ITF paper says feebate is best for a shipping MBM

ITF says feebate levy concept will help decarbonise shipping when in conjunction with other measures such as fuel standards and regulations

The International Transport Forum within the OECD has issued a report on how it thinks carbon pricing could work in shipping, saying that a feebate solution would likely work best


The report comes as the IMO’s marine environment protection committee was meeting in London to try and work though an impasse on levels of ambition for international shipping’s decarbonisation and how a potential market measure can be used as a “basket of measures”


Report author Olaf Merk at ITF said the paper has looked at all the options being discussed, and how existing market measures are used.


The recommendation for a feebate system is not dissimilar to the Japanese proposal at the IMO.


Mr Merk confirmed that a feebate scheme would be able to remove the price differences between future fuels which will be needed for decarbonisation of the industry, but that other measures will be needed to speed up the transition and to support early movers


One such early mover is AP Moller Maersk who alongside Spain gave a presentation during a side event at MEPC 79 to discuss their investment in methanol fuel production in Spain, where it says an investment of €10bn from various stakeholders will be needed.


While referring to commercial sensitivities that prevented them talking about fuel pricing contracts, confirmed that there is the need to move away from spot markets to building long term contracts with clean fuel developers to ensure there is enough fuel made. In Maersk’s case this is the green methanol needed for a fleet of new buildings on order.


However, the company also acknowledged that its future orderbook will all be dual fuelled to offer flexibility.

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