A group of shipping associations is calling for regulators to bring forward discussions on market-based measures (MBMs) to accelerate the decarbonisation of the industry.
The International Chamber of Shipping, Bimco, Cruise Lines International Association and the World Shipping Council have submitted a paper to the International Maritime Organization calling for an international pricing mechanism for carbon.
The group believes that by putting a price on carbon emissions, shipowners will be encouraged to switch to alternative fuels.
“MBMs put a price on CO2 emissions to provide an economic incentive for a sector to reduce its emissions by narrowing the price gap between fossil fuels and zero-carbon fuels,” the associations said in a joint statement.
“Shipping leaders believe that now is the time for the IMO member states to consider the role of MBMs so that measures can be developed and implemented to facilitate the adoption of zero-carbon technologies and commercially viable zero-carbon ships.”
The industry grouping pointed out that a viable supply of alternative fuels and technology will have to be developed along with the MBMs.
An idea for the development of a $5bn research and development fund from a fuel levy, originally proposed by industry groups, now has the backing of several governments and is progressing through the IMO.
Realistic option
It is hoped the R&D fund will develop the technology to make the use of alternative fuels a realistic option for shipowners.
“The decarbonisation of international shipping will depend on out-of-sector stakeholders developing market-available zero-carbon technologies and fuels and the maritime sector will need the technologies to use these,” the industry groups said.
“The urgency of the challenge requires leadership and a properly coordinated approach to catalyse and incentivise the transition to zero-emissions sector.”
The move to develop a global MBM comes as the European Union is poised to establish its own regional shipping emissions trading scheme that threatens to distort global decarbonisation measures agreed under the IMO.
There has also been a proposal from the Marshall Islands and the Solomon Islands for a $100-per-tonne tax on carbon. The two Pacific nations propose some of the funds should be used for R&D and some to help developing countries combat climate change.
Denmark, France, Germany and Sweden have also submitted a paper to the IMO calling for MBMs to be adopted to incentivise the shift to cleaner fuels.
It estimates that currently a greenhouse gas levy, or carbon tax, in the region of $250 to $400 per tonne of carbon emitted would be required to encourage shipowners to shift to zero-carbon fuels. That equates to between $700 and $1,200 per tonne of fuel.
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