an alternative to paying a NOx tax, pays for NOx reduction measures implemented by the companies themselves. If agreed reductions are not met, the NOx tax is re-imposed. The NOx Fund, which has been successful at reaching its targets, is a good example of how to achieve low cost emission reductions while driving technological development. Companies benefit from a lower payment relative to the NOx tax and are incentivised to find innovative and cost effective ways to reduce NOx emissions. As a result, Norway’s business community has successfully reduced NOx pollution by 44,000 tonnes and the payouts from the fund in excess of $450 million have secured Norway’s position as a world leader in NOx reduction.
UK domestic shipping contributes roughly five to ten percent of the UK’s air pollution.[1] With a program like the Norwegian NOx fund, the UK can capitalise on clean maritime innovation and investment domestically.
For more information on Environmental Defense Fund Europe’s shipping work, click here.
[1] Latest data released from the Clean Maritime Strategy: https://www.gov.uk/government/publications/clean-air-strategy-2019