Call for Aggressive Policies from Global Shipping Regulatory Body


  • Aggressive commitments have been initiated towards more than 500,000 customers to remove greenhouse gas emissions from global trade by 2050.
  • The World Shipping Council (WSC) have urged the International Maritime Organization (IMO) to draft much more ambitious rules for the industry in technical meetings scheduled for later this year.

A recent news article published in the Seatrade Maritime News states that carriers urge IMO to accelerate decarbonisation of shipping.

IMO Marine Environment Protection Committee

Representing the world’s largest containers line WSC has delivered a set of six elements that “must be included” in any revised framework to be drawn up in a meeting of the IMO’s 78th IMO Marine Environment Protection Committee scheduled for June this year.

“If we are going to decarbonise, we must have a predictable global regulatory system through the IMO,” said WSC President, John Butler.

“As the update to that strategic plan takes place in the course of the next 12 months, we want to make sure that the plan is up to doing the job. In support of that objective, we’ve identified six elements that we believe must be part of the new IMO strategic plan in order for that plan to work.”

The six “critical pathways” need to be clearly defined this year to put the industry on track to zero carbon emissions well ahead of the current IMO commitment to reduce the industry’s carbon footprint by 50% by 2050.

What are the recommendations?

The recommendations the WSC wants incorporated into any revised strategy document include: the adoption and definition of a carbon price to be levied on fossil fuels that would incentivise the switch to clean energy, a detailed life cycle analysis from “well to wake” for all alternative fuels, a clear plan for the introduction of fuel supply development and green corridors as well as greater clarity on newbuild standards and R&D investment from the industry.

Transparency and clarity

Long-term transparency on all of the above points, said Hapag-Lloyd Chief Executive, Rolf Habben Jansen, would be required to accelerate the transition.

“We need some long-term clarity on what is going to be allowed and what is going to be the level playing field and it’s not just us it’s also carbon neutral or zero emission fuel suppliers. Why would you invest billions into that if you have no clarity on whether some of that is going to be allowed or you can ever make it economically viable?”.

Heat from customers like IKEA who have made a commitment to be carbon positive by as early as 2030, is driving the container industry’s need to move faster than the rest of the industry, said ONE Chief Executive Officer, Jeremy Nixon.

Net zero by 2050

“We’ve already made the commitment to go to net zero by 2050. We’re already talking about getting ahead of the IMO in terms of our own carbon emission targets. We are starting to see that we should be able to achieve the 40% reduction by 2030, so can we move quicker,” Nixon said.

With estimates that it will cost anywhere upwards of $1.5trn to green shipping worldwide, even armed with bumper profits from the last two years, Nixon said, it would be impossible for container lines to deliver the changes required in isolation and that there were huge potential pitfalls that could block the transition if the industry was unable to create a pathway to decarbonisation this year.

$1.5 trillion of investment

“There’s talk of $1.5 trillion of investment going to be needed over the next 20 years by the shipping industry, we are going to have to leverage our balance sheets and spend a lot of money building forward, but we also need to make sure that those investments are going to be future proof and we don’t end up with stranded assets,” he said.

“We may be getting a little bit ahead of government here, but we want to work with the regulators, the IMO and work with the governments that make up the IMO and work together as an industry to decarbonise as quickly as possible and to reach quick consensus and agreement about what will be the regulations and the protocols needed to accelerate that,” he said.

“If we don’t get the industry to move at the same pace then the scope 1, scope 2, scope 3 emissions get out of sync and then it’s difficult, but by moving together we can speed up and get economies of scale and move much quicker,” said Nixon.

“The whole thing will only accelerate when we all have a longer term framework in which we have to invest and that is not just us but especially those that will either with or without us invest in the fuels.”

Carbon price

One of the key points to be raised was the definition of a carbon price to help make clean fuels more attractive. Estimates that green fuels could cost $2,000 per tonne, almost three times current bunker fuels would need to be addressed in this year’s MEPC meeting.

While the WSC did not give a guideline on where it believed the carbon price should be set, Butler said it was time to define a number that would allow the industry, fuel suppliers and its customers to plan ahead. “We’re urging the IMO to have the discussion about what is the right number and how does this tool best serve the purpose?” said Butler.

Likewise there would need to be a way to compare all possible future fuels taking into account the well to wake lifecycle analysis of GHG emissions. “The entire emissions profile of the fuel cycle must be considered in setting standards,” he said.

Challenges ahead

One of the greatest challenges would be creating the green corridors required to make the switch to these new fuels possible. Implementing changes in a coordinated fashion “If we don’t flip the switch in the whole world at the same time, we risk making the situation harder,” he said.

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Source: Sea Trade Maritime