Container Shipping Quarterly
Special Report
“ Achieving net-zero in shipping by 2050 will require all the tools in the toolbox , including sustainable fuels ,” Roger Holm , Wärtsilä ’ s executive vice president , said in a report released at the conclusion of MEPC81 . “ As an industry , we must focus on coordinating action across policymakers , industry and individual operators to bring about the broad system change required to quickly and affordably produce a mix of sustainable fuels .”
Searching for the right approach
The US-based non-profit Environmental Defense Fund ( EDF ), which is a consultative member of the IMO , said there was strong support from many IMO member states at MEPC81 for a universal GHG price for the shipping industry , including those in the Pacific and Caribbean islands , the European Union and Canada .
Getting all member states — not to mention the private sector — to agree on one GHG pricing mechanism , however , won ’ t be easy , and the clock is ticking . The IMO has said previously it would settle on a global pricing plan by 2025 and roll it out in 2027 .
A proposal from the International Chamber of Shipping , the Bahamas and Liberia , for example , calls for ships to make a mandatory flat rate contribution per ton of CO2 equivalent ( CO2e ) emitted to a “ Zero Emission Shipping Fund ” administered by the IMO . The EU and ICS co-sponsored a paper on the advantages of such a levy .
Under the WSC ’ s proposed Green Balance Mechanism , money accrued from fees for carriers using
Container operations accounted for almost a quarter of the 1 billion tons of CO2 emissions from maritime shipping in 2023 . Shutterstock . com
fossil fuels would be allocated to those using green fuels to equalize the average cost .
Japan ’ s approach , known as a “ feebate ,” proposes that the contributions paid by ships are used to reward the use of zero-emissions fuels and are calculated based on the resulting GHG savings .
However , China and Argentina are not advocating a price for every ton of CO2 emitted , which the EDF said would be cause for concern given that there needs to be a financial incentive to drive shipping ’ s energy transition .
The EDF noted that China ’ s proposal could collect some revenue based on the sale of “ remedial units ” that
“ Despite efforts to improve safety , both groups remain active , and the Houthis have threatened to expand their attacks .”
ships must purchase from a fund if they cannot meet the requirements of the fuel standard .
“ But this will be very limited and is in no way comparable to the economic measures [ greenhouse gas pricing ] or those being examined by the IMO in its comprehensive impact assessment ,” the EDF said .
email : greg . knowler @ spglobal . com www . joc . com April 8 , 2024 | Journal of Commerce 17