February 22 ------ The shipping industry wants a simple, effective levy-based greenhouse gas (GHG) pricing mechanism to accelerate the uptake of zero-near-zero GHG emission (ZNZ) fuels and enable full-scale maritime decarbonization, according to the International Chamber of Shipping (ICS), one of the world’s principal shipping organizations that represents around 80% of the world’s merchant tonnage.
The International Maritime Organization (IMO) GHG working group meeting (ISWG-GHG 18) is taking place this week with an aim to further develop MARPOL Convention text, incentivizing decarbonization of shipping by 2050. “We are encouraged that there are now 51 co-sponsors, including the European Commission and ICS, of a joint submission which sets out fit for purpose text in support of a levy-based GHG pricing mechanism, with ships making annual contributions per ton of CO2 equivalent emitted to a proposed IMO GHG Strategy Implementation Fund,” Guy Platten, Secretary General of ICS, commented ahead of the IMO meeting.
“It is clear that there is increasing recognition by governments that a levy-based fund and reward mechanism, complemented by an IMO fuel standard, is the best way forward,” he said, adding that some Member States are not yet fully prepared to commit to the carbon tax. “We believe that the levy proposal, that is now supported by governments responsible for a large majority of the world’s shipping tonnage, as well as by the global shipping industry, provides the best and most pragmatic means of decarbonizing shipping at speed and scale. The shipping industry wants a simple, transparent and equitable system that can be put in place quickly and efficiently,” he concluded.
To remind, the ICS and 47 governments jointly submitted last month a text for the future mandatory GHG emissions pricing mechanism for the global maritime industry. As explained, the amendments to the IMO MARPOL Convention to be discussed this week are scheduled to be approved by the IMO Marine Environment Protection Committee (MEPC 83) in April. The joint submission by governments and ICS sets out convergent regulatory text for amendments to the IMO MARPOL Convention, which will require shipping companies operating ships on international voyages to make GHG contributions per ton of CO2e emitted to a new “IMO GHG Strategy Implementation Fund”.
Specifically, the key purpose of this mandatory GHG charge will be to reduce the cost gap between conventional marine fuels and zero/near-zero GHG emission fuels (such as green methanol, green methane including biomethane, green ammonia, green hydrogen, and certified biogenic marine fuels including the biogenic component of some biofuel blends) and, to incentivize the accelerated uptake of green energy sources. Revenue generated will be used to reward the production and uptake of ZNZ fuels, and the use of ZNZ technologies, whilst also providing billions of US dollars annually to support maritime GHG reduction efforts of developing countries.
As per the ICS, the quantum of the GHG contribution per ton of CO2e emitted has not yet been agreed upon by IMO Member States but is expected to fall within a range equivalent to between $60 and up to $300 per ton of conventional marine fuel oil consumed, depending on the agreed reward rate for the use of zero/near-zero GHG marine fuels and the level of revenue to be allocated annually to support developing countries.
Source: offshore-energy.biz
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