With the support of the shipping industry, 51 co-sponsors which consist of many governments and major shipping nations, the European Commission and the International Chamber of Shipping (ICS), have submitted a joint proposal for a greenhouse gas (GHG) emissions pricing mechanism for international shipping, which will be considered by a critical IMO meeting this week. The joint submitted text calls for an annual contribution by ships, per tonne of GHG emitted, to a new “IMO GHG Strategy Implementation Fund.”
This proposal will be considered by a critical International Maritime Organization (IMO) GHG working group meeting (ISWG-GHG 18) this week.
Guy Platten, secretary general of the ICS said that this week “will hold some difficult discussions as some Member States are not yet fully prepared to commit but the reality is that only via a global solution will we meet our net zero targets.”
“It is clear that there is increasing recognition by governments that a levy-based fund and reward mechanism, complemented by an IMO fuel standard, is the best way forward,” Platten added.
The co-sponsors of the document believe that the economic element of the basket of mid-term measures should have at its heart a levy/contribution on the GHG emissions from ships, which will stimulate energy efficiency, reduce the price gap between fossil fuels and zero-near zero GHG fuels, and generate revenues to support uptake of zero-near zero fuels, technologies and energy sources.
The joint submission by governments sets out convergent regulatory text for amendments to the IMO MARPOL Convention, which will require shipping companies operating ships on international voyages to make GHG contributions per tonne of CO2e emitted to a new “IMO GHG Strategy Implementation Fund.”
The key purpose of this mandatory GHG charge, says ICS, will be to reduce the cost gap between zero/near-zero GHG emission fuels such as green methanol, ammonia and hydrogen, and conventional marine fuels.
The revenue generated will be used to reward the production and uptake of zero/near-zero fuels, whilst also providing billions of U.S. dollars annually to support the maritime GHG reduction efforts of developing countries.
If the MARPOL amendments are approved by the International Maritime Organization (IMO) in April 2025, they should enter into force globally in early 2027, with the collection of annual GHG contributions from ships commencing in 2028.
“We believe that the levy proposal, that is now supported by governments responsible for a large majority of the world’s shipping tonnage, as well as by the global shipping industry, provides the best and most pragmatic means of decarbonising shipping at speed and scale.”
“We are encouraged that there are now 51 co-sponsors, including the European Commission and ICS, of a joint submission which sets out fit for purpose text in support of a levy-based GHG pricing mechanism, with ships making annual contributions per tonne of CO2 equivalent emitted to a proposed IMO GHG Strategy Implementation Fund,” Platten noted.
