The ocean carrier trade group the World Shipping Council (WSC) has proposed a plan to collect fees from cargo ships based on their fossil fuel consumption, helping to bridge the price gap between inexpensive, oil-based bunker fuel and low-emissions green alternatives.
The idea comes as global shipping regulator the UN International Maritime Organisation (IMO) pursues its target of net-zero carbon emissions by 2050 for the ocean freight sector. Talks are scheduled to discuss that plan at the IMO’s Marine Environment Protection Committee (MEPC) 81 meeting in March, where WSC will bring its proposal to the table.
While WSC agrees that ocean shipping liners are a significant emitter of greenhouse gases and that citizens see the catastrophic effects of climate change every day, it is also pushing for a way to drive investments in green fuels without imposing an outsized cost on the global economy.
According to WSC, its “Green Balance Mechanism” could strike that balance by taking fees from ships that burn fossil fuels and allocating them to green alternatives, so that the average cost of fuel is equal. That approach makes it “economically rational and attractive” for both ship owners and energy providers to invest in fuels and technologies that deliver deep greenhouse gas reductions, the group said.
Container and vehicle carriers are already building and operating vessels that can run on green energy sources, but those fuels cost 3 to 4 times more than oil, and the supply of green fuels is only a fraction of what is needed, WSC says. Therefore, global climate regulations are necessary to make it possible for carriers to operate on green fuels, and to incentivize fuel and energy providers to invest in new production capacity.
The plan is backed by WSC member companies including CMA-CGM, Evergreen, Hapag-Lloyd, HMM, Maersk, MSC Mediterranean Shipping Company, NYK Line, ONE (Ocean Network Express), OOCL, Swire Shipping, Wallenius Wilhelmsen, and X-Press feeders.
“Liner carriers are committed to decarbonising shipping and eager to support the development of effective and timely global climate regulations through the IMO. Switching from fossil fuels to green energy sources for the engine of global trade will take time and require massive private and public investments. It is our shared responsibility to make sure we meet the needs of our climate in a way that minimises the cost for the global economy,” John Butler, WSC’s president & CEO, said in a release.
Gartner, Inc.