International Chamber of Shipping backs levy-based market-based measure to set a price on carbon

International Chamber of Shipping backs levy-based market-based measure to set a price on carbon

industry market-based-measure proposal comes in addition to existing proposal for $5bn r&d fund

The International Chamber of Shipping, whose members are the national shipowner organisations around the world has reiterated its support for a global carbon levy on CO2 emissions from ships.

 

It has revealed a proposal to reduce the price difference between low and zero carbon fuels and current bunker fuels (mainly marine diesel which emits higher CO2 when used) and a “Climate Fund to raise money to speed up the adoption of zero carbon technologies and fuels.

 

In a press statement the ICS said it sees a threat from piece-meal regional market-based-measures.

 

It also said in the the statement that “According to papers handed to the International Maritime Organisation (IMO), the UN’s regulatory body on shipping, the levy would be based on mandatory contributions by ships trading globally, exceeding 5,000 gross tonnage, for each tonne of CO2 emitted. The money would go into an ‘IMO Climate Fund’ which, as well as closing the price gap between zero-carbon and conventional fuels, would be used to deploy the bunkering infrastructure required in ports throughout the world to supply fuels such as hydrogen and ammonia, ensuring consistency in the industry’s green transition for both developed and developing economies. 

 

The levy based MBM proposal sent tot he IMO comes in addition to an industry and government proposed $5bn R&D fund which create an additional mandatory $2 levy per tonne on marine fuel, would be used entirely to fund the research and development of alternative zero-carbon fuels and propulsion systems. ICS has called for this fund to be approved at an upcoming pivotal meeting of the IMO in November this year.

 

The ICS also said that the Fund would “calculate the climate contributions to be made by ships, collect the contributions, and give evidence they have been made”. ICS hopes that it would also support new bunkering infrastructure, so that new fuels, when developed, can be made available globally and from as many ports as possible. 

 

To minimise any burden on UN Member States and ensure the rapid establishment of the carbon levy, the framework proposed by industry would utilise the mechanism already proposed by governments for a separate USD 5 billion R&D Fund to accelerate the development of zero-carbon technologies, which the UN IMO is scheduled to approve at a critical meeting in November immediately following COP 26.

 

 

 

In the ICS announcement Guy Platen, ICS Secretary-General is quoted saying:

 

“What shipping needs is a truly global market-based measure like this that will reduce the price gap between zero-carbon fuels and conventional fuels.The rapid development of such a mechanism is now a vital necessity if governments are to match actions with rhetoric and demonstrate continued leadership for the decarbonisation of shipping. 

 

There’s no question that improvements in technology can enable the transition to zero-emission shipping. However, huge leaps must still be taken if we’re to achieve the readiness levels needed for deployment at scale. This includes building the necessary infrastructure to support such as transition.

 

“We need to be able to put zero emission ships in the water by 2030 without challenging price and safety issues. If the IMO lends it’s backing to our proposal, then we may yet be able to change this and deploy technologies economically and equitably.” 

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