Container Shipping Quarterly
Special Report
The grim prognosis came just days after the IMO concluded its 81st Maritime and Environment Protection Committee ( MEPC ) meeting at the group ’ s London headquarters . The closely watched MEPC81 ended on a positive note , with the IMO declaring progress toward meeting interim benchmarks on the industry ’ s path toward being at or around net-zero by 2050 .
“ We strongly urge charterers , operators and shipowners to avoid passage through the area until there is no risk to the safety of seafarers .”
Narrowing the price gap
Discussions among IMO member states included a global fuel standard and a GHG pricing mechanism , the midterm measures required to decarbonize the shipping industry in line with the Paris Agreement . The MEPC agreed to finalize a comprehensive assessment of the impact the proposed measures would have on member states prior to MEPC82 , scheduled for Sept . 30 to Oct . 4 .
The MEPC ’ s next task is to work within the IMO ’ s Net- Zero Framework — a pathway for reaching net zero “ at or around 2050 ” — to address the details of those measures .
The World Shipping Council ( WSC ) said MEPC 81 provided an opportunity for all parties to review and discuss the many proposals on the table relating to the midterm measures to decarbonize the shipping industry , including its own “ Green Balance Mechanism .”
“ As we all prepare for the MEPC 82 meeting in September , it is essential that the work on technical and financial measures is undertaken with a clear focus on how they will deliver on our shared target of decarbonization ,” the WSC said in a statement March 22 .
At issue is the price differential between fossil fuels and sustainable alternatives that is now far too wide to make investment in green fuel production and infrastructure attractive .
Over the past few years , there has been strong support from shipowners for an economic measure to take the form of a carbon levy to build up a multi-billion-dollar global fund aimed at reducing the cost gap , but there are several different proposals before the IMO .
“ A financial measure , or GHG pricing mechanism , needs to bridge the price gap between fossil fuels and green fuels to enable their use in the world ’ s fleet and incentivize investment in green fuel production ,” the WSC said . “ Renewable fuel plants will only be built by energy providers if there is a clear demand for green fuels , and simply narrowing the price gap will not be enough to create a viable market .”
According to marine and energy technology group Wärtsilä Corporation , sustainable shipping fuels could reach cost parity with fossil fuels as early as 2035 , provided decisive emissions policies such as carbon taxes and emissions limits are set and enforced .
16 Journal of Commerce | April 8 , 2024 www . joc . com