Ensuring market access: Turning decarbonisation into economic advantage

Shipping is the backbone of Aotearoa New Zealand’s economy. Almost all our trade moves by sea – 99.7 per cent by volume and 81 per cent by value – making the decarbonisation of shipping both a climate imperative and an economic one for our major exporters.

With exports exceeding $74 billion and imports over $80b in the year to March 2025, maintaining competitive, low-carbon access to global markets is critical to our future prosperity.

This challenge sits within a broader shift in how New Zealand thinks about resilience and infrastructure. Increasingly, policymakers and industry leaders are recognising that economic competitiveness depends not only on traditional “hard” infrastructure such as ports, roads and fuel systems, but also on the natural systems that support them.

Approaches that work with nature, restoring coastal buffers, strengthening catchments, and improving ecosystem resilience, can complement engineered solutions while delivering multiple benefits. These include reducing flood and erosion risk, improving biodiversity, and strengthening the long-term stability of the systems that underpin export industries.

For an export-dependent country exposed to climate risks and global supply chain pressures, this integrated thinking is becoming increasingly important. Nature-based approaches can often deliver overlapping economic, environmental and resilience benefits, and can be an opportunity to address infrastructure challenges while supporting the productivity of sectors such as agriculture, seafood and forestry that depend heavily on healthy natural systems.

Recognising the scale of this challenge, The Aotearoa Circle launched a Future Fit Shipping workstream last year to explore how New Zealand can decarbonise its maritime sector while remaining a resilient trading nation. To ground ambition in evidence, The Circle commissioned Deloitte New Zealand to examine the barriers and opportunities for maritime decarbonisation and support a coordinated, cross-sector approach.

The resulting report draws on insights from more than 50 stakeholders across Australasia spanning shipping lines, ports, energy providers, government agencies, iwi, finance and major exporters.

From ambition to action

Vicki Watson, Chief Executive of The Aotearoa Circle says earlier work by The Circle (a public/private partnership) on climate adaptation across agriculture, seafood and tourism consistently pointed to one common challenge; the need for alternative marine fuels if those sectors are to meaningfully decarbonise.

“That’s why we established the Future Fit Shipping workstream,” she explains. “As an export-led nation at the end of long global supply chains, distance matters. If international measures such as an International Maritime Organization levy are introduced, our exporters will feel that impact disproportionately. Acting early is not just good climate policy – it’s good economic strategy.”

The report sets out practical pathways for decarbonising shipping, including the increased use of renewable fuels, stronger trans-Tasman partnerships and targeted infrastructure investment. It explores the potential for a green shipping corridor with Australia and presents four alternative fuel roadmaps: biofuels, LNG, ammonia and methanol.

Importantly, Deloitte’s economic modelling highlights the cost of delay. Even accounting for the reality that fossil fuels are likely to remain cheaper than low-emissions fuels in the near term, New Zealand could avoid an estimated $17.5b in costs from anticipated International Maritime Organization measures such as a global emissions levy if it keeps pace with global decarbonisation efforts.

John Marker, Critical infrastructure & Real Estate Leader, Deloitte New Zealand says distance is central to the equation. “New Zealand’s trading partners are a long way away, and emissions are directly linked to distance travelled. We modelled the potential impact of a flat US$100 per tonne levy over time. Even with conservative assumptions, the avoided cost of taking action on decarbonisation is material,” he says. “International shipping lines are already optimising fleets around decarbonisation requirements. We’re seeing a bias toward larger vessels in global order books because they deliver significant blue-water efficiency gains. That has implications for port infrastructure, service frequency and supply chain configuration here in New Zealand.”

Marker adds that international alternative fuelled vessels are likely to continue relying on established international bunkering hubs, meaning New Zealand ports may not need extensive new bunkering capacity – but they will need to be ready for larger, next-generation ships.

“That aligns with expansion plans already underway at several domestic ports, particularly in container terminals, as they scale to accommodate larger vessels.”

Trans-Tasman opportunities

The Australian Commonwealth Government has taken a proactive role in assessing infrastructure requirements for alternative fuel, from technical standards and commodity definitions through to the usability of existing assets. This includes significant funding commitments, and hydrogen investment initiatives, and roadmaps across aviation and marine.

Matthew Walden, Partner, Financial Advisory – Energy Transition & Decarbonisation with Deloitte Australia says there are benefits for both countries to collaborate from policy alignment to energy security across supply chains and economic development through the establishment of new industries and jobs not prevalent today.

“There is a high level of similarities between the two jurisdictions that we can leverage for our own benefits. Including both countries also having very large agriculturally based economies that can support the establishment of new industries to a large degree.”

Since its release, the Future Fit Shipping Report has garnered interest and enhanced discussion with the sector and customers.

Carolyn Mortland, Executive Officer Sustainability, Zespri says the Aotearoa Circle’s Future Fit Shipping workstream and report has not only fed into Zespri’s work on green shipping, but it has also broadened awareness of green shipping opportunities for our wider economy.

“The report outlines how decarbonising our shipping routes can help protect and expand market access, as the direction coming from key international customers and governments becomes clear. It also shows exporters can’t decarbonise shipping by ourselves; we need shipping companies, fuel providers and governments to work together, with government support critical to getting the ball rolling,” she says.

Tracy Malone, Logistics & Customer Operations Manager at Indevin Group says the Future Fit Shipping workstream is strategically important for her company with shipping one of the largest contributors to its emissions footprint, accounting for around 43 per cent of its total emissions.

“If we’re serious about our sustainability goals and long-term commercial resilience, it is critical to be part of the solution and have a seat at the table. Supply chains today are no longer just about cost, service, and quality – it’s resilience, agility and sustainability that are now equally critical, and shipping is an area where progress can have a disproportionate impact,” she says.

“More broadly, New Zealand’s shipping system is fragmented, with small, competing ports and limited access to newer, more efficient vessels. The Future Fit Shipping work helps shift the conversation from individual interests to what will best serve New Zealand as a whole, really the entire objective of the Aotearoa Circle. This is closely tied with Indevin’s purpose of, “Inspired by nature, crafted with care and growing connections” – the shared knowledge and connections is key here. That collective approach is essential if we are to strengthen our social license to operate, reduce our environmental impact, and demonstrate that emissions reduction and commercial success can go hand in hand for the primary export sector.”

Mrs Watson is pleased with the feedback the report has garnered since its release but says continued industry, Government and broader stakeholder discussion is required.

“As customer and regulatory pressure for lower-emissions supply chains intensifies, the message is clear: for a trading nation as distant and export-reliant as New Zealand, future-proofing maritime access, and keeping our export goods competitively priced in market, is both an environmental necessity and an economic imperative.”

Vicki Watson

Vicki is the Chief Executive of The Aotearoa Circle which started its work in 2019. The Circle convenes public and private sector partners to tackle complex climate and nature challenges that threaten New Zealand’s future economic prosperity. Vicki and the Circle team have grown a significant coalition of the willing, and in collaboration with its partners, have completed over 25 major workstreams across agriculture, energy, seafood, tourism, and transport sectors. Vicki’s personal vision – Healthy People, Healthy Planet, Healthy Economy – aligns closely with The Circle’s mission, and she is deeply committed to achieving the vision of its founder, Sir Rob Fenwick.