Industry and governments are increasingly looking to develop financial measures to accelerate decarbonisation in shipping.
The moves come in recognition that regulation might not be enough to transition the industry, and additional commercial incentives will be required to motivate shipowners to change.
An idea from the Marshall Islands and Solomon Islands of a tax on fuel starting at $100 per tonne of carbon is just one proposal on the table to be discussed by the International Maritime Organization this June.
There have also been increasing calls from industry players for a price to be put on the carbon to encourage shipping firms to switch to low-carbon alternatives.
Rasmus Bach Nielsen, global head of fuel decarbonisation at trader Trafigura, recently said: “There’s a huge risk for the shipping industry if it does not push this up the agenda.”
He called for an effective market-based measure to incentivise the use of low and zero-carbon fuel. His call was recently backed by dry bulk charterer giant BHP.
A key move towards this is the European Union emissions trading system for shipping that is set to start on 1 January. But this is a regional scheme rather than global.
Clearing market
Clearing houses such as the European Energy Exchange are already eyeing the new trade. Shipbrokers BRS, Clarksons and Affinity (Shipping) launched carbon desks in late 2020 to enter the anticipated market.
The proposal that has drawn most attention has come from Japan, Liberia, Singapore and Greece. It proposes a levy on marine fuel to generate a $5bn war chest to fund research and development into decarbonisation technology.
It is based on a proposal that was originally made, among others, by the International Chamber of Shipping and Bimco, and has been taken up by national governments at the IMO.
The estimated $2 per tonne levy on fuel required will bring very little extra cost to shipowners. But it would provide a financial resource to invest in research that shipping companies, shipbuilders and ship machinery manufacturers might not otherwise be able to justify.
