Ahead of President Biden’s climate summit, shipping organisations have called on world leaders to urgently examine the role of market-based measures (MBMs) to ensure ambitious decarbonisation targets are met across the entire global maritime sector.
With the summit hosted by the US seen as a vital precursor to COP26 and the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC), shipping bodies want leaders to put their political weight behind the industry’s desire to eliminate the 2% of all global CO2 that the sector emits.
BIMCO, CLIA, International Chamber of Shipping, World Shipping Council and other industry groups have submitted a proposal to the IMO, calling for it to bring forward discussions around MBMs by several years.
These measures will be critical to incentivise the transition of the global fleet to new fuels and technologies, which will be more expensive than those in use today, according to the partners.
The industry bodies set out in their submission to the UN’s shipping regulator: “The ability to consider different candidate measures in parallel will be critical if [we are] to move forward with the urgency that the challenge of decarbonising shipping requires, given the urgent need to make progress on delivering [our] levels of ambition.”
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.
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.
For a pricing signal to work, there must be viable alternatives to fossil fuels although these alternatives do not yet exist for large trans-oceanic ships.
Development of alternative technologies would be enabled by a significant acceleration of IMO co-ordinated research and development (R&D) – to be financed by the industry – so that ocean-going ships will be able to switch to new fuels.
To this end, member states and industry have already put forward a mature proposal to create a US$5bn fund to provide the R&D needed to create the technologies to decarbonise the sector.
Industry leaders have also reiterated their call for nations to support this R&D proposal at the IMO.
The industry bodies added: “Fair and equitable MBMs are a viable policy option to transition to the new fuels and technologies that will be necessary to phase-out GHG emissions in the sector. We’re joining with industry colleagues to urge the UN and national governments to prioritise discussion on MBMs to make sure that shipping remains on course to meet vital decarbonisation goals.”
“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 urgency of the challenge requires leadership and a properly coordinated approach to catalyse and incentivise the transition to zero-emissions sector”.