ICS sets out plan for ‘world first' global levy on carbon emissions from ships

The International Chamber of Shipping (ICS), has announced a comprehensive proposal for a global levy on carbon emissions from ships. If implemented, the ICS says it would be a world first for any industrial sector.

ICS sets out plan for ‘world first' global levy on carbon emissions from ships
Photo: pxfuel.com

The proposal, which is supported by the Intercargo trade association for dry cargo shipowners, was submitted to the International Maritime Organization on Friday.

The ICS represents the world’s national shipowner associations and more than 80% of the merchant fleet. It is calling for an “internationally accepted market-based measure to accelerate the uptake and deployment of zero-carbon fuels.”

According to the plans, 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.

In its statement revealing the plan, the ICS said that the sea-freight industry is “desperate to see zero-carbon ships brought to the water by shipyards by 2030.” However, the ICS warns that at current rates of production, “zero-carbon fuels are not commercially available at the scale needed for the global fleet.” Therefore, the organisation argues that its proposed carbon levy would expedite the creation of a market that makes zero emission shipping viable.

In a statement, Guy Platten, secretary general of ICS, explained why he believes a global levy on carbon emissions is the way forward:

“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.”

Platten added that the proposals would help with the common goal of putting zero emission ships into operation by 2030:

“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.”

Interestingly, the ICS points out that its opinion on the global levy differs to that of the Commission of the European Union:

ICS believes that a mandatory global levy based MBM is strongly preferable over any unilateral, regional application of MBMs to international shipping, such as that proposed by the European Commission which wishes to extend the EU Emissions Trading System to international shipping. A piecemeal approach to MBMs, (the EU ETS will only apply to about 7.5% of global shipping emissions), will ultimately fail to reduce global emissions from international shipping to the extent required by the Paris Agreement, whilst significantly complicating the conduct of maritime trade.

Continuing the theme, Platten rounded off his statement by saying:

“Adopting our proposal for a levy-based system, will avoid the volatility that exists under emissions trading systems, such as the EU ETS – which in the case of shipping, seem to be more about generating revenue for governments from non-EU shipping, than helping shipping to decarbonise. A levy based system can give the industry price certainty, and more stability for making investment decisions in zero –carbon ships and developing emissions saving technology.


Photo: pxfuel.com

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