Executive Summary:
This study investigates the optimal phased pathway for decarbonizing Canada’s maritime transport sector across short-, medium-, and long-term horizons. It applies the Multi-Criteria Decision-Making (MCDM) – Analytic Hierarchy Process (AHP) to evaluate eight decarbonization strategies, as well as Electrification through Battery-Powered Ships—against ten key criteria.
The research addresses three core questions:
- What are the most important criteria for evaluating maritime decarbonization strategies in Canada?
- How do these strategies perform relative to each other?
- What is the optimal implementation timeline for a low-emission maritime future?
Environmental impact emerges as the most decisive criterion, followed by economic viability and technological feasibility. Scalability and flexibility, along with energy security and supply-chain considerations, are critical to long-run resilience. Life-cycle analysis, infrastructure requirements, social and political feasibility, safety and risk management, and implementation timeline round out a robust assessment framework tailored to the Canadian context.
Among the evaluated options, Energy Efficiency Improvements emerged as the top-performing strategy, driven by near-term viability and strong cost-effectiveness. Liquefied Natural Gas (LNG) ranks second, benefiting from existing infrastructure but limited by methane leakage risks. Biofuels and Electrification via battery-powered ships show moderate promise, though their uptake is hindered by sustainability and technical constraints, respectively. Green hydrogen, green ammonia, and synthetic fuels score lower today—reflecting infrastructure and scalability hurdles—while ocean-based fuels rank lowest due to technological immaturity and uncertain resource availability.
Based on these findings, the study proposes a phased decarbonization pathway:
- Short-Term (2025–2035): Focus on energy efficiency and transitional solutions such as LNG and biofuels.
- Medium-Term (2035–2050): Accelerate deployment of green hydrogen, ammonia, and synthetic fuels as enabling infrastructure develops.
- Long-Term (2050 and beyond): Move toward full electrification and ocean-based fuels for deep decarbonization, supported by sustained policy, investment, and supply chain alignment.
Key takeaways for Canadian financial services leaders:
- Executives (banks, insurers, asset managers): Prioritize near-term financings in efficiency retrofits, digital fleet tools, and port call optimization—high IRR, low execution risk—while building optionality for hydrogen/ammonia/e-fuels as infrastructure scales
- Risk managers: Incorporate the criteria weights and strategy scores into sector limits, PD/LGD overlays, and transition-risk stress tests; watch carbon-price pass-through and fuel GHG-intensity rules for earnings-at-risk in shipping, ports, and trade-linked borrowers
- Boards: Tie decarbonization targets to capital planning (efficiency first, fuels next), mandate milestone triggers (e.g., corridor infrastructure, bunkering/charging readiness), and oversee disclosure on scenario resilience and capex pathways
- Policymakers/regulators: Crowd in private capital via blended-finance, credit enhancements, and green bond programs; synchronize port and corridor investments with MEPC-83 timelines to de-risk first-mover projects