Investments of US$1.4 trillion to US$1.5 trillion are needed over the next three decades for technology, operations and fuels to halve shipping's carbon emissions by 2050, a top banking executive of Standard Charteres said.

In a statement posted on S&P Global's website, Roger Charles, an executive director with Standard Chartered, reportedly said around 87% of these investments are projected to be land-based such as in low- or even zero-carbon fuels.

The rest will be earmarked for directly ship-related investments, such as in technology efficiency and operational improvements including speed management, Charles told a Marine Money conference in Singapore.

The ongoing energy transition and decarbonization drive has accelerated the need for maritime finance during the coronavirus pandemic.

During the event — where he also signed the Poseidon Principles (PP), a framework that aims to reduce carbon emissions in shipping in line with global targets — Charles estimated that US$350 billion will have to be committed by 2030 alone to achieve regulator goals for lower carbon in shipping.

"More than two dozen banks with a global shipping loan portfolio of over US$185 billion are signatories to the PP, representing around half of all maritime finance, and have committed to track, monitor and drive down carbon emissions in their projects. It also helps quantitatively assess and track the financed carbon emissions," the statement read.

It added that eco-friendly or carbon-linked shipping loans are becoming more common at a time when the UN's International Maritime Organization has proposed new decarbonization rules, expected to be in force by end 2022.

Charles noted that as the infrastructure to reduce carbon in shipping does not yet exist, "therefore massive additional capital is needed to develop it."

He then pointed out that at presently decarbonization in shipping can be achieved through LNG, biofuels and operational efficiency in ships, but that gains will be limited due to bottlenecks such as loss of methane in supply chain and combustion, deforestation and changes in land use.

Future solutions will include better technologies such as efficient dual fuel engines, modification to internal combustion, use of fuel cells and batteries for electric power, particularly for short coastal voyages, and hydrogen derived fuels for long hauls, he said.