Following the historic decision at the International Maritime Organization of nation states from around the world to mandate net-zer0 greenhouse gas emissions from shipping by 2050, much of the detailed work has been underway. In a horribly, grossly, simplified explanation, the IMO’s work basically boils down to making two (or two-ish) decisions on the so-called “mid-term” measures. Firstly, what, exactly, will be the form of the “technical element” – which is a goal-based marine fuel standard regulating the reduction of marine fuel’s greenhouse gas intensity. And, secondly, what, exactly, will be the form of the “economic element”, which will be some kind of pricing mechanism.
Today, the IMO is due to wrap up the critical meeting “ISWG-GHG 18” and it is hoped that there will be some progress.
Last week, just as the Shipping Australia newsletter was published and the website was updated, Guy Platten – secretary general of the International Chamber of Shipping (a global shipping trade association of which Shipping Australia is a member) released a statement ahead of the ISWG-GHG 18 meeting.
“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 tonne of CO2 equivalent emitted to a proposed IMO GHG Strategy Implementation Fund.
“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. Next week will hold some difficult discussions as some Member States are not yet fully prepared to commit but the reality is that only via a global solution will we meet our net zero targets.
“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 de-carbonising shipping at speed and scale. The shipping industry wants a simple, transparent and equitable system that can be put in place quickly and efficiently.”
If the levy proposal (which would be the “economic element” of the IMO’s mid-term measures to bring about net zero shipping by 2050) is implemented then shipping companies operating ships on international voyages would be required to make contributions per tonne of carbon dioxide (or equivalent) emitted to a new “IMO GHG Strategy Implementation Fund”.
The proposed mandatory GHG charge is designed to reduce the cost gap between conventional marine fuels and zero/near-zero GHG emission (ZNZ) 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 incentivise the accelerated uptake of green energy sources, the International Chamber of Shipping explains. Revenue generated will be used to reward the production and uptake of ZNZ fuels, and the use of ZNZ technologies, while also providing billions of US dollars annually to support the maritime GHG reduction efforts of developing countries.
Amendments to the International Convention for the Prevention of Pollution from Ships (commonly known as “MARPOL”) that are being discussed in ISWG-GHG 18 are scheduled to be approved by the International Maritime Organization in April this year.
