Green Corridor: A Feasible Option for the UAE Decarbonization Pathway, Opportunities & Challenges
Authors: Diaz S. , Al Hammadi N. , El Nasr A. Seif , Villasuso F. , Prakash S. , Baobaid O. , Gracias D. , Mills R. 
Published: October 2023

The global energy sector is shifting towards a more sustainable, environmentally friendly production, and consumption of all energy sources. Climate change and ESG (Environment, Social, and Governance) topics are opening important debates about its challenges towards energy transition, management of a wide range of stakeholders, as well as benefits and opportunities, reflected on the long-term prospects of a company, which takes into consideration environmental concerns, businesses’ financial performance, resilience, and the ability to sustain their operations & business continuity during adverse situations with appropriate and effective governance frameworks. The objective of this paper is to examine the potential of green corridors (‘GC’) as a solution to reduce emissions in the shipping and logistics sector and how it aligns with the decarbonization strategy of the UAE. The scope of the proposed paper includes a pre-feasibility assessment of two locations, potential decarbonization clusters, or ports that include technical, economic, regulatory, and government aspects (e.g., consortium or JV structures).

Our study will employ a mixed-methods approach, which includes a literature review, data analysis, stakeholder mapping, and expert interviews. The literature review will examine current research on decarbonization efforts in the shipping and logistics sector, with a focus on initiatives aimed at reducing greenhouse gas emissions as a tool to support the energy transition. The data analysis will be used to evaluate the pre-feasibility of implementing a GC, assessing one location and potential clusters, including project baselining for corridors, value chain mapping, screening criteria (selection framework and justification), and stakeholders’ mapping including regulatory bodies and governments. Expert interviews will be conducted with stakeholders in the shipping industry and governmental entities to gain insights into their perspectives on the potential of GC as a decarbonization pathway.

GCs are increasingly seen as an essential part of the solution, viewed as catalysts to the transition toward zero-carbon shipping. Whilst there have been announcements to implement, there is no GC in full operation today, which enhances the novelty of this topic. GCs are expected to be built with decarbonization hubs to address the company's Sustainable Development Strategy (SDS) by providing carbon-free options between ports and with an end-to-end centric approach, where financing options, alternative fuels, and collaboration among sectors are essential. Moreover, GCs are expected to lower risks, increase stakeholder confidence in investing, and align on a roadmap for a multisector approach and governance structure feasible for meeting decarbonization targets and timelines.

Shipping and logistics sectors represent 5-10% of direct emissions and a relevant proportion of scope 3 for the upstream & downstream sectors. Emissions and stakeholders need to be assessed, quantified, and mapped at the ports or hubs, including storage facilities, and routes. Nevertheless, identifying green policies could help close the gap in fuel costs (e.g., carbon exchanges, carbon credits, tax and fiscal policies, CCS, alternative fuel, and infrastructure incentives/subsidies, etc.), cargo sensitivity, and technology developments.

The results of the paper are expected to indicate that GCs have the potential to significantly reduce greenhouse gas emissions (GHG) in the shipping and logistics sector and support the UAE's position as a "first mover" nation in terms of decarbonization. The UAE sustainability plans, and International Maritime Organization's (IMO) stricter regulations are incentivizing the sector to meet ambitious goals by 2030 and 2050, guiding more efforts to promote more collaboration across its hydrocarbon value chain. However, it will also require a significant investment in infrastructure and technology, as well as cooperation among multiple stakeholders, including government, industry, and the international community. Also, governance models and clear roadmaps linked with government policies and incentives would be important to make it successful.