The International Chamber of Shipping (ICS), the world trade association of ship operators, was the first branch of industry to submit a comprehensive proposal for a global tax on CO2 emissions from ships.
ICS, which represents the world’s national shipowners’ associations and more than 80 percent of the merchant fleet, submitted a motion to the International Maritime Organization (IMO) last week calling for an internationally recognized market-based measure (MBM) to expedite admission and Use of carbon-free fuels.
According to papers submitted to the IMO, the United Nations regulator for maritime transport, the levy would be based on compulsory contributions from ships that are traded around the world and exceed 5,000 gross tonnes per tonne of CO2. The money would flow into an “IMO climate fund”, which not only closes the price gap between carbon-free and conventional fuels, but would also be used to build the bunker infrastructure required in ports around the world for the supply of fuels such as hydrogen and ammonia and to ensure that Consistency in the green transition of industry for both developed and developing countries.
Shipping is responsible for around 2 percent of global CO2 emissions, and the IMO has recognized the urgent need for decarbonization. The industry is keen to ensure that shipyards will put CO2-free ships on the water by 2030. At current production rates, however, carbon-free fuels are not commercially available on the scale needed for the global fleet. The CO2 tax is intended to accelerate the creation of a market that enables emission-free shipping.
“What the shipping industry needs is a truly global market-based measure (MBM) like this that will reduce the price gap between carbon-free fuels and conventional fuels,” said Guy Platten, ICS general secretary.
Rapid development of such a mechanism is now a vital necessity if governments are to balance action with rhetoric and demonstrate continued leadership in decarbonizing shipping, he noted.
“There is no question that technological improvements can enable the transition to zero-emission shipping. Big leaps still need to be made, however, if we are to achieve the readiness required for scale deployment. This also includes setting up the necessary infrastructure to support such a transition, ”said Platten.
“We have to be able to put zero-emission ships into the water by 2030 without questioning price and safety problems. If the IMO supports our proposal, we may still be able to change this and use technology economically and fairly, ”he added.
The planned IMO climate fund would calculate, collect and prove the climate contributions to be made by ships.
ICS also hopes to support a new bunker infrastructure so that new fuels, when developed, can be made available worldwide and from as many ports as possible.
In order to minimize the burden on UN member states and ensure the rapid introduction of the CO2 tax, the framework proposed by the industry would use the mechanism already proposed by the governments for a separate R&D fund of US $ 5 billion, which consists of a mandatory $ 2 per tonne of marine fuel levy to accelerate the development of carbon-free technologies, which the IMO is due to approve at a meeting in November.
ICS believes that a mandatory global tax-based MBM is urgently preferable to a unilateral, regional application of MBM to international shipping, as proposed by the European Commission, which wants to extend the EU emissions trading system to international shipping.
A step-by-step approach to MBM (the EU ETS will only apply to around 7.5 percent of global shipping emissions) will ultimately not reduce global emissions from international shipping to the extent required by the Paris Agreement, while making shipping behavior much more difficult Trade, said ICS.