Key ideas: Transportation decarbonization
Unlike most road vehicles, aviation and shipping vessels cannot be easily electrified. Reducing aviation and shipping emissions relies on nascent technological pathways, such as alternative fuels, zero-emissions vessels, and flight rerouting. CATF seeks to reduce aviation emissions by conducting technical and market analyses to identify barriers and opportunities in green transportation, engaging with stakeholders to foster collaboration and promote growth for low-carbon fuels, and strengthening policy research and education to promote low-carbon transportation. We think CATF’s technical analysis is especially strong, providing critical evidence to address key research gaps and shift the narratives around low-carbon transportation. CATF’s cross-sectoral expertise, as well as its industry and policy engagement channels, enhance its analysis and turn research recommendations into action at scale.CATF's transportation decarbonization program aims to reduce emissions from the transportation sector to zero by mid-century. Its team concentrates on transportation modes that are difficult to electrify, such as aviation and maritime shipping, which are predicted to rely on alternative energy carriers like hydrogen and ammonia. 18 The team supports work to develop and scale low-carbon fuels and vehicles, along with their requisite infrastructure.
CATF’s transportation decarbonization program is mostly focused on the U.S. and EU because it claims these geographies (1) hold the most feasible political opportunities and investments to launch alternative fuel markets and (2) are centers of influence for relevant international bodies such as the International Maritime Organization (IMO) and International Civil Aviation Organization (ICAO).
We also include CATF’s work on hydrogen in this program because clean hydrogen is a key component in most of the main alternative propulsion technologies for long-distance aviation and shipping .19 The hydrogen team’s primary focus is on reducing emissions from existing hydrogen production and end-use deployment in sectors such as steel, chemicals, cement, ammonia for fertilizers, methanol, and oil refining. Its secondary focus is promoting low-carbon hydrogen for scaled next-generation applications, such as for aviation and ammonia for shipping. Its efforts have mainly focused on the U.S., EU, and Middle East, but it plans to continue expanding globally.
Strategies Technical Analysis CATF conducts technical and market analyses to identify innovation needs and market barriers for each transportation pathway . For example, CATF studied how ammonia ships can be phased in under the EU’s maritime fuel standards at a cost equal to or cheaper than conventional fuel oil, analyzed enabling technologies for net-zero aviation, and recommended strategies for minimizing non-CO2 effects of aviation. We think these analyses support the global scaling of low-carbon heavy transportation by increasing public awareness, informing policy and regulatory design, promoting innovation, and shaping the market. Complementary technical analysis on hydrogen includes a model for the full lifecycle emissions of hydrogen production based on jurisdiction and production pathway, as well as a cost model for hydrogen and ammonia production.
CATF’s transportation and hydrogen efforts help direct low-carbon resources, such as hydrogen and biomass, to sectors with no better emission-reduction alternatives . For example, its assessment of the role of low-carbon hydrogen in the power sector concluded that, while technically feasible, using hydrogen as a fuel for decarbonizing power generation is unlikely to be economically viable at a large scale compared to other options, such as solar power. It also advocates for the shipping sector to look beyond biofuels and invest in other compelling alternative fuels, such as e-ammonia.20 This is because (1) shipping has more viable alternatives for decarbonization than aviation, and (2) the shipping industry may incur unnecessarily high costs if it were to overcommit to biofuels, entering into a ‘bidding war’ with the aviation industry.21
Industry Engagement CATF collaborates with companies and technical experts—such as vehicle manufacturers, fleet owners and operators, and fuel suppliers—to accelerate the commercialization of low-carbon heavy transportation. This includes activities such as:
Validating and aligning on CATF’s analysis and findings , including major innovations and market gaps. Fostering cross-sector collaboration to support the demonstration and adoption of new technologies, such as low- or zero-emission vessels. Promoting market growth for low-carbon fuels —for example, by facilitating a global dialogue between emerging fuel producers and buyers to align potential supply and demand, strengthen the market ecosystem, and facilitate offtake agreements. Engaging with the aviation and fuel companies to develop opportunities for contrail mitigation.Policy Research and Education CATF promotes policies that support low-carbon transportation innovation through incentives, mandates, and performance standards.
