Clock ticking to secure shipping’s global carbon solution
If shipping wants to secure its preferred global solution to the problem of decarbonisation it needs to accelerate progress and fend off regional alternatives
Trafigura’s new proposal to impose up to a $300 levy per tonne of CO2-equivalent on shipping fuel to boost the growth of low and zero-carbon fuels is an aggressive tactic, but the devil is in the detail and time is running out
THERE are less than 3,400 days to hit the 2030 emissions targets set by the International Maritime Organization.
Given the current rate of progress the shipping industry’s preference for a global solution is looking less likely.
The previous threats of theoretical moves from the European Parliament aiming to force the IMO into action have given way to tangible political process.
The European Parliament has launched another effort to include shipping in the European Union’s Emissions Trading System.
With the European Commission supporting the move include shipping in the carbon market, albeit through a different process, the question has moved on from “if” to “when” and “how” shipping will be incorporated into any ETS.
The likelihood of regional encroachment on global trade is a clear and present danger to the IMO’s global, but glacial, pace of consensus politics.
Trafigura’s new proposal to impose up to a $300 levy per tonne of CO2-equivalent on shipping fuel to boost the growth of low and zero-carbon fuels is an aggressive tactic.
The ramifications of such a market-based measure and an incredibly complicated, mandatory enforcement would be wide ranging.
While many of the details need to be thrashed out the general themes underscoring this proposal should generate traction rather than gather dust on the IMO shelf.
These private initiatives, alongside regional policy actions and the numerous decarbonisation efforts — most notably the collective push for the development of commercially viable zero emissions vessels by 2030 — should weigh on IMO delegates.
Its greenhouse gas strategy was agreed in April 2018, in what was regarded as a historic moment for an industry that had been widely perceived as a polluter that is unwilling to assume its responsibilities.
The strategy is a crucial and useful foundation. But this debate reveals yet again that by seeking common ground it’s not possible to aim for the best solution, which is what those participating in such an import debate should aspire to do.
The EU is close to a market-based measure and the IMO has yet to agree even on an efficiency-based short-term greenhouse gas measure.
Some delays are partly due to coronavirus disruptions but mostly they reflect fundamental flaws in IMO policy making.
Ammonia-fuelled engines are less than five years away, yet the debate to change regulations and set new safety standards to allow the fuel to be used on ships hasn’t even started.
Any discussion about a market-based measure cannot begin until 2023 and not be finalised until 2030 because of how the regulatory timetable is structured.
The strategy is also due to be revised in 2023. Every aspect, including the timelines, emissions targets and the market-based measures, is up for discussion.
Talk about market-based measures needs to be accelerated so emissions targets can be strengthened and technology and regional remits don’t not outpace international regulatory reform.
Introducing fundamental decarbonisation policies after 2030 may be too late.