International Chamber of Shipping (ICS) has put forward a comprehensive proposal for a global levy on carbon emissions from ships, in what would be a first for any industrial sector.
Specifically, ICS presented a submission to the UN on Friday 3 Sept, calling for an internationally accepted marketbased measure to accelerate the uptake and deployment of zero-carbon fuels.
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.
To remind, shipping is responsible for approximately 2% of global carbon emissions and the IMO has recognised the need for urgent action to decarbonise. The industry is desperate to see zero-carbon ships brought to the water by shipyards by 2030.
However, at current rates of production, zero-carbon fuels are not commercially available at the scale needed for the global fleet. The carbon levy is intended to expedite the creation of a market that makes zero emission shipping viable.
According to ICS, 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.
What is more, in order 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.
“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”.
…as Guy Platten, secretary general of ICS, commented.
Overall, 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.
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.
…Guy Platten concluded.