U.S. policy: In the U.S., CATF primarily focuses on clean fuel standards and effective alternative fuel tax credits, as described below:
Developing clean fuel standards: Until recently, CATF was leading the development of a federal carbon-intensity-based fuel standard that would decarbonize all transportation fuels, including electricity, by 2050. It was also encouraging a federal framework for achieving the IMO’s net-zero emission targets. Under the Trump administration, CATF has deprioritized this work due to diminished feasibility, pivoting its transportation policy work to focus more on state-level opportunities, most notably on low-carbon fuel standards. Designing alternative fuel tax credits: CATF’s hydrogen team has also been heavily engaged in designing the federal 45V tax credit for hydrogen production, claiming a key role in shaping the final guidance.22 It was also involved in establishing the U.S. hydrogen hubs , regional networks of low-carbon hydrogen producers, consumers, and enabling infrastructure. CATF highlights why hydrogen hubs should be integrated with critical end-use sectors, like shipping and steel. EU policy: In the EU, CATF’s aviation priorities include clean fuel deployment, contrail mitigation, analyzing the appropriate role of carbon removal in clean aviation, and working to broaden the support for EU Emissions Trading System expansion by highlighting the market opportunities that expansion would create for low-carbon fuel producers in the U.S. and elsewhere. CATF’s shipping priorities are supporting the development of low-carbon marine vessels and fuels and promoting stronger FuelEU Maritime implementation.23 It also advocates for regulations to guardrail the use of hydrogen and biofuels.
International policy: CATF continues to track progress at the IMO and works with partners to (1) build support for ambitious regulations, and (2) mitigate U.S. opposition to the IMO’s proposed Net Zero Framework .
Theory of Change for CATF’s Transportation Decarbonization Program We developed a theory of change to better understand and evaluate how CATF’s transportation decarbonization program can lead to lower GHG emissions (Figure 3 ).
Figure 3: Theory of change diagram for CATF’s transportation program
Examining the Assumptions Behind the Transportation Decarbonization Program We note four key assumptions in its theory of change:
CATF’s research and analysis have an additive impact on transportation narratives, policies, and industry action (medium certainty) After evaluating its publications and consulting with external experts, we think CATF’s technical analysis is exceptionally strong. We find that CATF’s tools and reports address critical technical gaps in the sectors for which (1) research is still ongoing, (2) information is hard to access for communities, civil society, or policymakers, or (3) resources are needed for creating or implementing specific standards and policies. One example is its work in modeling the resource demands of hydrogen production, including energy and water feedstocks. We think this work could help avoid future uncertainties around incentive structures, such as those that arose for the 45V tax credit.24
We also think CATF has leveraged its research to highlight key emerging ideas, providing evidence to shift incumbent narratives and promoting high-impact, neglected pathways to reduce transportation emissions. For example, it has contributed novel arguments to the transportation decarbonization discourse by writing on hydrogen and biomass prioritization as well as contrail mitigation. CATF’s upcoming research on the role of carbon removal in reducing aviation emissions will also fall into this category.
CATF’s policy research and education efforts increase the likelihood of adoption of impactful policies (medium certainty) CATF has a strong track record of success contributing to climate policy in the U.S. For example, CATF helped secure key climate provisions in the bipartisan Energy Act of 2020 and provided technical input to authorization and funding measures in the IIJA. It also successfully advocated for the IRA and its provisions for cutting methane pollution, advancing neglected low-emissions technologies, and making tax incentives and grants stackable.25
We have low certainty that CATF will achieve large wins in the transportation sector under the current U.S. political climate. However, we believe CATF’s ambitious federal measures may become feasible again under a future administration, and we think it is valuable to maintain the team's capacity so that it can quickly respond to future policy windows. We also see opportunities for near-term progress in key states, such as California.
We think the EU is a particularly important geography for reducing aviation and shipping emissions, with some of the most progressive transportation policies in the world. Upcoming policy windows include the reviews of the aviation ETS discussing potential geographical expansion, and reviews of the EU’s fuel standards for aviation and shipping. The EU also implemented the world’s first policy on non-CO2 emissions, mandating that aircraft operators report their non-CO2 emissions.26 It is increasingly recognizing the significant warming caused by contrails and has opened up research funding for contrail mitigation, but has not yet signaled that it will be a regulatory priority.27 CATF has previously helped secure wins such as the EU Methane Regulation and has a history of engagement on the ETS.
