The Week in Alt Fuels: A Potential Regulatory Quagmire

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  • China, Saudi Arabia and the UAE have critiqued DNV’s use of a well-to-wake (WtW) scope to model GHG trajectories for the CIA.
  • The countries contend that the IMO’s upcoming mid-term measures should not be based on a WtW framework.

Several countries argue that a report on a global carbon tax and fuel standard overlooks critical factors and presents misleading conclusions, reports Engine.

These nations have called for additional scrutiny of the comprehensive impact assessment (CIA) report submitted to the IMO in June by the United Nations Conference on Trade and Development (UNCTAD).

The Week in Alt Fuels: A potential regulatory quagmire

The CIA report was based on a study by class society DNV and evaluated various scenarios, including implementing a global carbon levy and a global fuel standard for marine fuels.

It found that a higher carbon levy of $150-300/mt of CO2-equivalent (mtCO2eq) would lead to a smaller reduction in global GDP by 2050 (0.08% reduction) compared to a lower levy of $30-120/mtCO2eq (0.14% reduction).

DNV noted that shipping sector could generate $776-982 billion in revenue between 2027-2050 through IMO mid-term measures. But to make that happen the measures will have to include a global fuel standard, a carbon levy of $150-300/mtCO2eq and a revenue disbursement system without flexibility or feebate mechanisms.

China, Saudi Arabia and the UAE have critiqued DNV’s use of a well-to-wake (WtW) scope to model GHG trajectories for the CIA. They contend that the IMO’s upcoming mid-term measures should not be based on a WtW framework.

Instead, they argue, GHG emission trajectories should assessed based on tank-to-wake (TtW) emissions, as only these emissions fall under the purview of global shipping.

Read the full article here. 

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Source: Engine