The International Chamber of Shipping (ICS) has put forward a proposal to IMO for a global levy on carbon emissions from ships
ICS, which represents the world’s national shipowner associations and more than 80% of the merchant fleet, presented a submission to IMO last week, calling for an internationally accepted market-based measure (MBM) to accelerate the uptake and deployment of zero-carbon fuels. The submission is also sponsored by bulk carrier trade association Intercargo.
According to papers handed to IMO, the levy would be based on mandatory contributions by ships trading globally, exceeding 5,000 gt, 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 scale bunkering infrastructure required in ports throughout the world to supply new, cleaner fuels such as hydrogen and ammonia.
ICS said the fund would calculate the climate contributions to be made by ships, collect the contributions, and give evidence they have been made. ICS hopes it will also support new bunkering infrastructure, so new fuels can be made available globally from as many ports as possible.
Commenting on the proposal, secretary general Guy Platten said, “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.
“We need to be able to put zero-emissions ships in the water by 2030 without challenging price and safety issues. If IMO lends its backing to our proposal, we may yet be able to change this and deploy technologies economically and equitably.”
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 US$5Bn R&D fund to accelerate the development of zero-carbon technologies, which the UN IMO is scheduled to approve in November following COP 26.
ICS believes a levy based on market-based measures is superior to unilateral, regional application of MBMs to international shipping, such as extending the EU’s Emissions Trading System (ETS) to shipping.
Mr Platten said, “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.”
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