Although the EU is a policy leader for green transportation, it has shown less openness toward climate action since the 2024 election, and significant pushback is expected for many of the policy windows highlighted above.28 We think CATF’s style of pragmatic reasoning could resonate with current EU priorities for industrial competitiveness. Due to its deep expertise both in the U.S. and EU, we think CATF could also be a significant voice to mitigate anticipated pushback from the U.S. on policies with international ramifications, such as an ETS geographic expansion.29
Regulations will influence the private sector to transition to low-carbon technology (high certainty) We think policy is a necessary lever to influence private-sector decarbonization trends. For example, pricing emissions can narrow the green premium for low-carbon shipping technology, thereby enhancing the business case for low-carbon technologies such as e-fuels.
Furthermore, well-designed policies with ambitious targets, like the FuelEU Maritime initiative , can provide long-term market signals to reduce investor uncertainty. The IMO’s proposed fuel intensity targets have been credited for giving a signal toward low-carbon fuels—since their adoption would mean that incremental solutions are unlikely to remain competitive in the mid-late 2030s—but there remains uncertainty regarding whether they will be adopted and their ambition levels, which may lead some investors to take a wait-and-see approach.30
While the industry is still at the relatively early stages of its transition, strong policy signals can shift incentives and deter the industry from locking into infrastructure that relies on transitional or conventional fuels, such as biofuels and LNG for the shipping industry.31 Preventing such lock-in is crucial given that these fuels are cheaper and more mature than e-fuels but offer less climate mitigation potential, and shipping vessels have long lifetimes of several decades.32
The IMO’s global role in international coordination also reduces the risk of carbon leakage, where firms shift activity to avoid stricter national or regional rules. Harmonized regulations ensure a level playing field across the sector, increasing the certainty of demand for low-carbon technology.
In addition to engaging with policymakers, CATF also directly engages with industry to communicate the business opportunities for transitioning to low-carbon aviation and shipping.
Low-carbon technologies for shipping and aviation can become cost-competitive and scale to meet the needs of the sectors (medium certainty) Both low-carbon shipping and aviation currently come with high green premiums compared to conventional technologies.
For shipping, we have medium certainty that a combination of declining costs for low-carbon technologies and increasing regulatory pressure on fossil fuel prices could plausibly lead to price parity. In fact, forecasts for reaching e-fuel parity range from 2030 to 2040.33 Notably, CATF found that under existing regulations, e-ammonia ships built today could already achieve cost-competitiveness over their lifetime compared to conventional vessels.34 We think reducing costs for low-carbon shipping is highly contingent upon scaling renewable energy, increasing the availability of green hydrogen, and building out global e-fuel infrastructure.
For aviation, we have low certainty that either alternative fuels or hydrogen-based aircraft can scale to meet the needs of the sector:
Scaling biofuels will be challenging due to feedstock constraints , including the low availability of waste feedstocks and the emissions associated with land-use change in crop-based biofuels.35 We do not think a promising route to scaling e-kerosene production has been demonstrated, given its high cost and energy demand. Hydrogen aviation is still in its infancy , and the field will require significantly more support from philanthropic and public funds to accelerate its commercialization. We have low certainty that the field will attract sufficient funds to reach a high-innovation scenario with a substantial mitigation impact. We address the feasibility of decarbonizing aviation as one of our key uncertainties and discuss the potential and limitations of leading technologies in our strategy report on reducing aviation emissions .
18 “Great progress has been made in battery-based electrification, but certain vehicles – including heavy-duty vehicles like long-haul trucks, transoceanic marine vessels, and aircraft – will be difficult or impossible to power with batteries and will require the use of low- and zero-carbon fuels like hydrogen and ammonia to decarbonize” CATF, n.d. [accessed 30 Oct 2025]
19 The main technologies we describe for aviation are cryogenic hydrogen, cryogenic methane, and sustainable aviation fuels. For shipping, they are ammonia, methanol, and hydrogen. For more information, see our strategy reports for aviation and maritime shipping .
