Australia’s Green Shipping Moment: Can the Nation Lead a $43 Billion Energy Revolution

Introduction

As the world transitions towards low-emissions technologies, Australia is standing on the edge of a historic opportunity, one that could redefine its role in global energy trade.

With the international maritime sector turning its focus toward net-zero operations, the demand for sustainable shipping fuels is set to explode.

According to Rod Sims, chair of the Superpower Institute, Australia could emerge as the leading global supplier of green shipping fuel, capturing up to 25% of the global market, a shift that could bring in $43 billion in annual export revenue.

But this potential windfall won’t materialize on its own.

Sims warns that without targeted government action, Australia risks missing out entirely on what he describes as a “once-in-a-generation chance” to pivot from fossil fuel reliance to green energy leadership.

Why Green Shipping Fuel Matters More Than Ever

Shipping contributes approximately 3% to worldwide greenhouse gas emissions, and despite technological improvements, the sector’s carbon footprint continues to grow.

As nations scramble to meet their net-zero commitments, maritime transport has emerged as a priority area for climate action — and green fuels are the key.

Green shipping fuels — such as green ammonia, green methanol, and hydrogen-based solutions — are created using renewable energy sources like wind and solar.

Unlike traditional fuels, they emit little or no CO₂ during combustion, offering a scalable way to decarbonize a sector that currently depends on heavy fuel oil.

The International Maritime Organization is spearheading efforts in reshaping the industry’s carbon profile by adopting the world’s first global sectoral carbon pricing framework for shipping.

This is a monumental shift, and it represents the type of regulation that can create enormous new markets — including for countries like Australia, which are uniquely positioned to capitalize on the transition.

Rod Sims: Seizing the Maritime Energy Pivot

Speaking at the 5th Maritime Decarbonisation Summit in Melbourne, Rod Sims laid out a compelling case for why Australia must act now.

In his address, he highlighted a confluence of events that, if managed correctly, could unlock billions in green investment, while helping to transform Australia into a renewable export superpower.

The IMO’s New Regulatory Framework: A Global Game-Changer

In April 2025, the IMO approved a draft regulatory framework that will introduce mandatory emissions limits and greenhouse gas pricing for vessels over 5,000 gross tonnage, a category that represents 85% of all international shipping emissions.

Once the framework is formally adopted in October and implemented by 2027, it will effectively establish a global carbon price for maritime fuel.

This will incentivize shipping companies to adopt greener fuels and create massive new demand for clean alternatives.

This is the first global sectoral price on carbon, Sims noted.

It’s an incredible milestone that creates enormous opportunities for countries capable of supplying compliant fuels.

Why Australia is Uniquely Positioned to Lead

Australia’s vast renewable energy resources, including abundant solar and wind, make it Among the top locations globally for green hydrogen production, the key feedstock for many sustainable shipping fuels.

According to the Superpower Institute’s New Energy Trade Report, shipping that can be decarbonized using green fuels contributes 1.8% of total global emissions.

If Australia secures just 25% of this market, the climate mitigation effect would equal 0.4% of global emissions — a meaningful contribution on a global scale.

Navigating the Policy Gaps: What Needs to Change?

Despite its natural advantages, Australia is currently not an attractive destination for clean energy investment, a reality largely attributed to slow project approvals, unclear tax incentives, and limited infrastructure planning.

Sims outlines three urgent policy shifts:

1. ⚙️ Fast-Track Project Approvals

We need to reduce the time for project approvals or rejections, Sims stated.

Current delays are scaring off international investors and slowing momentum. Streamlining this process would instantly boost Australia’s credibility as a green energy partner.

2. 🧾 Reform Investment Incentives

The $2/kg hydrogen production credit already introduced by the government is a step in the right direction. However, more targeted financial mechanisms are needed, such as:

• Innovation grants for early-stage projects.
• Infrastructure subsidies for export terminals.
• Risk-sharing frameworks for private investors.

3. 🏗️ Build the Infrastructure Backbone

Exporting green fuels at scale requires dedicated ports, storage facilities, and fuel transfer stations.

Sims called on the federal government to coordinate with states and private sector partners to build out the required logistics infrastructure before demand peaks in 2027 and beyond.

A New Era of Energy Geopolitics

Interestingly, Sims also points to the geopolitical dimension of green fuel exports.

With the U.S. walking away from the IMO framework, many global investors are now looking for alternative, climate-aligned jurisdictions.

Australia is now better positioned than the U.S. to become a magnet for green capital, Sims said.

We mustn’t waste that advantage.

If the U.S. won’t lead, Australia and like-minded nations must take the initiative.

This sentiment echoes the views of economist Ross Garnaut, who believes Labor’s government could usher in an era of transformational energy reform, including:

• Revisiting resource rent taxation.
• Increasing support for energy export diversification.
• Prioritizing strategic industries like green iron, green aluminium, and now — green shipping fuels.

The First Step Toward a Renewable Export Empire

Australia’s ambitions to become a clean energy superpower rest not only on decarbonizing its domestic grid but also on building international supply chains for sustainable commodities.

Green Shipping Fuel = Strategic Entry Point

According to Sims, green shipping fuel is the ideal starting point. It offers:

• A well-defined global regulatory push (IMO).
• A clear pricing mechanism (carbon pricing).
• Immediate demand growth (by 2027).
• Export pathways to Europe and Asia.

Get this right, Sims explains, and we’ll create momentum for other green exports like green ammonia, hydrogen, and processed iron ore.

Final Reflections: Will Australia Act in Time?

The urgency in Rod Sims’ message is unmistakable.

The regulatory stage is set.

The market is opening. The technology exists. What remains is political will.

🇦🇺This is Australia’s moment, Sims concluded.

The question is whether we will grasp it now.

Failing to act could result in:

• A lost decade of energy opportunity.
• Ongoing dependency on declining fossil fuel exports.
• Missed environmental targets and global competitiveness erosion.

On the other hand, decisive policy leadership could:

• Unlock tens of billions in new export revenue.
• Cement Australia’s place as a climate leader.
• Stimulate domestic manufacturing, innovation, and job creation.

Key Takeaways for 2025 and Beyond

✅ $43 billion opportunity if Australia secures 25% of green shipping fuel exports.

✅ Global shipping is being reshaped by legally binding IMO carbon regulations.

✅ Australia has unmatched advantages in renewable energy generation and green fuel production.

✅ Government action — in project approvals, investment support, and infrastructure — is critical.

✅ Acting now ensures both economic resilience and climate impact.

What Comes Next?

To seize this once-in-a-generation opportunity, the Australian government must:

• Provide early-stage innovation funding.
• last-track green project approvals.
• Invest in export infrastructure and logistics.
• Create long-term market certainty for green fuel buyers.
• Promote Australia as a trusted supplier to Europe and Asia.

Without urgent action, the window may close, and with it, the chance to define Australia’s clean energy legacy.