20 E-ammonia is ammonia produced using renewable electricity, hydrogen, and nitrogen gas.
21 “As such, the aviation industry will want to mitigate the related financial and logistical challenges by maximizing its use of bio-SAF, so it is unlikely to get outbid for the available supply of biofuel, especially by industries that can turn to other options.” CATF, 2025
22 “Following substantial engagement from CATF and its partners, the U.S. Department of the Treasury released its long-awaited proposed regulations for the Section 45V Hydrogen Production Tax Credit (PTC) in late 2023 — a major step toward building a credible clean hydrogen market in the United States. We also played a key role in shaping the final guidance throughout 2024, advocating for policies that promote truly clean hydrogen while preventing loopholes that could increase emissions.” CATF, 2025
23 “Green maritime shipping corridors are an avenue for coordinating across stakeholder groups in specific high-potential geographies to align incentives, test-drive new technologies, target investments, and build public-private partnerships.” Our Shared Seas, 2023
24 “The worries, shared by the Clean Air Task Force, the Environmental Defense Fund and the Union of Concerned Scientists, are grounded in a study from a team of scientists at Princeton University. It concludes the looser accounting guidelines influential industry players are seeking would enable them to make the energy-intensive fuel without adding enough new clean power to local electricity grids to produce it.” Halper, 2023
25 Energy Act of 2020: CATF (2020) ; IIJA: CATF (n.d.) IRA: CATF (2022)
26 “…the co-legislators stressed the need to address these non-CO2 effects and mandated the Commission to establish a monitoring, reporting and verification system for these effects, to be operational from 1 January 2025.” European Commission, 2024
27 “As confirmed by a report from the European Aviation Safety Agency (EASA), the non-CO2 effects of aviation activities accounted for more than half (66%) of the sector’s net climate forcing in 2018.” European Commission, n.d. (accessed July 31, 2025) “It is complemented by financial support from the EU ETS Innovation Fund to mitigate the non-CO2 impacts, as well as the Horizon Europe research programme.” European Commission, 2024
28 “EU policymakers have dealt several critical blows to their much-vaunted European Green Deal since the end of 2023, when opinion polls suggested a significant rightward shift before the 2024 parliamentary elections.” The Guardian, 2025
29 “With a fresh opportunity to price aviation’s pollution on the horizon, the EU must not let history repeat itself and stand true to its principled commitment to climate action in spite of inevitable, and likely intensive, US pressure – Senator Thune, architect of the anti-ETS bill, is today the majority leader in the Senate.” Carbon Market Watch, 2025
30 “The introduction of a fuel intensity target (base GFI), which sets to decrease by at least 65% by 2040, means that incremental solutions are unlikely to remain competitive in the mid/late 2030s” “This raises concerns about whether the fund will be able to simultaneously support early deployment of ZNZs and deliver the promised support for a just and equitable transition. This may therefore lead to a cautious, wait-and-see approach.” IDDRI, 2025
31 “If investors expect pressure to reduce carbon emissions (regulatory or otherwise) to be delayed or weak, transition pathways that can make use of mature but less-scalable or sustainable elements (e.g., bioenergy, LNG) may gain an advantage. If expectations are that the speed of the transition will be in line with the 1.5-degree pathway described in Chapter 1, then these pathways may feature risks of disruption and stranded assets.” UMAS, 2021
32 “Given that the life of shipping investment spans over several decades, there is therefore a risk of carbon lock-in and/or stranded assets to public and private investors in the sector.” IDDRI, 2025
33 “Some estimates show that such policy support could help achieve price parity between green ammonia and current fossil fuels between 2030 and 2035.” ClimateWorks, 2025 ; Fuel production cost estimates and assumptions. Lloyd’s Register, 2019
34 “All three ammonia fueled ships evaluated were able to comply with or outperform the new FuelEU Maritime targets at a cost equal to or below that of a conventional heavy fuel oil powered ship.” CATF, 2024
35 Waste availability: “However, demand is approaching the supply limits of the most-used wastes and residues.” IEA, 2022 ; biofuel: “In the high-demand scenario where jet fuel is eliminated, we’d need around 300 million hectares of cropland. That’s an area the size of India." Sustainability by Numbers, 2023
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